IBM opened the first German data center for its SoftLayer cloud infrastructure subsidiary on Wednesday as part a broader effort to reach international markets amid heightened privacy fears that have made foreign organizations reluctant to trust their data to American cloud providers.

With its Federal Data Protection Act, Germany presents one of the strictest privacy regimes in the entire European Union (EU), which is already among the world’s strongest enforcers of information rights. This means that maintaining a local presence is not merely an advantage but a necessity for a provider seeking to tap the full potential of the the continent’s largest economy.

The number of German organizations consuming technology from outside the corporate firewall grew a massive 32 percent between 2012 and 2013, IBM said. Research firm Experton Group AG predicts that the German cloud market will reach $17 billion by 2017.

IBM is banking on its newly launched data center to pave the way into the market, but it’s not the only US provider that’s eyeing a slice of the burgeoning German demand for cloud services.

The launch of the facility comes barely three months after infrastructure-as-a-service kingpin Amazon.com Inc. set up shop in Frankfurt. In September, Microsoft Germany CEO Christian Illek raised the “likely” possibility of the company extending its own cloud platform to the nation with a local provider acting as a trustee towards regional customers.

That would one-up Amazon and IBM, not only meeting the requirement to keep sensitive data within German jurisdiction but also effectively detaching the service from its US operator, which should theoretically shield regional customers from interception. Until then, however, Big Blue can claim an advantage as one of the handful major providers with a local presence.

Regulatory compliance is only one of multiple benefits to consuming services from a regional data center as opposed to a foreign facility. Another is lower latency, which is such an important consideration for some workloads that it can dictate a company’s choice of providers.

The fact that IBM also maintains data centers in Amsterdam, London and Paris also burnishes its appeal to European customers, who can replicate their data across multiple geographic regions for maximum reliability without moving it outside the EU, thereby reducing the risk of an outage while upholding privacy requirements.