In San Francisco

Oracle is to open two major new cloud data centres in Germany, in a move clearly designed to address German concerns about potential surveillance of its business and citizen data.

The announcement, made at Oracle’s annual OpenWorld conference here by Loïc Le Guisquet, executive vice president, Oracle EMEA, was presented primarily as an initiative to support growing demand for cloud-based services in the country.

But, in the announcement and in a supporting blog post, Le Guisquet noted that the centres, located in Frankfurt and Munich, “will provide cloud services to those businesses in the German market whose preference is for cloud applications deployed in Germany.”

Following Edward Snowden's revelations of international data snooping by surveillance organisations GCHQ in Britain and the National Security Agency (NSA) in the US, concern has grown in Europe that data sent to US-based clouds falls under US laws and is beyond Europe's stronger data protection laws.

Germany has indicated it is considering legislating to keep German data inside Germany, in NSA-free zones. German chancellor Angela Merkel said earlier this year that she would like to see a separate European internet.

Oracle’s two centres, which will be fully operational by the end of the year, are one of the first concrete indications that US cloud and data companies will listen and respond to German concerns.

As cloud-based computing grows in popularity, US multinationals -which dominate the cloud service and data centre market - will be seeking ways to prevent losing European customers over security fears.

However, US companies may not have a legal right under US law to withhold European data if it is demanded by US authorities, even if it is held outside the US. Microsoft is currently fighting a US court demand that it hand over data held in its Irish data centre.

Oracle gave some insight into the value of its cloud business in an opening keynote yesterday by Oracle chairman and chief technology officer Larry Ellison, who stood down as CEO last week.

According to Ellison in the first of two keynotes he will give this week, Oracle’s cloud comprises over 30,000 computers and offers 400 petabytes of storage, and has 62 million users day.

Jürgen Kunz, country leader of Oracle Germany, said in a statement: “The new Oracle data centres in Germany will service the considerable demand for cloud applications among German businesses and will provide an important, strategic facility on the doorstep of some of Germany’s biggest businesses.”