Warning over risk of storing data overseas

Increasing numbers of companies are outsourcing their data storage needs to cloud computing providers, which host the information at data centres across the world.

Harrogate-based inTechnology said the US government’s Patriot Act makes data held in the European Union vulnerable to inspection by US law enforcement agencies if the cloud provider is headquartered in the US, such as Microsoft UK.

It also claims that US-based subsidiaries, such as the BBC’s US office, are also vulnerable to inspection.

A Google spokesman confirmed to the Yorkshire Post that information it holds outside the US “may be subject to lawful access by the US government”.

A Microsoft spokeswoman said that any company with a presence in the US is legally required to respond to US government demands for information from companies that legally hold data.

The EU is working on reforms to data protection laws and believes there is a need for an overarching agreement between the EU and the US on the exchange of data, said an EU spokesman.

Phil Hambly, marketing director at inTechnology, said: “If you do not want to expose your data to the risk of being picked over by the US government, play safe.

“Use a credible UK-based managed service provider with its own UK-based data centres.”

He added that financial and legal institutions are bound by law to ensure that client data does not leave the UK.

For other organisations, Mr Hambly said that concern for corporate integrity makes it important that they know where their data is stored and who is looking at it.

Demand for cloud computing services is expected to soar in the coming months with surveys showing that it will be the number one technology initiative for businesses in 2012. Mr Hambly said: “Keeping all your data in-house is virtually impossible. Hosted cloud solutions are now part of everyday business life.”

The company provides managed IT services through what it calls the private cloud.

Bryn Sage, chief operating officer, said: “Our customers use the private cloud – they know where that information is.

“It’s in our UK data centres. If you go into the public cloud, you don’t know where your data is stored.”

The £40m-turnover company operates a data centre in Harrogate and next year will open another in Reading, featuring state-of-the-art cooling technology.

It also hires space from other providers in the UK. They are all linked together to create a network that can withstand multiple breaks. The network is supported by a call centre in Yorkshire.

Clients include Towergate Insurance, Howdens Joinery and Barker and Stonehouse, the furniture retailer.

The market for cloud computing is expected to rise from $40bn per year to $260bn by 2020.

Technology research firm Gartner’s recent report into cloud computing suggested that the cloud is at the “peak of inflated expectation”, which Mr Sage said could result in many customers being disappointed with poor service as IT resellers jump on the cloud bandwagon.

Ahead in the clouds

In simple terms, inTechnology has produced a guide to cloud computing. “In the beginning,” explains the guide, “each office in a company had its own separate IT and communications infrastructure.

“As networks improved and communications traffic started to gather pace, businesses realised they could save money by bringing their IT infrastructure and services together at head office. Remote staff were complaining about slow applications. When the link to the head office broke the whole chain lost its connection to voice and data services. To overcome this, managed service providers moved organisations’ IT and communications infrastructures into the cloud.”