A few months ago, ITWorld had an article where they reported that in the wake of the Edward Snowden revelations many U.S. hosting companies and cloud providers are now facing pressure from international customers to have data cordoned off of the U.S. infrastructure.
In a conversation with a provider of public cloud supply chain solutions a key executive confirmed that they were seeing the same thing. This executive mentioned prospective and existing clients desire to know where their datacenters resided; and they don’t want those datacenters to be located in the U.S. Logically the kind of transportation movement data that resides in these systems would be most relevant to a nation in times of war, but this executive stated that customers were not saying why they were concerned, “for them it was a matter of principle that their data be secure.”
An executive that works for a European software supplier that provides both enterprise and supply chain applications revealed at an industry conference that security fears have spread. It is not just European companies worried about government surveillance, it is also US companies. And it is not just US suppliers of cloud solutions that are facing questions about the security of their solutions, European companies are fielding these questions as well.
This executive mentioned that if outside parties have access to a company’s financials, the stock price that will result in quarterly conference calls can be “reverse engineered” prior to the public release of the financial results.
Countries like China, Russia, and France have been charged with using their intelligence agencies to conduct industrial espionage on behalf of domestic companies. NSA surveillance has been portrayed as being designed to root out terrorism. However, the Snowden leaks have raised fears about how governments might use private company data.
According to Dick Slansky, Director of Product Lifecycle Management Research at ARC Advisory Group, PLM data is among the most proprietary and important of all data that companies possess. Their Intellectual Property is their lifeblood.” Mr. Slansky pointed out that private cloud solutions are increasing rapidly in the PLM sector, but that these solutions are inherently more secure than public cloud solutions. However, “product design is an increasingly collaborative process where products are designed in conjunction with key suppliers and outsourced engineering services companies. This requires a more robust infrastructure, and hosted solutions can make sense in this situation. Moreover, small and medium sized companies find hosting beneficial and more cost effective because it relieves them of investing in and maintaining resources in IT infrastructure.”
Trust is a hard thing to recover once it has been lost. Unfortunately for many enterprise and supply chain suppliers of cloud solutions, the actions of the NSA are adversely affecting their ability to provide hosted and public cloud solutions.
