Oops. Huge national security fail.
They haven’t said much publicly, but behind closed doors they're scrambling to figure out how to get their pants back up.
This is only the very beginning of a huge shift that most of the US is blind to or in denial about.
All around the world, in government offices and in business board rooms, leaders are trying to figure out how to get off the US cloud.
The US cloud has been compromised and that trust just isn't coming back.
The barrier now is not political will, but a lack of local tech talent that can build viable alternatives to the US cloud services.
Many countries are kicking themselves now for not growing/poaching tech talent more aggressively.
Interesting times when having good web developers is a big national security asset.
You'll see the more tech rich countries move first. It's no surprise Germany's a first mover here.
Of course, with any big disruption there will be winners and losers.
Who the losers will be is obvious - US cloud companies.
Sure, they'll still have the US market (which is huge), but international markets will start drying up.
Skeptical? Google is hearing a huge sucking sound of money evaporating from Germany right now. Google's so big, they may not notice a few million yet, but I assure you, they will notice eventually. Karmic justice for short-sightedness in not out-lobbying the big defense contractors in Congress.
What's comical is how cheap it would be to out-lobby the defense contractors: http://www.opensecrets.org/industries/indus.php?Ind=D
The top contributing defense contractor (Northrop Grumman) only gave about $3 million last year. I'm sure they paid more than that for actual lobbyists, etc, but it's still not even petty cash at Google.
Of course, I don't mean to pick only on Google. There are many multi-multi-billion dollar cloud companies in the US that have been easily out-lobbied by the defense industry.
It would have been pennies compared to what they'll ultimately lose in the drying-up international markets.
So, who will be the winners? While security companies will see a boon, it's the open source companies that I think will see the biggest win.
With open, auditable code, countries can set up their own services. Of course, they'll need support and training and that's where the open source companies really shine.
It's important to remember that the goal for these countries will rarely be fool-proof privacy for each individual citizen. Instead, the goal is to prevent a foreign power from having deep intimate access to every detail of your populace.
Granted, many of these countries will use this transition to just spy on their own citizens. However, other countries will have a good functioning democracy and a citizenry that values privacy and will avoid those abuses.
For those countries that have robust protections and engender international trust, they'll have a big business advantage when it comes to foreign consumers.