The Financial Times is reporting today that Microsoft has made the decision to enable storage of user data to be housed outside US borders. The decision, according to Financial Times reporters, James Fontanella-Khan in Brussels and Richard Waters in San Francisco, is due to Microsoft's strong aversion to the spying tactics and privacy intrusions of the NSA but also from a heavy disappointment in the Obama administration's recent announcement of proposed surveillance reforms. The steps outlined by the President simply didn't go far enough and sounded, to many, like the growing list of half-promises driven by politics and policy instead of public benefit.
The reluctance of the US government to provide any meaningful reforms was the last straw. While the Financial Times reports one unnamed individual who states that setting up data centers in every country would be cost prohibitive, this is logically the next step for Microsoft and one they have considered for a long time. Export laws for data exists in many countries, and has been a prohibiting factor for Microsoft's increased growth for Windows Azure. For Microsoft to provide a truly global service, they will need to invest in building locally managed datacenters.
Not only will globalized Microsoft datacenters eliminate the stigma of US managed personal data, but it will better secure the data against the NSA's illicit intrusion.