I think the HN echo chamber is hyping this up more than the rest of the real corporate world. Large companies who want to move to the cloud already know the risks/rewards of hosting their data via offsite 3rd party companies. They aren't worried about some threat that the NSA is sucking up all their data, they are concerned about people breaking into their instances and stealing their customer data.
With that, the push won't happen unless our customers start demanding our cloud-based solutions are free from government snooping. In my employer's industry, I doubt that would happen. However, we have gained compliance with many industry standards that we don't necessarily need to be complaint with just because our customers demanded it. It's not the big businesses that will be demanding a change, it's the customers of those businesses. If enough customers care, things will change. If the customers don't care, then nothing will be done.
§4b Abs.2 S.2 Bundesdatenschutzgesetz prohibits conveyance of personal data outside EU borders if the interest of persons concerned outweighs it (mostly it does).
This PRISM-surveillance substantiates those concerns.
But, frankly, I don't know how Amazon would respond if they received a national security letter asking for data hosted by Amazon in Ireland.
It'd be nice to see a country take a very strong stand on data privacy. They could be to hosting servers what Switzerland is to hosting money.
Servers from companies with a US-based headquarter belong to our new overlord, the US gov. and can be owned with a FISA-warrant (Foreign Intelligence Surveillance Act – FISA 1978/2008) garnished with a National Security Letter (NSL).
We know that procedures from Microsoft U.K. head: http://www.zdnet.com/blog/igeneration/microsoft-admits-patri...
And so I would really expect them to follow Irish, not US, law.
I remember reading an article that was posted here on HN about someone demanding Facebook to reveal the personal information they were storing of him, because IIRC, one of Facebook's servers is located in Europe, so they had to abide by EU's privacy laws. He eventually got a CD containing his personal info. It contained very limited data and not as much as I believe that they would have collected, but it shows that companies in Europe have to follow these laws.
This is going to be great for EU-based providers. They've been struggling for awhile to compete with Amazon, Rackspace, etc. I'd bet my money today on private, country-based cloud providers in EU. It will be nearly impossible for the US to dig itself out of this one.