US Cloud Privacy Concerns Talked Up by Foreign Providers

By | Aug 7, 2012

As cloud computing has evolved into an adolescent technology, so too has its market, with competitors large and small fighting for their piece of the virtual pie. But the expanding options for companies means greater pressure from providers outside American borders, and other nations are now playing up U.S. cloud privacy issues—both real and embellished—to convince small and midsize business IT admins that local isn't always better.

Scare and Scare Alike

According to a July 26, 2012, article at PCWorld, technology experts are now warning government officials about the challenges of overseas cloud expansion. In a panel warning on July 25, tech experts told members of the House of Representatives that foreign nations are raising concerns about both US security and privacy to convince businesses on their own soil to stay local and to woo American companies that aren't yet certain how to proceed in the cloud.

For example, providers in other countries are starting to question the ability of US companies to keep data secure, using "scare tactics" to make businesses wonder about just how effectively their data will be guarded. Alongside that fear, some nations are also taking advantage of the highly publicized Patriot Act, which they claim gives US government officials free access to any data stored on American soil. While this isn't entirely true, security concerns about cloud computing make it an easy sell for midsize businesses just starting to head skyward or worried that their data might get snapped up in a police information raid meant for a different provider.

Mercantile Machinations

A recent Business Cloud 9 article discusses the efforts of nations like Greece, China, and Russia to shore up the effectiveness of local cloud providers. Daniel Castro of the Information Technology and Innovation Foundation (ITIF), says that "although US firms are the leading providers of Cloud Computing services, other countries are aggressively challenging US leadership in this market," in part by funding private clouds with public money. In France, for example, the government is footing one-third of the bill for the creation of a new cloud computing service. Restrictive laws aimed at forcing out non-local providers have been described as a form of "cloud mercantilism," and Castro wants the US government to get tough against other countries that try to use these kind of tactics.

For midsize admins, there are two sides to this story. Forcing local provider use on one hand defeats the purpose of a supposedly non-limiting technology —a solution that should ideally allow companies to store their data anywhere—with one that only moves the datacenter outside physical walls. There is an intrinsic feeling of security when data is stored locally, but global sanctions won't be able to cap cloud growth forever.

On the other hand, choices by the US government to stay out of cloud computing projects aren't something other nations need to echo. If they want to throw public money at virtual technology, that's their business. Sanctions and assertive international polices are all well and good, but ultimately the needs of small, midsize, and enterprise businesses will be what determines if cloud computing only achieves local growth or smashes national barriers. Midsize IT can expect to see greater incentives from US providers to stay local, but shouldn't ignore foreign firms—government subsidies can also make these viable choices. No matter the choice made, however, it's important to make it based on solid information, not scare tactics about U.S. cloud privacy or access.

This post was written as part of the IBM for Midsize Business program, which provides midsize businesses with the tools, expertise and solutions they need to become engines of a smarter planet. Like us on Facebook. Follow us on Twitter.

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