NSA Surveillance a Setback for U.S. Cloud Services Overseas

Long before the National Security Agency’s PRISM program was exposed, technology industry executives had warned Congress that the Patriot Act and other laws that “give U.S. government authorities unfettered access to data stored with U.S. companies” are hampering global sales for American cloud services providers.

image: bagsgroove via flickr
bagsgroove via flickr
(Image: bagsgroove via flickr)

Long before the National Security Agency’s PRISM program was exposed, technology industry executives had warned Congress that the Patriot Act and other laws that “give U.S. government authorities unfettered access to data stored with U.S. companies” are hampering global sales for American cloud services providers.

Almost a year ago, the industry publication CIO reported:

“A panel of technology officials … warned members of a House subcommittee about the challenges of overseas expansion confronting the burgeoning cloud computing market, including privacy and security concerns and efforts by foreign governments to protect domestic providers at the expense of U.S. companies.”

Justin Freeman, corporate counsel for Rackspace, told CIO at the time that “concerns about data privacy … threaten to exclude American companies from competing abroad.” U.S. government officials reportedly dismissed the concerns, and a senior staffer at the Information Technology and Information Foundation accused foreign countries of fear-mongering in order to grow their own domestic cloud computing industries, according to CIO’s report.

But today Computerworld reports that European businesses predict that Amazon Web Services and Rackspace will be shunned there due to the NSA scandal, even though both have denied participating in PRISM. Under the headline, “US cloud providers may have a harder time in Europe following NSA revelations,” CIO reports that the CEO of Sweden’s City Network, Johan Christenson, once believed that U.S. cloud companies would be able to gain Europeans’ trust in a few years, but now says, “What has happened in the last week has set that process back a long time.”

Offering a dose of cynical realism, Computerworld quotes an IDC analyst who notes: “In many European countries, security agencies don’t have to go to a court to get access to cloud data. If companies thought about that, they would be a little less concerned about using U.S. cloud providers.”

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