Back in 2015, it seemed like a great idea. In response to widespread German fears about data security, Microsoft and Deutsche Telekom agreed to collaborate on cloud computing with extra-secure, ring-fenced data, guaranteed to stay in Germany and protected by the country’s extra tight privacy laws.
But the sure-fire winner turned out to be a dead-loss: over-priced, under-performing and unpopular with customers. And Microsoft’s initial investment alone costed the company more than €100 million ($123 million) on “Microsoft Cloud Deutschland” (MCD), Wirtschaftswoche and Handelsblatt have learned. The company is unlikely to recoup this investment.
The failure is all the more annoying for Microsoft, since the German cloud computing market is booming. Microsoft’s other cloud services are selling well, as are products from competitors Amazon Web Services (AWS), SAP and IBM. After many years of suspicion, German customers – above all, German companies – seem to have fewer hesitations about keeping their data in the cloud.