Cloud computing is now an established way of doing business. Software tools for HR, ERP, CRM and other such services are now used in the cloud by all types of company, offering flexibility, reduced costs and regular feature upgrades.
Tech giants such as IBM, HP, Microsoft and Oracle are spending millions and devoting endless staff hours on developing new platforms, products and tools to meet this demand, as well as expanding data centre footprints into numerous regions.
This is all to make sure that vendors can reassure customers on issues ranging from security and data sovereignty to latency and data access.
However, all this could be in vain if the US government has its way.
A court battle is raging between Microsoft and the US authorities over whether the government has the right to access data on a US company’s servers when stored overseas. In this case, Ireland is the country caught in the crossfire.
The US government has already won the case once, but Microsoft refused to hand over the data until its appeal has been heard.
Doing so put Microsoft in contempt of court, underlining the extent to which the company is willing to fight its corner.
Microsoft's stance has been backed by other tech giants, including rivals such as Apple, HP and Cisco, as they too know just how much is at stake.
If the appeals court sides with the government the cloud computing market could be altered radically. Tech vendors will no longer be able to assure companies that their data is stored safely within their own country, free from prying eyes.
Instead, the data’s location becomes irrelevant, as the US could always request access, and the US company with the data would have to hand it over.
Many businesses may not see this as a terrible situation, arguing that they have nothing to hide, or failing to imagine a time when their data would be of interest. But the problem will be unnerving for many others.
This could lead them to shun US cloud providers, and instead look for homegrown companies which are free from the reach of the US.
This could prove a major boon for European companies hoping to establish services in the cloud market, where few companies have any notable presence at this time.
It could also force many firms tempted by the cloud to turn their back on the idea and retain on-premise installations, and even force those who have moved to the cloud to do a U-turn and return to the on-premise world.
This would be a major blow for firms such as IBM, HP, Amazon Web Services and, of course, Microsoft. The rise in cloud computing is seen as a key growth area, helping to make up for falling hardware sales.
This could mean millions of dollars of lost revenue, seriously harming their profits.
Of course, the court could eventually find in Microsoft’s favour, returning the status quo and giving more reassurances to businesses that their data is safe.
Even so, legal methods still remain for accessing data, but with far greater controls and caveats on how information can be collected.
This is something about which Ireland has already raised concerns, questioning why the US authorities are trying to circumvent established, well-used laws.
“Co-operation in the area of law enforcement is a fundamental element of our international relations, in particular with our partners in the US, which is why the issue of the transfer of the data itself is not objectionable, but rather the process that is being used," Ireland's minister for data protection, Dara Murphy, said at the time.
Furthermore, even if Microsoft does lose the latest round of the case it will almost certainly raise challenges until it reaches the highest courts in the land.
Whatever the outcome, I am sure there will be many companies that continue to embrace the cloud wholeheartedly as the benefits prove too great to ignore.
Nevertheless, the court's decision could send the cloud industry down a long, complicated and tangled road that halts its steady assent to dominance and instead opens up new debates, disagreements and, of course, opportunities.
For more information on the cloud, visit the Intel IT Center.
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