There's lots to chew on in this strongly-worded editorial on the website NextGov.com: Op-ed: Encryption, not restriction, is the key to safe cloud computing.
The specter of non-U.S. citizens having physical control over and access to U.S. data understandably gives the government pause. The same is true of almost every other country in the world.
As a result, many federal, state and local governments and agencies are starting to require that their data remain within geographic control.
Taking this school of thought further, the U.S. government is engaged in an opaque rule-making process that is poised to create a requirement that federal data be stored at a U.S. location and handled only by U.S. citizens.
As hinted at by the title of their editorial, the authors suggest that this is the wrong direction to proceed.
There is an easier solution -- encryption at rest. A system of encryption where the customer controls the encryption keys solves many of the security problems that have bedeviled public clouds for the government. It would eliminate the need to insist on U.S.-only location for government cloud data centers and support personnel. All that is required is to implement an architecture that enables customers to apply encryption to data at rest before that data is transitioned to the cloud and for their customers to be the sole holders of their own encryption keys.
But as the article notes, the main objection to this proposal is not technological, but financial:
Why do some in the industry resist this solution?
In part it is because encryption with customer controlled keys is inconsistent with portions of their business model. This architecture limits a cloud provider’s ability to data mine or otherwise exploit the users’ data. If a provider does not have access to the keys, they lose access to the data for their own use. While a cloud provider may agree to keep the data confidential (i.e., they won’t show it to anyone else) that promise does not prevent their own use of the data to improve search results or deliver ads. Of course, this kind of access to the data has huge value to some cloud providers and they believe that data access in exchange for providing below-cost cloud services is a fair trade.