The discussion about the US CLOUD Act, digital sovereignty and cloud migrations has drawn the attention of many companies to a topic that has long been considered purely infrastructural: the location of data centers. What used to be considered primarily from a cost, performance and availability perspective has now become a strategic location question – with direct implications for compliance, resilience, sustainability and geopolitical dependencies.
Current market and impact studies clearly show that Germany is developing into one of the most important data center locations in Europe. At the same time, the requirements for energy efficiency, sustainability, regulation and data sovereignty are becoming more stringent. For companies, this means that the question is no longer just whether to use the cloud and data centers, but where and under what conditions.
The German data center market is changing
The Bitkom study "Data Centers in Germany: Current Market Developments 2025" paints a clear picture: The German data center market continues to grow – driven by cloud computing, digitization of industrial processes and the increasing use of data and AI applications. In particular, the increasing demand for computing power for data-intensive workloads is changing the market structure permanently.
Scientific evaluations, for example by Borderstep as part of the Bitkom study, underline that data centers have long since ceased to be a niche topic. They are a central component of digital value chains – comparable to transport or energy infrastructure. For companies, this means that decisions about data center and cloud locations are long-term structural decisions, not short-term IT projects.
Growth drivers: Cloud, AI and data-driven business models
Several studies – including the Data Center Impact Report Germany 2024 of the German Datacenter Association (GDA) and the German Datacenter Outlook 2024/25 – identify similar growth drivers:
Increasing cloud adoption in organizations of all sizes
Growing amounts of data from industry, IoT and digital services
Increasing computing requirements through AI models and advanced analytics
Higher requirements for availability, latency and security
Particularly relevant: Data centers are no longer seen only as technical platforms, but as enablers for innovation, new business models and digital sovereignty. At the same time, there is a growing awareness that this infrastructure is highly sensitive – both economically and politically.
Germany as a business location: advantages – but not without challenges
The market studies mentioned above highlight several locational advantages in Germany:
political and legal stability
High data protection and security standards
strong industrial demand
Central location in the European Economic Area
These factors make Germany attractive for companies that want to bring their data processing more under European control – especially against the backdrop of extraterritorial laws such as the US CLOUD Act.
At the same time, however, the studies also point to considerable challenges:
Increasing energy demand and grid utilization
Shortage of space in metropolitan areas
lengthy approval procedures
Increasing requirements for sustainability and waste heat utilisation
The Data Center Impact Report Germany 2024 clearly shows that the expansion of data centers will only be accepted in the long term if it is in line with energy efficiency, climate goals and regional value creation.
Regulation, sustainability and sovereignty as new guardrails
The Bitkom Data Centers 2025 Action Plan makes it clear that politics and business increasingly understand data centers as strategic infrastructure. In addition to growth and competitiveness, the focus is on the following topics in particular:
digital and geopolitical sovereignty
Resilience of critical digital infrastructures
Sustainability, energy efficiency and climate neutrality
Reliable regulatory framework
For companies, this means that location decisions for cloud and data center use today must anticipate regulatory developments, not just meet current requirements. Those who align their IT strategy exclusively with short-term cost optimization run the risk of getting into new dependencies or regulatory dead ends in the medium term.
What does this mean for enterprise cloud and migration strategies?
In combination with the previous articles on the CLOUD Act topic, a consistent picture emerges: Data center and cloud strategies are no longer an isolated IT topic, but part of the company-wide governance and risk strategy.
1. Choice of location as a governance decision
Organizations need to be intentional about which workloads:
in global hyperscaler infrastructures
in European cloud environments
or in national or industry-specific data centers
. This decision is closely linked to data classification, compliance requirements, and risk tolerance.
2. Hybrid and multi-cloud are becoming the norm
The market studies show that a purely monolithic approach is increasingly proving impractical. Instead, many organizations rely on:
Hybrid architectures
Multi-cloud scenarios
Targeted combination of on-premises, colocation and public cloud
German data centers in particular play an important role here as a stabilizing pillar between global cloud innovation and local control.
3. Sustainability is becoming a location factor
The increasing energy demand of data centers is putting sustainability at the center of strategic decisions. Companies need to ask themselves:
How energy-efficient are the data centers used?
Are there concepts for waste heat utilization?
How transparent is the energy and CO₂ footprint?
The studies clearly show that sustainability is not an "add-on", but a competitive and acceptance factor.
Data centers as part of the digital sovereignty strategy
The public discussion often focuses on cloud providers and international tech companies. However, the market and impact studies make it clear that the physical and legal location of data centers remains a key lever for implementing digital sovereignty in practice.
For companies, this does not mean turning away from global cloud providers. Rather, it is about choosing deliberate architectures and site combinations that:
reduce regulatory risks,
Limit dependencies,
Maintain innovative capacity,
and create long-term resilience.
Conclusion: Location issues are strategic issues
The current studies on the data center market in Germany impressively show that infrastructure decisions are now inextricably linked to questions of law, regulation, sustainability and geopolitical stability.
For companies dealing with CLOUD Act risks, cloud migration and digital sovereignty, looking at the data center location is not a step backwards – but a necessary step forward.
A future-proof cloud strategy combines global innovation platforms with locally anchored, sovereign infrastructures. Those who understand this connection and use it strategically transform regulatory framework conditions from a risk factor into room for manoeuvre.
MeJuvante.ai supports companies in holistically analyzing these location, cloud and governance issues and translating them into resilient strategies – from risk analysis to architecture decisions to sustainable implementation.