Data Protection: NSA Revelations Costing Businesses Billions

A survey has found that data-mining and surveillance revelations have forced businesses to rethink the way they store sensitive data, potentially costing them billions in new digital infrastructure.

The study by NTT Communications found that 90% of businesses surveyed were questioning the way they use cloud data storage in light of the documents leaked by Edward Snowden, a former contract worker for the National Security Agency (NSA).

The NSA leaks revealed that the agency, in conjunction with counterparts in other countries including Britain's Government Communications Headquarters (GCHQ), carried out dragnet surveillance on businesses and citizens on a level that one US judge described as "Orwellian in scope".

To prevent sensitive information being gathered by intelligence agencies, many businesses were apparently shunning the cloud and securing data on local networks.

A third of those questioned in the survey - 1,000 business leaders in the US, Europe and Asia - said they were relocating company data to "safe" locations.

Ninety-seven percent of EU respondents said they preferred to buy cloud services in their own region.

A recent report in the New York Times revealed that Microsoft had lost customers as a result of the spy scandal, including the government of Brazil, while IBM was spending more than $1bn to build data centres overseas to reassure foreign customers.

"Our findings show that the NSA allegations have hardened ICT decision-makers' attitudes towards cloud computing," said Len Padilla, vice-president of strategy at NTT Communications in Europe.

"Whether it's modifying procurement policies, scrutinising potential suppliers or taking a heightened interest in where their data is stored."