Defence contractor BAE Systems has ditched plans to adopt Microsoft Office365, the online version of the Microsoft Office suite.
The supplier could not guarantee the company's data would not leave Europe, in spite of operating a datacentre in Dublin.
"We were going to adopt Office365 and the lawyers said we could not do it," said Charles Newhouse, head of strategy and design at BAE Systems, speaking during a panel debate at the Business Cloud Summit 2011 in London.
His experience highlights the gulf between what the industry is trying to sell and the reality of big business. Regulated industries have strict policies on data and whether it can be exported. Even if companies ignore the powers of the US government under the Patriot Act, he said firms should not use cloud software in a regulated industry unless the sovereignty of data stored in the datacentres of the cloud providers is retained.
Listen to BAE's Newhouse talking in the podcast below or download here.