Concerns about NSA surveillance driving some Canadian and UK companies to take their cloud computing business abroad.

Fully 1 / 4 of companies are moving data out of america due to revelations in regards to the scope of knowledge gathering by america National Security Agency, claims Canada-based cloud hosting provider PEER 1 Hosting.

Some qualifications apply: The survey behind the company’s assertion doesn’t cover 25% of all businesses. It describes findings from a ten-minute survey of 300 small companies — 250 employees or less — based within the UK and Canada.

When the sample is confined to simply Canadian companies, 33% say they plan to go data out people datacenters. Evidence of that exodus isn’t extensive: PEER 1 was ready to point to at least one client, iDigital, that have been handling data flight.

Matt McKinney, managing director of iDigital, an 85-person cloud hosting provider based in British Columbia, Canada, said in a phone interview that privacy is very important to Canadians, noting that the rustic was aggressive in facing online privacy through its regulatory agencies.

McKinney said customers began asking where iDigital’s servers were housed two or three years ago, when concern concerning the implications of the U.S. Patriot Act became more widespread. The NSA revelations last year, he said, “were the straw that broke the camel’s back. Eight out of 10 questions from customers now handle governance, compliance, and knowledge storage.”

During the past three hundred and sixty five days, McKinney said, a considerable choice of iDigital’s 18,000 customers were moving data that were housed in Dallas, Texas, to north of the border, despite the fees being slightly higher. He estimated that the corporate is handling 10 to fifteen migrations every week and claimed that other hosting companies like HostGator and Rackspace have seen customers move north.

Acknowledging that data could be sought by authorities in Canada, because it is inside the US, McKinney suggested that Canadian companies, as a result of cultural importance of privacy within the country, will be much more likely, and higher able, to withstand overly expansive demands for info than companies within the US.

“Companies like Microsoft and Google just should not have the choice to claim, ‘No, I won’t give it to you,’ due to the Patriot Act,” he said.

(Essentially, US companies do give you the chance to face up to, but could be forbidden under the Patriot Act from disclosing demands for info or legal filings in opposition of said demands. The level to which the united states judical branch sees a legal basis for opposing demands for access made under the mantle of national security is another matter.)

PEER 1’s survey finds that despite rising mistrust, the united states remains the preferred place for corporations to host data (51%) outside in their home countries. That means the perception that data insecurity is not less than as bad outside the u. s. . A Der Spiegel report says that the NSA has a lengthy catalog of exploits with which to compromise commercial IT gear, so it seems that the sole secure notebook is an abacus muffled in a black bag. Presumably, every national intelligence agency with even a modicum of ambition aspires to total information awareness.

There’s no doubt that the continued reports concerning the NSA’s reach and techniques, according to documents leaked by former NSA contractor Edward Snowden, have provoked anger, frustration, and requires reform among companies, legal experts, security professionals, and lawmakers worldwide.

In fact, PEER 1’s survey aligns with warnings from other groups with perhaps less of a vested interest in such findings. The data Technology and Innovation Foundation (ITIF), a technology think tank, projected last August that US cloud computing providers would eventually lose 20% of the foreign market to competitors. In dollar terms, it projected losses as high as $35 billion by 2016.

The ITIF based its projection on a July 2013 Cloud Security Alliance survey. It trusted 456 responses to an internet survey, 234 from the usa and 222 from other countries.

Daniel Castro, an analyst on the ITIF, said in an email that PEER 1’s findings are at the high end of what he’d expect. He said his organization’s previous estimate assumed not more than a 5% drop in foreign companies buying cloud computing services within the first year.

While noting that that value of cloud contracts with small businesses isn’t easily in comparison to what medium and big companies buy, he said that PEER 1’s findings support the ITIF estimate and indicate that policymakers need to be being attentive to the difficulty.

But Castro said the usa government has didn’t respond adequately to the industrial impact of its intelligence operations. “US companies are at an unfortunate disadvantage and the intelligence community has done little to remedy this case,” he said. “The policies that caused this example haven’t changed and are currently in direct conflict with the commercial process of the nation that is to advertise a degree playing field for US companies abroad.”

Thomas Claburn is editor-at-large for InformationWeek. He have been writing about business and technology since 1996 for publications akin to New Architect, PC Computing, InformationWeek, Salon, Wired, and Ziff Davis Smart Business. Before that, he worked in film and tv. He’s the writer of a science fiction novel, Reflecting Fires, and his mobile game Blocfall Free is accessible for iOS, Android, and Kindle Fire.

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