PRISM as windfall for non-U.S. cloud providers

Amazon(s amzn), Microsoft(s msft), Hewlett-Packard(s hpq), IBM(s ibm) and other American tech vendors must be very, very worried about PRISM and the reverberations the NSA data collection program will have on their prospects. Europe is a key target market for the big public (and private) cloud businesses these vendors want to build and, in case you haven’t noticed, much of Europe is not thrilled about our government’s penchant for gathering data on citizens.
The various cloud contenders from the E.U. would have to be brain-dead not to try to turn concerns about massive U.S. data gathering into a commercial advantage. Even before NSA renegade Edward Snowden’s disclosures hit early last month, European tech companies were using the USA Patriot Act as a lever to keep European workloads in Europe.
Simon Wardley, researcher for CSC’s Leading Edge Forum, chimed in loud and clear on this earlier this month in a blog post advocating the use of PRISM by European companies to forge ahead in cloud.
Wrote Wardley:

“Do I like Prism .. yes and god bless America and the NSA for handing this golden opportunity to us.”

Look for companies in Europe that don’t want to see workloads flow to Amazon or other U.S. companies to keep beating this drum. The state-supported telcos in France and Germany were already well down this path last year, agitating for nationalistic clouds
In a new survey by the Cloud Security Alliance more than half (56 percent ) of 207 respondents who identified themselves as non-U.S. citizens said they’d be less likely to use U.S. clouds because of the Snowden disclosures. On the other hand, 64 percent of self-described U.S. respondents said that PRISM disclosures did not make it harder for their companies to do business outside the country.
Take these results with a grain of salt — the  respondents were not verified in any way, but again, any European company worth its salt trying to grow its cloud business won’t, in the words of Rahm Emanuel, let a good crisis go to waste.
Meanwhile when Amazon CFO Thomas Szkutak was asked on the company’s earnings call about AWS prospects abroad, he gave a standard Amazon non-answer:

“… the AWS business is expanding, and its incredible opportunity globally. We recognize that, the team recognizes that. And we’ll continue to work on that on behalf of customers.”

I happen to think Amazon is already prepping to deal with demand for local on-site clouds in various non-U.S. localities to satisfy data privacy requirements, but given that Amazon is a U.S. entity subject to U.S. laws, there could be complications there.
PRISM and its fallout for U.S. and E.U. vendors will be a hot topic for Wardley and others speaking at Structure: Europe in London in September, so stay tuned.
csa survey