The new safeguards come primarily in the form of contractual commitments and new software features. Microsoft hopes the moves will lessen potential concerns about using its cloud-based applications, which are hosted in Microsoft data centers where customers' data is also stored.

When selling Office 365 in Europe, Microsoft will now sign contractual "model clauses" developed by the European Union, which establish safeguards and procedures for protecting data when it is transferred outside the E.U.