Unfortunately, Germany was never at the top of its class when it came to digitization. In a country comparison, we are still rather mediocre in many areas. But there is prospect of improvement, thinks Marcus Busch from Leaseweb and explains how Germany can learn from the mistakes of other countries.
The past decade saw the advent of the cloud, virtualization and the digital transformation of many areas of life. The internet economy in Germany grew continuously year after year and became a catalyst for the increasingly digitized economy. What has made up the last ten years, what influence the corona crisis is having on the industry and why Germany should see catching up in digitization as an opportunity.
Germany, digitization, deep sleep
The global development of digital infrastructures has not been the same in all countries since the advent of the commercial Internet in the 1990s. Different legal framework conditions and the specific competitive situation, for example, meant that Germany never found itself at the forefront of digitization in an international comparison. One of the reasons for this was that data protection is a sensitive issue in this country, which is why citizens and companies are often hesitant to use new technologies. The legislation and its regulations have not only been strict since the GDPR came into force and international agreements such as the Privacy Shield negotiated between the USA and the EU - and later overturned by the ECJ - make the use of public cloud offers from hyperscalers, for example, problematic.
There is no prospect of a new agreement that would offer planning security. Many German companies are therefore worried about losing control of their data and resources - and are hesitating to switch to modern cloud technology. This applies above all to German medium-sized companies, which have always been the backbone of the German economy. When it comes to expanding broadband internet, Germany tends to be in the lower half of the table - and not just in rural areas.
The corona crisis challenges and strengthens the industry
But there is a prospect of improvement: the internet industry has grown steadily over the past decade and Germany is currently catching up on the pioneers in a country comparison. Even if the corona crisis brought lower growth to the industry in 2020 than forecast, there is a great chance that Germany will not only catch up with European and global standards in the near future, but even exceed them. The corona crisis has put a lot of pressure on the internet industry this year. The industry has played its part in ensuring that global communication was maintained and people could continue to work productively - even within their own four walls.
Digital transformation and cloud architecture
Marcus Busch, Leaseweb
Now the often hesitant German medium-sized companies are called upon to learn new things about digital transformation and modern cloud architecture, not least through their international contacts and branches. The benefits are beginning to dispel doubts, especially through experience gained in other countries. Since there is still no successor agreement to the Privacy Shield, customers are almost forced to rely on local partners who are 100 percent subject to German or EU law. This is now quite possible, as many European providers host the data of their customers without exception in Europe and fully respect the data protection regulations. The Gaia-X initiative is also moving in this direction, as it creates a European data space in which local cloud providers and customers can come together to provide the cloud services that are now needed.
When it comes to broadband expansion, there is also light at the end of the tunnel: investments are currently being made nationwide in fiber optics, including by new providers who are stimulating competition. In addition, the expansion of 5G has started. These initiatives increase the availability of modern broadband networks, even in previously underserved areas. These networks will become the backbone of digitization in the future.
Chance for Germany
Last but not least, politicians have recognized that now is the right time to vigorously drive digital transformation. If the steps outlined are implemented consistently and also supported by politics, there are great opportunities for Germany to learn from the experiences in other countries and to start a successful catch-up race that makes the location even more attractive. In this way, the German economy can skip the birth pangs of the cloud and hybrid cloud because these technologies have become stable services. Those who now rely on hybrid cloud solutions enjoy the advantage of no longer having to navigate through a constantly changing market. This gives German companies the chance to benefit from international experience.
Germany has great potential
Many signs point to unprecedented growth in the Internet economy in Germany. Previously prevailing concerns about the cloud are disappearing and Germany's digital infrastructure can be the beneficiary. Not only the German (internet) economy, but also politics is just beginning to notice this.
Leaseweb Germany is celebrating its tenth anniversary these days and can look back on a decade of continuous growth in which the hybrid cloud has developed into the cloud infrastructure with the best price / performance ratio. In spite of everything, 2020 was also a positive year for the internet industry in Germany, especially for cloud providers who offer their customers flexible products and solutions that they need for their digital transformation in this challenging time. All of this gives us confidence for the near future - and the next ten years.
More on this at Leaseweb.com
About Leaseweb Leaseweb is a leading provider of IT infrastructure services (Infrastructure as a Service; IaaS) with 18.000 small to very large customers worldwide. Services include public cloud, private cloud, dedicated servers, colocation, content delivery network and cybersecurity services backed by exceptional customer service and technical support. With more than 80.000 servers, Leaseweb has been providing infrastructure for business-critical websites, network applications, e-mail servers, security and storage services since 1997. The company operates 20 data centers at locations in Europe, Asia, Australia and North America, all of which are supported by a state-of-the-art worldwide network with a total capacity of more than 10 TBit / s.