On Oct. 19, Google announced it was opening a Cloud region in Israel, which should enable private companies and government agencies to store data locally. The move was the result of Amazon and Google winning the Israeli government’s mega-cloud tender called “Nimbus” last year.

Physically, these operations will be performed via server farms (data centers) in Israel. To date, there are two such facilities – one in Petah Tikva and one in Modi'in. Reportedly, Google is interested in establishing additional farms in Bnei Zion and in Kfar Yehoshua.

Data centers require large physical spaces since they are a collection of servers through which cloud services are provided. In addition, various groups prefer, and sometimes require, that their data is physically stored within the boundaries of a country. These server farms must be available at any time, even during a natural disaster or power outage. 

Because of all of these factors, the server farm industry is growing faster than traditional real estate. Large international companies are building local server farms in Israel for their cloud services, including Microsoft, Oracle, and Google.