NSA Backlash Makes Foreign Companies Wary Of US Cloud Data Services
January 11, 2014

NSA Snooping Triggers Foreign Business Flight From US Cloud Services

Enid Burns for redOrbit.com - Your Universe Online

A survey conducted by Vancouver, British Columbia-based web hosting service PEER 1 finds that a quarter of Canadian and UK businesses are looking outside of US borders for data storage. Companies outside of the US are leery of using data services hosted in the country due to the spying activities of the US National Security Agency (NSA).

According to survey results, PEER1 finds that 25 percent of businesses are moving data outside of US, which the company attributes to privacy scandals that were revealed over the past few months as NSA-contracted analyst Edward Snowden leaked documents of NSA activities. The report also finds 96 percent consider security and 82 percent consider data privacy their top concerns.

The survey, commissioned by PEER1, was given to 200 UK and Canadian businesses with a workforce smaller than 250 employees.

Among the cohort, three concerns have emerged as crucial for a data provider: the survey finds that security (96 percent); performance (94 percent) and reputation (87 percent) rank high for cloud data services. The study also finds that almost 70 percent of respondents say they would sacrifice performance to ensure data sovereignty.

“With data privacy and security concerns top of mind after NSA, PRISM and other revelations around the world, businesses in the UK and Canada are taking real action,” said Robert Miggins, SVP business development, PEER 1 Hosting, in a corporate statement. “Many are moving data outside of the U.S., and even more are making security and privacy their top concerns when choosing where to host their company data. It’s clear that hosting and cloud providers need to take note and offer their customers true choice in terms of the locations and environments where they store their data, ensuring they can maintain security, compliance and privacy to the best extent possible.”

There isn't a complete flight from US data service providers. The US remains the most popular place for companies to host data for organizations that contract with data service providers outside of their own countries.

As many as 60 percent surveyed say they don't know as much as they should about understanding the current data laws. Privacy and security laws confuse a further 44 percent of survey respondents.

One PEER1 client dealing with data flight, iDigital, explained that privacy is particularly important to Canadians, Information Week reports. iDigital managing director Matt McKinney noted that customers started asking where iDigital servers were housed about two or three years ago after the US Patriot Act took effect and began to raise concerns. News of the NSA's activities have only raised those concerns to a higher level. Information Week reports that the NSA leaks "were the straw that broke the camel's back. Eight out of 10 questions from customers now deal with governance, compliance, and data storage," McKinney said.

While the activities of the NSA are extensive, other governments have been found to spy on computer users and digital records. The German government has admitted to spying in the past. One of the later revelations from Edward Snowden this past fall was that UK intelligence organizations were using NSA techniques to spy on its citizens.

A number of US cloud service providers have issued assurances that they do not provide data to the NSA including iDrive and Syndocs. Google also said that it is employing auto encryption of cloud data to improve its security.