Chief U.S. District Judge Loretta Preska in Manhattan has ruled that Microsoft must comply with a federal search warrant and hand over a customer email—even though that email is stored in Microsoft's cloud computing environment in Ireland. Microsoft's lawyers had argued that the U.S. must first get permission from Ireland before it can order the company to hand over the data.
Microsoft plans to appeal, but if the decision holds it could have massive consequences for all cloud computing vendors. "Today's decision is a major blow not just for Microsoft, but for the entire U.S. cloud-computing industry," said Christopher Soghoian with the American Civil Liberties Union. "If these companies wish to regain the trust of their global customers, they must embrace security technologies such as cloud cryptography which can provide real privacy protections where the law does not."
In related news, Nomura Securities analyst Rick Sherlund predicts that Microsoft could be the biggest cloud computing company in the world by the end of this year.