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Tuesday, March 5, 2024

Google is investing one billion euros in Germany

In the great circus of high-tech corporations, Google appears like a pony that can only do one trick.
Making money with advertising. The advertisements on Google and YouTube bring the Alphabet group billions, while the cloud business has so far only accumulated losses. But group boss Sundar Pichai has not given up the plan to build up the cloud division as an important source of income. Therefore, he also gave the green light for an enormous investment in Germany, so as not to leave the lucrative German market to the market leaders Amazon AWS and Microsoft .

By 2030, investments in Germany will add up to a good billion euros. With this money, Google is expanding its Frankfurt / Main cloud region with a new data center in Hanau. A completely new cloud region is even being set up in the greater Berlin area. In addition, the group will indirectly finance wind farms and solar systems in Germany via a large-scale supply contract with the Cologne energy supplier Engie ( Engie (ex GDF Suez) ) in order to be able to operate the cloud with renewable energies.

The cloud system in Hanau is only 20 kilometers away from the world’s largest Internet node DE-CIX, said Philipp Justus, Google’s head of Central Europe. The four-story building with a usable area of ​​around 10,000 square meters should be fully operational in the coming year.
Google is thus adapting the Frankfurt cloud region to the growing demand for cloud services in Germany. The mail order company Otto, Lufthansa and Deutsche Bank were won as cloud customers. In order to promote the cloud business in Germany, the internet company had already poached Daniel Holz, the Germany managing director of the software giant SAP ( SAP SE ), last October . He is now responsible for Google’s cloud business in Germany and Central Europe.

As part of its expansion in Germany, Google is setting up a new Berlin-Brandenburg cloud region by 2022. The exact location of the data centers was not disclosed. However, they are to be built or rented both in the federal capital itself and in the Brandenburg area. “We have a very, very high demand from corporate customers here in the Berlin-Brandenburg region,” said Justus. “And the closer we are to these customers with a cloud region, the faster, the more reliable the services that the Google Cloud offers these companies.”
With the different cloud regions, for example, data runtimes (latency) are considerably reduced compared to a trans-Atlantic data connection. There are also legal and regulatory reasons for customers to work better on cloud computers that are located in Germany instead of using systems in the USA. Customers in Germany can now choose from two German cloud regions as an alternative to a server location in the USA, said Justus.
However, data protection activists like Max Schrems are not satisfied with this construct. The Austrian lawyer had brought two transatlantic data protection agreements, “Safe Habour” and the successor solution “Privacy Shield”, down before the European Court of Justice (ECJ) in proceedings against Facebook. He is of the opinion that companies and institutions in Europe are actually not allowed to use cloud services from providers from the USA, since ultimately servers in Germany are not protected from access by US secret services either.
Google, on the other hand, believes it has found a way to offer its cloud services in Europe in accordance with the European General Data Protection Regulation (GDPR). Schrems’ concerns not only affect Google’s offerings, but are also directed against major competitors Microsoft and Amazon AWS and all other US providers.
In the current political debate in Germany, data protection is not a hot topic anyway. It is much more likely that Google hits a political nerve with its lofty ambitions in terms of climate protection. Data centers – not only those from Google – are power guzzlers and could contribute to global warming if they are fed with “dirty electricity” from coal-fired power plants.
Google has been offsetting its worldwide annual electricity consumption by purchasing green electricity since 2017. A data center is dependent on electricity around the clock – 365 days a year – even when the sun is not shining or there is no wind. In the German electricity grid, however, it is currently not possible to supply such a large electricity consumer as Google around the clock with 100 percent renewable energies.

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The industry average for renewable energies in the German power grids is around 60 percent. The rest of the time, the electricity comes from coal-fired power stations or nuclear power stations. With the local energy partner Engie Germany from Cologne, the value is to be increased to 80 percent in the short term. As part of the cooperation with Engie, more than 140 megawatts (MW) of solar and wind energy are to enter the German grid in the coming years. This included a new 39 MW photovoltaic system and the maintenance of 22 wind farms. “We want to use only CO2-free energy around the clock by 2030,” promised Justus. “This is an even bigger goal than just being CO2 neutral.”


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