If digital data is to business in the 21st century what oil was to industry in the 20th century, then just outside of Magdeburg is one of the largest production facilities in Europe.

The data center in Biere is in Bördeland.

It covers the area of ​​six soccer fields, has hundreds of thousands of network computers the size of a cupboard under the roof, is one of the largest of its kind and is operated by T-Systems, a subsidiary of Deutsche Telekom.

She calls the system the "digital heart" of Germany.

And that beats fast.

Stephen Finsterbusch

Editor in Business.

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The pandemic may have dampened road, rail and air traffic, but it boosted data traffic.

The Internet is buzzing, data throughput is increasing.

Home office, conference and streaming services, Netflix, Amazon and Spotify, SAP, Salesforce, Oracle and Co. have just led him to new records.

According to Statista, the data volume of broadband internet traffic in Germany was around 102 billion gigabytes in 2021, twice as much as in 2019. There is no end in sight to this development.

On the contrary.

The German Commercial Internet Exchange (DE-CIX) just reported a record of 11 terabit data per second for the global data hub Frankfurt.

According to information from the node operators, this corresponds to the simultaneous transmission of 2.42 million videos in HD quality or a kilometer-high stack of 2.4 billion DIN A4 pages written.

Digitization is only just beginning, but it is at least making great strides.

This allows the amount of data to grow - and it is in the data centers.

Lots of catching up to do

In Germany alone there are around 50,000 of them - large and small, according to the IT industry association Bitkom.

They stand in front of cities like Berlin, Hamburg and Frankfurt or on flat land like the Börde near Magdeburg.

There are around 4,000 of the so-called mega data centers, each with hundreds of thousands of network computers, in the world.

Two-thirds of them are in America.

They are operated by internet giants like Amazon, Microsoft and Google or by special companies like American Tower or Cyrus One.

They often trade as REIT real estate funds, enjoy special rights as such and are also increasingly spreading in Europe.

The old continent has a lot of catching up to do when it comes to digitization.

After the capacities in data centers increased by around 80 percent between 2010 and 2020, they will increase by around a third by 2025, explains Bernhard Rohleder, CEO of Bitkom.

The data house Statista estimates the business with the so-called German data cloud at currently 12 billion euros per year.

Gartner estimates the global business at 300 billion euros, and the trend is rising.

But that drives up the energy requirement.

Twelve years ago, data centers in Germany consumed 10.5 billion kilowatt hours, by 2021 it was already 16 billion.

According to Bitkom, this corresponded to 0.6 percent of the country's total annual energy consumption.

But that is a problem for the industry.

Because Germany has the highest energy prices on the continent.

Microsoft, Amazon and Google are big in Germany

"The very high electricity costs compared to other European countries are a decisive locational disadvantage for German data centers," said Rohleder.

In this country it could be twice as expensive to supply a data center with energy as in the Netherlands.

That's not the only obstacle.

Planning and approval procedures in Germany are also characterized by a number of bureaucratic hurdles that do not exist in other countries.

The federal government still has a lot to do here, says Rohleder.

After all, the largest economy in Europe wants to lead the way in the digitization of the EU.

For example with the cloud initiative Gaia X.

After years of preparation, the companies, state and semi-state institutions brought together in this project want to bring the first products onto the market this year.

This was originally intended to reduce dependency on American suppliers.

Today, however, one prefers to speak of cooperation rather than confrontation.

Because there is no getting past the major suppliers from overseas.

Microsoft, Google and Amazon are well positioned in Germany.

They cooperate with national champions such as Deutsche Telekom or SAP.

In terms of data centers, Europe's largest software house sees itself as a business cloud provider, not as an operator.

This task is left to the specialists from America.

Nevertheless, it has its own smaller data centers.

For testing, security and flexibility reasons, as they say.

"The operation of data centers beyond the cloud services for our customers is not part of our business model," says a SAP spokesman.

Rather, the German T-Systems has that on the agenda.

As Telekom's IT service provider, it operates twelve so-called twin data centers around the world - from Biere near Magdeburg via Munich and Frankfurt to Amsterdam, Houston and Singapore.

There it not only operates the IT systems for Telekom's major customers, but also its own cloud ecosystems.