[iheartmemcache]

You'd be surprised. I've contracted for the some 3 letter federal agencies and they're alright with certain material being hosted in the cloud. (1) We didn't use AWS but they were fine with standard RSA keys. MS/IBM realizes the discomfort management has though, and addresses it with "partial virtualization" solutions.

1: https://aws.amazon.com/federal/

[damian2000]

Part of it is being outside the US as well- there is a reluctance to keep sensitive data on servers owned by a foreign company. Attitudes are changing though ... MS and Amazon for example have a really good presence in Australia these days.