Industry Outlook is a regular Data Center Journal Q&A series that presents expert views on market trends, technologies and other issues relevant to data centers and IT.
This week, Industry Outlook talks with Artmotion CEO Mateo Meier to find out more about the Swiss data center market and a company whose level of secrecy and its close connections to some of the world’s biggest banks and other companies speak to the culture of neutrality of the Helvetians.
Industry Outlook: What are the main reasons that companies choose Switzerland as their hosting location?
Mateo Meier: Hosting data in Switzerland has many benefits. The main reasons for companies to choose Switzerland as their hosting location are the nation’s neutrality and independence, its low environmental risks and its long-lasting political stability. As is known, Swiss banks are governed by stringent laws, which also are a derivative of the nation’s privacy legislation. In consideration of data privacy and security issues, similar strict laws apply in Switzerland. Moreover, Switzerland is a country outside of the E.U. and therefore is not bound by pan-European agreements to share data with other member states, or other non-E.U. countries.
IO: What is the business idea behind Artmotion’s foundation?
Founded in 2000, Artmotion specialises in secure IT solutions located in Switzerland, with a focus on data center and server offerings. The company’s services attract an international clientele looking to benefit from Switzerland’s central location, respect for confidentiality and tax advantages. Beyond that, Artmotion focuses on customers with high-quality standards, who look for demanding security and confidentiality levels—for example, customers like trading firms, banks and health-care organizations with “secret” research or development needs.
IO: How can a company like Artmotion prove itself on the international market compared with American providers?
MM: As a result of the recent leaks regarding the National Security Agency’s surveillance program (PRISM), which sparked growing concern over data privacy, many businesses are now turning to Switzerland for their data hosting needs. Just a month after Edward Snowden revealed details of the PRISM program, Artmotion reported a 45 percent revenue increase. Therefore a company like Artmotion can prove itself on the international market by offering neutrality and privacy, which is enshrined in law in Switzerland. Besides, several sources indicate that by 2016, U.S. cloud-computing providers may lose up to $35 billion thanks to the NSA scandal, where on the other hand they see grand potential in countries like Switzerland to capture some significant pieces of the pie.
IO: Did PRISM kill the cloud?
MM: The leaks regarding the NSA’s PRISM program have made firms more aware of data security. For example, a client recently asked me, “What happens if I save a file in Dropbox or on Microsoft Office 365? How do I ensure that the authorities don’t spy on those files, and what if they misuse my data?” Thus far, the cloud has come a long way, and the initial security concerns are only abating slowly. Did PRISM kill the cloud? I for myself do not think that NSA surveillance killed the cloud, but it definitely made it more difficult for American cloud giants to act on the international market.
IO: To what extent has the NSA PRISM scandal affected hosting in Switzerland?
MM: As mentioned above, the NSA PRISM scandal has had ambivalent effects on the Swiss hosting market. Speaking for Artmotion, after the first leaks were published we saw a revenue increase of 45 percent and were able to grow despite the scandal. On the other hand, many customers felt uncertain about the security of their data and still feel unsettled. At the moment, Microsoft is updating its terms of service so that its cloud offerings accommodate Swiss law instead of U.S. law. In general, there’s been a huge movement in this sector, and the market has been changing intensely for the past months.
IO: How important is cheese and chocolate compared with the IT industry in Switzerland?
MM: With export volumes of Swiss IT products and services reaching nearly nine billion Swiss Francs (8,814 million CHF, or about US$10 billion) in 2011, the IT industry now exports six times more than popular Swiss exports cheese and chocolate (1,335 million CHF, or about US$1.5 billion). IT services such as data storage in Switzerland are becoming increasingly popular, as global companies are choosing to take advantage of the country’s strict privacy laws.
IO: Are there certain types of companies with whom your service has become popular?
MM: Our clientele base continues to grow. And since the scandal, we’ve seen a fair increase in the number of companies from high-risk industries, whose desire for privacy has surged in turning to “Silicon” Switzerland. Such industries include banking and financial, technology, energy, oil and gas, security, and science. To sum up, I’d like to say that many companies still entertain some doubt about their data security and therefore are ready to take advantage of Switzerland’s renowned privacy culture.