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Patriot Act unintentionally driving SaaS clients from U.S. providers

11/30/2011

Businesses of all sizes and SaaS providers may be losing software contracts to foreign clients due to overseas hesitation involving the Patriot Act, Politico reports.

The Patriot Act was signed by George W. Bush just over a month after the attacks of September 11 as a way to allow law enforcement agencies across the United States gain increased access and monitoring of civilian communications and personal records.

According to Politico, overseas cloud computing agencies are suggesting to clients worldwide that signing up with a U.S.-based SaaS provider could automatically put a company's private information directly into the hands of the U.S. Government.

Ambassador Phillip Verveer, U.S. coordinator for the International Communications and Information Policy at the State Department and Phil Bond, former CEO of TechAmerica both told Politico that labeling U.S. SaaS providers with the Patriot Act is a misconception of the law, but more importantly an abundance of misguided clients may be judging their decisions on that limited, baseless information. Business owners may want to include a statement supporting that statement in proposed contracts.

"There is no shortage of people who misapprehend the law. If some of these misperceptions harden or real problems [are] not addressed, it will cause companies and governments to hesitate in doing business with U.S. cloud companies," Bond told the news source.