Timing is everything. Imagine landing in Berlin as the CEO of a cloud company that specialises in sharing data on the day that German Chancellor Angela Merkel was having a strop about the Americans bugging her mobile phone.
That was the scenario facing Box founder Aaron Levie recently. He explains:
“I was landing in Berlin when it was confirmed that Merkel and Obama were having digital fun. Later that day I was in a meeting the German parliament.
"It was a very awkward position. You can imagine.”
There’s been a fair amount of speculation of late that the activities of the US National Security Agency (NSA) will have a negative impact on the cloud computing market as non-US customers eye US providers security with suspicion, while in Europe leading politicians are using the PRISM scandal as leverage to pursue an agenda of toughening up data protection legislation.
Levie says that Box hasn’t seen any downturn to date:
“We get a lot of people asking if NSA is slowing down our business, but we’ve seen no negative impact. For those customers who are reluctant to move to the cloud it gives them another reason not to.
“There’s a huge amount of noise and conversation around the issue. We don’t sit at the centre of a lot of it. It’s more the consumer tools.
"It’s primarily about terrorism so it’s about things that would pass through a Skype or a Gmail.”
That said, it’s clear that Levie is deeply uncomfortable with the current situation. He calls the NSA’s antics:
“incredibly bad and inappropriate. It’s not just bad actions, but bad inactions in not creating any transparency into what’s happening.
"As a citizen in the US you don’t have any visibility into how they’re doing this. That’s a huge problem.
“I don’t think the current situation is tenable. There will have to be more transparency. The internet can’t blossom and evolve if fear remains. The only way to improve things is to change policies.
“There’s no way things can be maintained the way there are now. There has to be far more visibility.”
Box was recently named as a participant in the fourth supplier framework for the UK government’s G-Cloud programme and boasts the likes of Hounslow Council among its public sector customers.
G-Cloud and other national cloud initiatives have recently been talked down to by European Digital Agenda Commissioner Neelie Kroes and deemed less useful than her sought-after Europe-wide cloud programme controlled from Brussels would be.
I was curious to get Levie’s views on this as a number of US cloud CEOs have been expressing concern that proposed toughening up of data protection and data transfer legislation as part of this would effectively be a protectionist move by any other name.
“The biggest thing we worry about is the Balkanisation of the cloud. It’s not good to have regional or country clouds.
“The enterprises we work with don’t see their world as their country or region. We want to make sure the Internet stays open. Most of our customers need to communicate aroud the world.”
Box doesn’t yet have a data center with the European Union although it does operate nodes in region to reduce latency issues.
Levie reckons that an in-region data center will come, but admits that any requirement for in-country data centres would have a negative impact on the firm’s plans for European expansion.
“We will not have a data center per country - that would be untenable. So you would have to be selective.
“We might prioritise by IT spend or by levels of aptitude. We don’t want to play favourites.”
That said, it’s clear Box - in common with all US-headquartered cloud providers - is keeping a watchful and perhaps rather wary eye on developments in Brussels. That said, Levie sees others as better placed to exercise an influence on legislators.
“Lobby is too heavy a word, but we talk to anyone we can get our hands on in government. There are other companies who have way more of a financial impact at stake here.”
But he reaches a grim conclusion:
“There is not currently a tenable relationship between government and the technology industry.”
Disclosure: at time of writing Box is a partner of diginomica.