Jul 07, 2013

Will concerns over NSA monitoring harm US cloud providers?

While speaking with a couple friends from Europe, they expressed concern about using US based cloud services providers, because of uncertainty over whether their data was being harvested by the US government in the name of “national security.” One of them was adamant that he would not use American based cloud services, and in fact felt that he would be violating his fiduciary duty to shareholders if he continued to do so. Will the revelations about how widespread NSA data gathering has become have the unintended consequence of damaging American businesses?

Forget just US based cloud services. All cloud services are suspect now. Don't put anything private on any of them. That's the only way to deal with this.

Certainly, although it may not be to a huge degree. Keep in mind, we really don’t know the extent of government monitoring, although it is clearly expansive. The funny thing is that a company that tries to avoid US based companies over this concern may actually expose themselves to greater potential monitoring/data harvesting in another country, including their own. One thing that has come out from Snowden’s whistle-blowing is that many of America’s EU allies also do much the same thing, including Spain, France, Germany and Great Britain.  


The German Minister of the Interior issued a public statement that Germans who were concerned about privacy should avoid using anything that runs on US servers. In other words, yes, I think it will impact American business. And perhaps it should. Nothing annoys me more than those spineless, myopic sorts that say things like, “If you don’t have anything to hide, why do you care.” That’s so bogus. People that are so craven that they will abandon liberty for themselves and others for the mere hope that “someone” will keep them safe are truly contemptible. 

Christopher Nerney

If the anecdote you relate about your friend is repeated enough, it surely will have an overall negative impact on U.S. cloud providers. But since the latest NSA scandal (remember, USA Today reported on NSA surveillance way back in 2006) broke in early June -- just one month ago -- we're not going to know until we see earnings reports from Q3, the first full quarter after the latest NSA story broke.

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