Microsoft to Non-US Customers: Store Data Offshore, Off NSA Grid (analysis)

Written by David Michaelis

Microsoft breaks rank, becoming the first tech company to offer non-U.S. users the option to store data outside the U.S. — and outside the reach of the NSA. — In stunning news this week, Microsoft broke rank. In response to worries about the NSA data dragnet, Microsoft execs said the firm will offer non-U.S. customers the option of having data stored outside American borders. It doesn’t completely shield customer data from NSA e-surveillance activities, but it makes getting at the data a bit harder.

The question now is: Will Google, Amazon and Yahoo follow suit? The reaction from Microsoft comes just days after U.S. President Barack Obama gave a long-awaited speech addressing privacy advocate concerns about NSA e-surveillance projects. In the speech, he offered little or no concession to tech giants asking to opt out of NSA programs.

UPDATE_28 January – Google Eric Schmidt rejects Microsoft approach in Davos

Mr Schmidt expressed doubts about Microsoft’s decision to allow foreign customers to have data stored on servers outside the US to provide protection against surveillance by the National Security Agency. This would not stop the agency requesting such data under US law, he said. “My understanding is that data in another country is still subject to [US intelligence] laws. It is not obvious to me how you get around that rule. You would have to transfer the assets to a foreign corporation,” he said. see FT.

Microsoft’s move to keep data outside U.S. borders, as reported by the Financial Times, would place that data out of the NSA’s legal reach. It puts the data off U.S. soil and under the protection of other countries’ laws.

The move also pits Microsoft against such U.S. Internet companies as Google, which has so far opposed offshore hosting due to cost.

At the very least, this is a clever marketing move on Microsoft’s part — and it will do a lot to regain the global community’s trust in Microsoft.

microsoft’s surface with windows rt resize

According to the Financial Times:

Microsoft will shield foreign users data and will have their personal data stored on servers outside the US, breaking ranks with other big technology groups that until now have shown a united front in response to the American surveillance scandal.Brad Smith, general counsel of Microsoft, said that although many tech companies were opposed to the idea, it had become necessary following leaks that showed the US National Security Agency had been monitoring the data of foreign citizens from Brazil to across the EU.”

Breaking Rank or Breaking Bad?

Like all USA companies, Microsoft needs to comply with requests when U.S. officials serve it with warrants to hand over data. But the more-alarming issue for privacy advocates is that the NSA is crawling data without a warrant.

Storing data out of the country, as Microsoft is offering, does not completely secure the data. But it’s a step in the right direction. It’s another layer of protection against the NSA.

Encrypting all communications, and the inherent legal issues of handing over data stored in another country could slow down the NSA.

In all likelihood, this is an expensive financial investment. So Microsoft’s return on investment (ROI) must lie within the global marketplace.

For, I’m David Michaelis.

Based in Australia, David Michaelis is a world-renowned international journalist and founder of Link Tv. At, he covers the global beat, focusing on politics and other international topics of note for our readers in a variety of forums. Email him at