PATRIOT Act and privacy laws take a bite out of US cloud business
While there are plenty of technical and functional concerns that have slowed adoption of public cloud computing and software-as-a-service, American companies trying to sell their cloud services outside the US or to large multinational organizations have another handicap to overcome: the USA PATRIOT Act. European, Asian, and Canadian data privacy rules and concern about US surveillance of data crossing international boundaries have even been used to market European data centers’ services. Today, ComputerWeekly reported that BAE Systems had ditched Microsoft Office 365 over PATRIOT Act concerns, because Microsoft could not guarantee the company’s data wouldn’t leave Europe.
Microsoft’s managing director in the UK, Gordon Frazer, made that admission in June at the Office 365 launch in London. After researching the PATRIOT act, Microsoft found that regardless of where data was stored, it could not ensure that data would not be turned over to the US government as the result of a National Security Letter or other government request, because the company is governed by US law…

