When cloud computing was first coming up in the early 2000's the locations of the facilities and computing in the European Economic Area (EEA) was good enough for most European regulations.
The increased use of cloud computing in government and other regulated industries creates the need for cloud computing within country borders, so data does is closer to home and can more easily follow regulations.
If cloud computing were bees, Germany would be a honeypot with its strict data protection laws; everyone is fighting to put a datacenter here. Local politicians and CEOs will have to allow big companies like Microsoft, Google, and Amazon to place large datacenters. IBM is taking a different approach: developing smaller datacenters in more countries.
Paul Miller has studied cloud computing trends and believes the big companies will choose countries with low, competitive taxes and regions that are fluent in English, and areas that are cheap on power and/or have plenty of cooling available.
There is already a trend for European CIOs to follow their countries regulations to maintain data in their border. By following these regulations, CIOs have less options between vendors. Hopefully as vendors increase their footprint in all countries, CIOs will have an easier time to engineer a single solution for their entity in one vendor - to increase compatibility and ease of use.