Snowden after-shock: HK, S'pore became most popular off-shore DC locations

Almost nine tenths of ICT decision-makers are changing their cloud buying behaviour as a direct result of Edward Snowden's allegations of large scale clandestine cyber-surveillance, a study published today by NTT Communications claims.

NSA Aftershocks: How Snowden has Changed IT Decision-Makers' Approach to the Cloud is based on a survey of 1,000 ICT decision-makers from France, Germany, Hong Kong, United Kingdom and the USA. The study highlights nine after-shocks from Snowden's revelations, which are compelling companies to rethink how they use cloud computing:

  1. Almost nine in ten (88 percent) ICT decision-makers are changing their cloud buying behaviour, with over one in three (38 percent) amending their procurement conditions for cloud providers
  2. Only 5 percent of respondents believe location does not matter when it comes to storing company data
  3. More than three in ten (31 percent) ICT decision-makers are moving data to locations where the business knows it will be safe
  4. Around six in ten (62 percent) of those not currently using cloud feel the revelations have prevented them from moving their ICT into the cloud
  5. ICT decision-makers now prefer buying a cloud service which is located in their own region, especially EU respondents (97 percent) and US respondents (92 percent)
  6. Just over half (52 percent) are carrying out greater due diligence on cloud providers than ever before
  7. One in six (16 percent) is delaying or cancelling contracts with cloud service providers
  8. More than four fifths (84 percent) feel they need more training on data protection laws
  9. 82 percent of all ICT decision-makers globally agree with proposals by Angela Merkel for separating data networks

More conscious of security

Taylor Man, executive vice president, Cloud Business Division of NTT Com Asia said, "The NSA allegation has had a broad impact on the ICT industry. Many companies are more conscious of the systems' security and have changed how they manage their cloud security budgets (76% of all respondents, 73% of those from Hong Kong). Our survey also found that, due to the NSA allegation, 71% of the Hong Kong respondents said they have taken a heightened interest in where their data is stored, the highest among all regions, and 59% would carry out greater due diligence than ever before i.e. closer scrutiny of cloud SLAs. 58% of Hong Kong respondents also said that they would spend more resources in auditing their cloud suppliers' security credentials, compared to 67% worldwide."

"The survey also found that location of the services has become a major determinant. 69% of the Hong Kong respondents said they would feel most comfortable buying a cloud service offering from the Asia Pacific region, followed by North America (41%) and Europe (39%)," he added.

Hardened attitudes

Len Padilla, Vice President Product Strategy, NTT Communications in Europe, said, "Our findings show that the NSA allegations have hardened ICT decision-makers' attitudes towards cloud computing, whether it is modifying procurement policies, scrutinizing potential suppliers or taking a heightened interest in where their data is stored."

He continued, "Despite the scandal and global security threat, business executives need to remember that cloud platforms do help firms become more agile, and do help foster technology innovation, even in the most risk-averse organizations. ICT decision-makers are working hard to find ways to retain those benefits and protect the organization against being compromised in any way. There is optimism that the industry can solve these issues through restricting data movement and encryption of data."

Methodology

NTT Communications commissioned market research firm Vanson Bourne to carry out an extensive survey of 1,000 IT decision-makers from the UK (200 respondents), France (200 respondents), Germany (200 respondents), Hong Kong (100 respondents), and the USA (300 respondents), in February and March 2014. Sixty percent of respondents were drawn from businesses with 1,000 employees or more, representing sectors including financial services, retail, manufacturing, professional services, IT, and energy.

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