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IT's Dilemma After NSA Leaks

The leaks by Edward Snowden revealing the U.S. National Security Agency's (NSA's) classified but wide-ranging PRISM data-gathering effort -- which is aimed at intercepting and thwarting terrorist threats -- have had a chilling effect on customer confidence that data is safe in the cloud.

For better or worse, these revelations have also caused consumers and enterprise customers to cast a more skeptical eye on Microsoft and other key tech stalwarts including Google, Apple, Facebook, Amazon and Yahoo. I say "more skeptical" because there was no shortage of cynicism about what role these providers were already playing in sharing their data.

Snowden cast Microsoft as a key villain when one of his leaks charged Redmond was cooperating with the NSA in letting it tap into e-mails from (formerly Hotmail), data stored in SkyDrive, and Skype chat sessions and phone conversations.

Microsoft General Counsel Brad Smith swiftly denied allegations that the U.S. government had back-door access to data and encryption keys. "Microsoft does not provide any government with direct and unfettered access to our customer's data," Smith stated. "Microsoft only pulls and then provides the specific data mandated by the relevant legal demand." The company only responds to requests for specific accounts and identities, and governments must serve court orders or subpoenas for account information, he added.

The problem is the U.S. government has tied the hands of providers as to how much they can reveal about their level of cooperation. Smith argued Microsoft wants to disclose how it handles national security requests for customer information, but as of mid-August, the U.S. Attorney General has denied the company's request to allow it to be more transparent. "We hope the Attorney General can step in to change this situation," Smith said

Meanwhile, customers and enterprises are rethinking how they use the cloud for their data. The Information Technology & Innovation Foundation (ITIF) in early August released a report predicting that absent of the U.S. government taking action, recent security concerns could cost the cloud computing industry anywhere from $22 billion to $35 billion.

A survey by the Cloud Security Alliance (CSA) found 56 percent of respondents outside the United States are less likely to use a domestic cloud provider, while 10 percent have actually cancelled a cloud deployment here. Less than one-third of all participants -- including those domestically -- believe there's adequate transparency on how often the government accesses their information.

It's possible the U.S. government will never let Microsoft and other cloud providers fully disclose what covert activities go on in the name of national security. That's a consideration that has to play into every enterprise IT decision maker's choice to use any cloud service, whether it be Amazon Web Services, Windows Azure, Office 365 or even letting employees use consumer services such as Box, Dropbox and SkyDrive.

President Obama's proposal Friday to improve transparency was a step forward -- but it will certainly face political obstacles.

We want to know how you're addressing these issues. We've fielded a survey to get your views and we'll be reporting on what you can do to protect your organization's data in the cloud. You can also e-mail me your thoughts at

Posted by Jeffrey Schwartz on 08/12/2013 at 1:15 PM


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