By Michael Hollander, Managing Partner, MOD Mission Critical
The Court of Justice of the European Union’s decision to invalidate the “Safe Harbor” system under which companies transfer customer data from Europe to the United States may have been met with a collective shrug by large technology and social media companies, including Amazon, Facebook and Google. However, the development undoubtedly will have serious repercussions for thousands of small and medium size businesses who do not have additional steps and legal safeguards in place to legally transfer data across the Atlantic.
Among the 4,400 companies that were certified by the U.S. Commerce Department to take advantage of Safe Harbor, as many as 60% are small or midsize businesses. While many large tech companies have deep pockets and formidable legal resources to expend on technical workarounds and statutory alternatives to the now defunct Safe Harbor compact. And some of the biggest players, such as Amazon, which last year built its first large European-based data center in Frankfurt, in part to assuage stringent German data privacy laws, will simply base their operations or store their data overseas. Not every small and medium-sized business is in a position to set up servers on the Continent or buy cloud storage there, which could double their operational costs.
Additional options include executing an alternative known as a model contract that involves updating agreements and privacy policies with vendors and customers consistent with legal language published by European officials, which can be time-consuming and expensive, or simply hoping that European authorities will only concern themselves with enforcement activity against larger companies, a potential permission or forgiveness scenario that will only leave small and medium size firms vulnerable.
The climate is particularly fraught in the DevOps ecosphere. As reported in the Wall Street Journal, Morgan Reed, director of the App Association, which is sponsored by Apple, AT&T, BlackBerry, Microsoft and Facebook, and represents 5,000 app developers, believes the European decision will move the Internet further toward becoming a two-tiered system in which small businesses face a higher barrier to entry than large ones. “Our small businesses are the collateral damage of this case,” Reed stated.
So where does this leave the smaller players? If small and medium-sized businesses and start-ups are the backbone of a digital economy that is the single most important driver of innovation, job creation and growth, how will these companies survive under the cloud — no pun intended — of European-U.S. data privacy compliance?
Fortunately, for small and medium-sized businesses, there is a solution that does not require a phalanx of international contract attorneys or prohibitively steep CAPEX or OPEX expenditures. Technological advances have enabled efficiencies across hardware design, allowing today’s companies the ability to do more with less. MOD Mission Critical’s Managed Colocation Platform allows small and mid-sized businesses to avoid the burdens of large colocation expenses while still maintaining the ability to scale quickly and cost-effectively as their business needs, and Euro-U.S. data privacy regulations, continue to evolve. MOD’s Managed Colocation Platform provides customers with the option to buy colocation space by the single rack unit within secure data centers in many major and emerging markets and its distributed international footprint allows their clients to store their content in the right place to avoid any Safe Harbor tax implications. While MOD’s Managed Colocation Platform is now available in data centers across Ashburn, Atlanta, Chicago, Dallas, Denver, Los Angeles, Mexico City, New York, Phoenix, San Jose, Toronto and Sydney, future deployments are scheduled in London, Miami, São Paulo and Seattle. Most significantly, concerning U.S. small and medium-sized businesses facing European data privacy compliance, MOD’s Managed Colocation Platform is available in Amsterdam, Barcelona, Milan and Rome.
In today’s market, traditional data center and colocation providers require at minimum a half-cabinet commitment at purchase. Moreover, these data center and colo providers typically fail to deliver on several critical colocation capabilities and features. These include providing diverse connectivity to major metro and emerging markets; secure, redundant data center facilities offering ample space, power density, capacity and availability for customer online applications; fast service turn-up; and maximum uptime ensured by one central Network Operations Center (NOC). MOD Mission Critical’s Managed Colocation Platform answers these requirements, while providing small and medium-sized business customers with flexible, scalable and cost-effective colocation options available by the single rack unit.
As MOD Mission Critical continues to expand its solutions throughout the European market, small and medium size companies will have a viable colocation option that will reduce operational expenses, enable them to remain within the boundaries of European data protection requirements, and stay in and grow their business.
