As more and more companies are having to carefully decide where to store their data, especially with the uncertainty of Brexit, Germany is seemingly dominating the data centre market. Intelligent CIO Europe hears from Philip van der Wilt, SVP, GM EMEA, ServiceNow, on why the company chose to further expand business into the country.
ServiceNow has announced the official opening and powering up of two new cloud services data centres in Frankfurt and Dusseldorf, Germany. The facilities will serve new and existing ServiceNow customers who need to retain control and management of their data residency.
The Frankfurt and Dusseldorf operations have been built as a mirrored pair to enable ServiceNow to seize the massive customer expansion opportunity in the German market.
The in-country presence means that ServiceNow can serve customers across a far wider and more sensitive assortment of data residency and regulatory compliance use cases.
ServiceNow already has over 200 German customers, served by data centre pairs in London and Amsterdam, as well as Geneva and Zurich. The strategic investment in its cloud infrastructure will ultimately serve to further broaden ServiceNow’s already expanding German customer base, allowing the company to talk to a wider breadth of companies.
Massive expansion opportunity
Initially, the expansion of cloud services may suit Germany-headquartered companies. Additionally, there is a similarly large customer expansion opportunity for ServiceNow to serve non-Germany-located Managed Service Provider (MSP) firms who operate a substantial amount of business with German customers in the domestic market, on the ground. These businesses need to be located on German soil to carry out many of their core operational requirements. This is an investment decision based upon the complexity and volume of cloud services requirements already being evidenced by German customers.
Part of our central go-to-market proposition is that we want to give our customers choice over their data residency and control. When we look at the European market as a whole, we already have a strong presence in London, Amsterdam, Geneva and Zurich, but GDP growth in Germany is stable and positive. The new data centres will help us to strategically expand our presence in Western Europe in what we have identified as a key growth market.
The announcement of these Germany data centres has already allowed ServiceNow to close a number of deals based directly upon the provision of these new cloud facilities. But in truth, every customer conversation ServiceNow is having is focused on the new data centres.
ServiceNow has identified eight key growth markets globally and the two biggest geographical zones are Germany and Japan.
In our view, these two countries will see the greatest amount of Digital Transformation leading to cloud services growth over the next three to four years. Because of this, ServiceNow has channelled its major investment for growth globally into Germany, with Japan also benefitting from new data centre operations.
Data centre mechanics
At the new Frankfurt and Dusseldorf sites, ServiceNow has provided all the hardware, network engineering, load balancing and software services backbone to deliver the full ServiceNow Now Platform and all of our partner services at full capacity.
Equinix will provide colocation facilities which will encompass all site premises requirements such as cooling, power, fixtures and fittings and other aspects of physical site security including CCTV and visitor logs etc. All new and existing ServiceNow data centres also meet the highest standards for reliable power, fire suppression and physical security.
In line with the investment made in physical hardware, ServiceNow’s German talent pool is also set to expand. The workforce across all German office locations will double over the next 18 months.
We know that data privacy will continue to be an increasingly complex issue in Germany and across the rest of Europe, so we are investing in the people, skills and talent (as well as the physical hardware and virtualised software services) we need to be able to serve customers today and in the future.
With demand for intelligent cloud services growing across every industry vertical for ServiceNow, our customer base has increasingly demanded additional compute, storage and analytics capacity to be provided on mainland European soil. The new data centre pair comes at a time when ServiceNow’s business model for Germany can now fully justify this in-country investment.
To underpin and provide the ServiceNow Nonstop Cloud, ServiceNow operates a total of six global support centres and with the addition of Dusseldorf and Frankfurt, nine data centre pairs across five continents. Each data centre pair operates in an active-active mode, providing highly performant and available instances for our customers.
German customers, German engineering
German customers will be able to get 24/7, follow-the-sun global data centre operations and support (some of which will be in German where needed), while they can also benefit from additional customer support with German-speaking, full-time employees.
This development creates more opportunities in the German enterprise market for ServiceNow. With German cloud adoption perhaps lagging behind other parts of Europe in some areas, this should open up a lot of doors that were previously closed.
The longer-term plan
The feeling in Germany itself in line with the new data centre openings is certainly one of positivity. There is an almost emotional surge that comes across from our customers who now know that they can locate their ServiceNow public cloud data storage requirements inside Germany.
The bottom line here is the massive expansion opportunity that ServiceNow has identified in Germany, which has resulted in this significant investment in the two new data centres.
We conservatively estimate that this could open up as much as 20% more total addressable market for ServiceNow business in Germany, with healthcare and financial services identified as key growth areas.
With an advanced, high-availability architecture at the heart of our operational backbone, ServiceNow is ready to serve both global and local markets with world standard non-stop cloud services. As they say in Germany, ‘Let’s Switch It On, Then!’ — Lasst uns den Schalter umlegen!
More and more companies are expanding into Germany to house their data centres and we caught up with Philip van der Wilt to rack his brains about the reasoning behind the expansion:
On Germany being a popular data centre destination
ServiceNow has identified eight key growth markets globally and the two biggest geographical zones are Germany and Japan. In our view, these two countries will see the greatest amount of Digital Transformation leading to cloud services growth over the next three to four years. We conservatively estimate that this could open up as much as 20% more total addressable market for ServiceNow business in Germany, with healthcare and financial services identified as key growth areas.
The in-country presence means that we can serve customers across a far wider and more sensitive assortment of data residency and regulatory compliance use cases. It also gives customers the choice to retain control and management of their data residency.
On the differences in customers who now know they can locate their ServiceNow public cloud data storage requirements inside Germany
Our German customers and prospects are now much more open to working with us further as we now compete with all of leading cloud companies in the territory that already have a data centre in Germany.
How ServiceNow’s investments in people, skills and talent will help tackle the company’s data privacy issues going forward
Our ongoing investments are just part of our story in building further trust with our customers as we continue to expand across Europe, whether in data privacy, or further compliance elements about the use of our cloud services.
On the trends emerging in the country’s data centre market
There will be the same trends in Germany that we see across all geographies including a continued drive to operating in the cloud. For example, in the UK, more public sector and governments will become more at home with cloud-based technologies and start to digitally transform thanks to increased confidence in national border data.
We can look to other similar markets like the UK public sector where the adoption of cloud is starting to become mainstream.
Tris Church, IT Service Delivery Manager, IM&T Department, Oxford Health NHS Foundation Trust, commented: “ServiceNow has defined our approach to IT service management. We made the decision to work with ServiceNow five years ago and the platform continues to put us at the cutting edge of IT service delivery. ServiceNow has an aggressive upgrade programme and this challenges us to push the boundaries on what we can achieve with the platform.
“The improvements that ServiceNow has delivered have been revolutionary. We have transformed our IT department into a leading light within our organisation and the benchmark for service delivery.”
Key challenges for the industry
We need to ensure that we attract the best talent and develop our partner ecosystem in order to deliver the best standard of growth for both our business and for our customers. Additionally, we need to continue to educate and build trust in cloud solutions in industries that are more traditional and still rely on a lot of on-premise technology by showcasing the benefits our customers are already experiencing.
On whether Germany will remain as the dominant country for data centre residency and how it will retain its position
It is impossible to predict exactly how the future of the data centre industry will evolve and where businesses will base their assets. The positioning of data centres will continue to change depending on a myriad of factors, especially those relating to technical or legal requirements and risk.
A compelling formula for ongoing growth in the country is ease of business and minimisation of risk, together with compelling technical, best-in-class solutions and resources.Click below to share this article