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CNET reports on the CLOUD Act being signed into law by President Trump, and how this legislation increases the US governments access to online data stored by US companies regardless of where the servers are located:

Lawmakers added the CLOUD Act (PDF), which stands for Clarifying Lawful Overseas Use of Data Act, to the spending bill before the final House and Senate votes Thursday. It updates the rules for criminal investigators who want to see emails, documents and other communications stored on the internet. Now law enforcement won’t be blocked from accessing someone’s Outlook account, for example, just because Microsoft happens to store the user’s email on servers in Ireland.

The law also lets the US enter into agreements to send information from US servers to criminal investigators in other countries with limited case-by-case review of requests.

The CLOUD Act offers an alternative to the current process for sharing internet user information between countries, called MLAT, or a mutual legal assistance treaty. Both law enforcement agencies and tech companies say using such a treaty to request data is cumbersome and slow. The fix has the technology sector divided though. Tech companies, such as Microsoft, favor the change. But privacy advocates say it could help foreign governments that abuse human rights by aiding their access to online data about their citizens.

This sounds all fine and dandy, but how effective will it really be? How will this law not be abused to collect data on individuals not necessarily accused of a crime?

Sen. Ron Wyden, a privacy-oriented Democrat from Oregon, said in a letter last week (PDF) that while the MLAT process needs to be updated, the CLOUD Act has a big problem in the way it lets the executive branch hash out individual agreements with foreign companies on data sharing. That “places far too much power in the President’s hands and denies Congress its critical oversight role,” Wyden wrote.

Neema Singh Guliani, legislative counsel at the ACLU, said the bill doesn’t account for the fact that a foreign country’s government might have a good human rights record one day, but start eroding those rights after coming to a data sharing agreement with the US. “Human rights are not static,” she said.

These are valid concerns that are more worrisome than not. How, and who, will prevent the global governments from abusing this capability?

Hardware vendors like Dell, HP, Cisco and others have a potentially bleak future ahead of them as more and more companies move from administering their own suite of servers to using cloud-based solutions like Amazon Web Services. This story about how Yamaha went all-in on AWS should terrify these companies because they stand to lose a lot of revenue (emphasis added):

Every month, the lease for one or two of these servers would come due, and a new server sent to replace it. His infrastructure team had to back up the data, then test and install the apps to get the new server running.

It was tedious work and an expensive use of manpower.

“We said, this is not sustainable,” Thomas said.

He thought about hiring out for that work, but the bids came it at a laughable $1 million a year just for labor, and didn’t include the cost of the new servers.

So he decided to go all-in with the cloud. In November 2013, he approached several cloud computing companies including Amazon and asked for bids.

Amazon, which grew up as an ecommerce retailer, isn’t known for its enterprise sales expertise or support (though it is beefing itself up in that area).

So Amazon turned Yamaha’s request for a bid over to its partner 2nd Watch, who won the bid and then spent a year helping Yamaha move all of its data, servers and apps to AWS. 2nd Watch also provides Yamaha with ongoing cost management tools.

“I can tell on a daily basis how much infrastructure is costing us,” he explains and he and his team can then make sure that they are not overpaying.

In July 2014, all of the company’s IT, supporting some 450 employees in the US, was running on Amazon’s cloud with three exceptions:

  • The corporate accounting app Oracle enterprise resource planning app (ERP)
  • The Cisco telephone system
  • A bunch of employees’ shared files which were set up in personal drives.

He’s now in the process of moving those last items to the cloud, too. He just asked for bids from Box, Dropbox, and other file sharing companies and is working on bids for cloud versions of Cisco’s telecom services, available from Cisco, AT&T and others.

While hardware vendors will still have the opportunity to sell to the likes of Box, Dropbox, Amazon, and other cloud vendors, they will likely not be generating nearly the same amount of revenue as in the past. The number of physical devices being purchased pales in comparison to the previous years.

These companies better get ahead of this trend and start skating to where the puck will be otherwise they will find themselves out of the game altogether.