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The fall-out from Edward Snowden’s blockbuster revelations about the capabilities of American electronic intelligence agencies isn’t as bad as initially feared, according to a report.

While some experts forecast U.S. cloud providers could lose up to 10 per cent of their business because organizations are afraid to use American providers – and there’s little doubt that the consolidation of Canadian data centre providers is in part of that – so far that hasn’t come to pass, says the report in ComputerWorld U.S.

But there’s another result: Cloud services providers are toughening security and privacy policies.

The story notes that on Dec. 4 Microsoft has said it will improve encryption support on, Office 365, SkyDrive and Windows Azure. Google said on Aug. 15 it’s Cloud Storage has begun automatically encrypting all data before being written to disk.

Other providers are looking into implementing on-premise encryption and, for better control, keeping their own encryption keys.

As more revelations appear about the spy capabilities of governments expect more organizations to look into encryption.

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