On 25th May 2018, the GDPR Regulation came into force and regulated, among other things, the processing of personal data across the European Union. This development saw many companies having to make data protection and GDPR compliance their priority over the past five years, evaluating processes and introducing new measures, with a greater consumer awareness and demand for more stringent data privacy and transparency fueling this further.
The introduction of GDPR has also had a profound effect and impact on data centers that process or store much of this critical private and public data. So, what exactly has changed over the past five years, and what could be next in store?
The local impact
One of the main effects of the GDPR regulation is the need for more data protection and more stringent security measures, with all companies operating in the EU or processing personal data of EU citizens having to comply with strict data protection standards. These range from implementing security measures to protect personal data from unauthorised access, disclosure, or theft to more clearly outlining how personal data is processed and handled from the outset. As a result, many companies have had to upgrade their data center infrastructure and facilities to ensure they can effectively comply with the GDPR regulations.
The legislation has also led to an increased demand for data localisation and a demand for centers in the EU, as personal data now has to be stored and processed locally in line with the new rules. The KPMG Cloud Monitor 2022 states that for 70 percent of the companies surveyed, it is crucial that their cloud provider has its data centers in the jurisdiction of the EU, which supports this broader shift.
Germany as a central location
Over the last few years, the turnover and demand for the data center industry in Germany and Europe has risen continuously. According to Statista, the market is projected to grow by 4.07% between 2023 and 2027, likely due to the fact that compulsory regulation has increased demand for cloud-based data storage solutions that offer strong data protection and security measures.
As well as having a higher level of data privacy and legal security due to GDPR rules, Germany, especially the metropolis of Frankfurt am Main, also has an incredibly stable power supply. This makes the location on the main river an excellent base for hyperscalers and cloud providers, who are very keen to ensure regulatory compliance in everything they do. Frankfurt is an incredibly important digital hub, one of great strategic importance for companies looking to expand and grow within Europe and we anticipate this demand will only continue.
AI brings new challenges for data protection
As we look ahead to the next five years, it’s clear that advancements in AI and language services such as ChatGPT have led to renewed conversations about data privacy and it’s as timely a topic as ever. Those in charge of data protection and privacy are already facing new and complex challenges in an ever-evolving landscape, with the EU continually discussing what regulations and laws for the safe and compliant handling of artificial intelligence data could look like, and if these decisions are likely to have as great an impact on data centers as GDPR did when it comes into force.
The recent GDPR fine imposed on Meta of over £1bn is a timely reminder that data safety and compliance are not merely buzzwords but mandatory requirements for organisations in 2023, wherever they are in the world. Ultimately, it’s a positive thing that data privacy and regulation continue to be a priority for consumers and businesses alike, and it will be interesting to see how this continues to affect the German data center market, as well as demand across the broader European landscape.
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