Prism Is A Huge Blessing For European Cloud Companies

American mass government surveillance of its own citizens and foreign civilians will have a negative impact on the American cloud computing industry, as it undermines the trust foreign companies have in American based firms.

I recently read an article by Ki Mae Heussner that asked the question” In post-PRISM world, how much does Europe’s cloud industry stand to gain?”. Well, that question is not nearly as philosophical as it is portrayed. European companies are going to gain a lot, and there are very good reasons why.

Heussner cites Dan Gilmore of Arizona State University, who said “…it depends on whether you think European governments won’t do exactly the same thing with providers in their own jurisdictions.” I respectfully disagree. I do not believe it depends on that.

National Security

There is a huge difference between allowing your own government to look at your data for your own national security, and allowing a completely unaffiliated foreign government access to your data for someone else’s national security. The latter is never going to be beneficial to you, and has no prospect of being anything but harmful.

Furthermore, no German IaaS provider is going to be convinced to give up your personal data because President Obama calls them up on the phone and tells them it’s in America’s national interest. If it is the local government that calls for domestic security reasons, then at least the providers can justify giving up the data as being in their own, and in the customers’ best interest. American IT hosting is best for American companies, who benefit from American security efforts.

Democracy is Local

Another important aspect of the situation that should not be dismissed is that local companies, the kind who are small enough to need IaaS providers, want their data in places where they still have some say over what is done with it. While the data is stored within their own country, both private voters and smaller companies can realistically influence the laws and regulations regarding the handling of their data. If it is within the EU, this is diminished, but there is still some accountability.

American democracy doesn’t care what Europeans think, and Europeans know this. Once their data is being stored on U.S soil, they no longer have control of it. Furthermore, they have exactly no influence at all regarding the regulations that protect their data, or the evolution of those laws in the future. If the NSA gives itself an exemption regarding data belonging to foreign companies, as they already have with the private data of foreign nationals, then there is exactly nothing they can do about it.

National and Economic Interests often Align

Local IaaS providers have less motivation to steal trade secrets. There is a very good reason that American high tech manufacturers aren’t trying to hire Iranian IaaS providers. While that is a very extreme example, it applies across the board. Any company understands that it isn’t a good idea to entrust their sensitive data to a firm that can be forced to give it up by opposing interests, and so do local governments.

Even though many European governments have been caught cooperating with the NSA, this is no reason to assume that local companies will suddenly lose all faith in their own governments. Those governments still work in their own interest, filtering the information that is shared to avoid giving away important technology and research, because that would be harmful to their own economy.