Deutsche Telekom Builds ’Fort Knox’ Against Hackers, Spies

Deutsche Telekom AG (DTE) is courting international companies with a new data center that promises physical as well as legal protection from cybercrime and the eyes of government spies.

The data center in Biere, a small farming town two hours west of Berlin, features server rooms that can only be accessed via elevated bridges reminiscent of medieval castles, thermal imaging cameras, electronic gateways and specially trained security personnel. The server farm will be Germany’s biggest when it’s fully built out.

“It’s invaluable to be able to keep data in Germany,” Chief Executive Officer Timotheus Hoettges told Bloomberg News, saying Biere was the “safest” data center in the world, “our ‘Fort Knox’ for data.” He said “even clients from the U.S. insist these days on having their information stored here.”

The center’s opening today comes as companies and governments move to convince customers and citizens that confidential information won’t be compromised. Verizon Communications Inc. last week had a network contract with Germany’s government canceled over concerns it may be forced to hand data to the U.S. National Security Agency. That contract will probably be handed to Bonn-based Deutsche Telekom next year.

Protecting Secrets

Files stored on Deutsche Telekom’s servers are encrypted so they can’t be read by outsiders as they travel through the Web, Hoettges said. That’s especially valuable for clients wishing to protect trade secrets, he added. Because it uses one third less energy than an average server farm, the Biere data center will be profitable starting at 40 percent capacity utilization, Hoettges said.

Deutsche Telekom shares rose 0.7 percent in Frankfurt today, valuing the company at 57 billion euros ($77.6 billion).

Data hosting is a growth area for Europe’s biggest telecommunications company as phone revenue in the region continues to decline. Cloud software vendor Salesforce.com Inc. (CRM) picked Deutsche Telekom’s T-Systems unit as main implementer in German-speaking countries and will expand a partnership to the rest of Europe, the Middle East and Africa, according to a statement today.

Secret Clients

Deutsche Telekom declined to say which clients have signed up to have their data and software hosted in Biere and a twin server farm in nearby Magdeburg. The first-build stage, with space for 30,000 computers, will probably be filled by the end of the year.

The company said it seeks to work with Salesforce as well as software providers such as Oracle Corp. and SAP AG to make it easy for customers to combine different software modules and transfer data between one software suite and another.

“I hope that security will become a decisive advantage for Germany and Europe” when it comes to the question where companies invest, said German Economy Minister Sigmar Gabriel, who attended the opening ceremony.

To contact the reporter on this story: Cornelius Rahn in Berlin at crahn2@bloomberg.net

To contact the editors responsible for this story: Kenneth Wong at kwong11@bloomberg.net Mark Beech, Robert Valpuesta

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