Skip to main content

What the EU Safe Harbour court ruling could mean for your business

While the ruling by the Court of Justice of the European Union has shifted the digital goal posts for many companies based in or operating in Europe, it may have also created an outstanding opportunity for forward-thinking organisations to truly enable the hybrid cloud.

The Court of Justice ruling strikes down the Safe Harbour agreement that has been in place between the European Union and the United States since 2000. The agreement gave companies the ability to move personal data on Europeans to the US without running afoul of the EU’s strict retention laws. In return, the companies were obliged to abide by a series of principles designed to ensure personal privacy was protected.

The decision to remove the agreement means the 28 countries of the EU now have individual control over how companies operating within their borders collect and manage data belonging to their citizens.

So, what does this mean for European companies and US firms operating in the region? Each now needs to carefully review its data retention and data centre strategies and determine what changes are required to ensure adherence to the new rules.

Activity has already started. For example, US-based NetSuite has announced plans to open a new outsourced data centre in Dublin, while Google is expanding its facility in Belgium and building another data centre in The Netherlands.

However, building your own data centre is not an appropriate strategy for all organisations. The cost of establishing, maintaining, and supporting connectivity to a dedicated private data centre is simply out of the reach of many firms. A more optimal alternative for those firms is to leverage a data centre service provider who can connect them to the cloud and to other data centres in an agile fashion.

Taking a hybrid approach to the challenge will deliver additional benefits. By selecting the right partner with a strong European presence, organisations will be able to become part of an ecosystem that provides capacity and connectivity wherever it’s required. We call it the ‘elastic hybrid cloud’.

Broader opportunities for the region?

Rather than being merely an onerous drag on companies, the new EU data requirements could well provide a shot in the arm for digital investment. The region already has a leading data centre and network infrastructure. Further investment in this vital capacity could spark innovation among governments and local IT firms and will also ensure firms have access to the capacity and flexibility they require for future growth.

Such innovation is being given a boost in Ireland with the announcement of a new 6.25 per cent business tax rate. Known as the Knowledge Development Box (KDB), the rate will apply to company earnings derived from intellectual property developed within the country.

It’s designed to attract more high-value research and development jobs to Ireland. Originally announced last year, the KDB is similar to schemes in the Netherlands and the UK.

Robert Bath, VP Global Solutions and Tom Kingham, Director Sales Engineering, EMEA at Digital Realty

Image source: Shutterstock/Maksim Kabakou