Cloud computing has been very slow to catch in the EU, not because they didn’t know about it or didn’t have the resources to make use of it, but because most Europeans are considerably more paranoid about the security of their data.

Because of this many European firms still use off-grid data servers or even old-fashioned and excruciatingly slow physical filing systems to store their sensitive data. Not only is confidence in data security low, it’s getting lower. Constant news of sensitive data being hacked into by various cyber-groups and then occasionally leaked through groups like Wikileaks makes people considerably less willing to trust new always-accessible cloud systems.

FISA Act

The Foreign Intelligence and Surveillance act gives the US government the right to perform physical and electronic surveillance on people and businesses inside the US. It was passed in 1978 and amended in 2002 to allow for domestic wiretapping without a warrant and in 2007 to allow for warrantless surveillance of foreigners outside the US, which means anyone, anywhere, regardless of if they’re under American authority or law. That, however, is a topic we could write a whole book about. The important part is that under American law the US can do just about anything it would like to collect private information from anyone in the world.

Data Trading

Because most developed countries have strict laws prohibiting governments from spying on sensitive personal and corporate data EU governments are now often less knowledgeable about their own countries than the US. You see, the US government considers it to be its business to gather data from any US based firms, which includes their EU subsidiaries, regardless of whether those subsidiaries actually conduct business in the US. This means that the US government can (and does) make a lot of money by selling information about EU corporations to their own countries.

Data Security Measures

While cloud systems and cyber-security firms have been working for decades to build secure spaces on the web, the government can often simply pressure media giants like Google, Microsoft, Facebook, or Amazon into releasing data about themselves and others. Additionally the threat of cyber-terrorism is steadily increasing as the incidences of major cyber attacks increase and bring down or compromise huge sites both in the public and private sectors.

The Impact on Business

Since it’s considerably more expensive as well as politically dangerous to run physical surveillance inside foreign countries it’s still possible for these companies to protect their information by simply keeping it off of the web. However as a result of this they naturally miss out on the vast benefits that come from having their data available anywhere at the drop of a hat. Besides that it’s also considerably more expensive to host internal data banks and pay an in-house team of IT professionals to keep everything running smoothly and up to date. The end question is whether the benefit of data security is greater than the cost of highly efficient SaaS ERP technology.

About the Author

Richard Turkel writes about all aspects of business technology, database management to IT leadership. He currently writes for BMC, a company that offers IT management software.