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U.S. cloud vendors adjust to Snowden effect, Privacy Shield

Clint Boulton | Sept. 5, 2016
AWS, Microsoft and Google are building data centers in Europe to address privacy concerns in a post-Snowden world. Cloud infrastructure revenue is rising, but how much better could be for U.S. vendors?

Casper says common questions from clients include whether vendors must establish a new subsidiary or build a data center to meet data residency and sovereignty requirements. He pointed to the deliberate expansion of data center facilities by AWS, Microsoft and Google in recent years.

But even that sometimes isn’t enough. In one scenario, which Casper calls the most extreme of its kind, Microsoft owns a data center in Germany that is actually operated by Deutsche Telecom. “Providers must adapt,” he says. “Because of Snowden, Safe Harbor and so forth they have to adapt to the market somehow.”

U.S. cloud companies should be killing it in Europe

IDC’s data suggest U.S. cloud vendors have finally gained a solid footing in Europe. But the reality is that vendors could be performing much better in Europe if it weren’t for collective distrust of U.S. technology firms, which dates back as far as the U.S. Patriot Act in 2001, says Casper.

These concerns have persisted through Snowden's revelations, the defunct Safe Harbor Framework and its replacement, Privacy Shield, which governs the processing of personal information of EU citizens on servers in the U.S.

More than 200 companies, including Microsoft and Salesforce.com have been certified under Privacy Shield. AWS is still in the certification process, though it is more of a formality. AWS customers have full control of the movement of their data and have always had the choice of the region in which their data is kept, wrote AWS CISO Stephen Schmidt in a blog post last month.

Vogels says AWS provides customers data protection agreements via contract clauses that have been vetted by the European Commission's Article 29 Data Protection Working Party. 

Casper says that the privacy concerns and associated EU regulations have perennially dampened market forecasts for U.S. technology vendors in Europe.

"Without any of these factors [Patriot Act, Snowden, Privacy Shield], the cloud would have taken off stronger in Europe than it actually did," Casper says. "It is an ongoing discussion: How much power do U.S. cloud providers have over European content?"

 

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