PRISM may cost American cloud providers $35 billion

Tech analysts say the revelation of the spying program will yield an "immediate and lasting impact" on US firms

Topics: BUSINESS2COMMUNITY, Prism, Surveillance, NSA, The Cloud, Internet, us market, , ,

PRISM may cost American cloud providers $35 billion (Credit: belekekin via Shutterstock)

Public cloud service providers based in the U.S. could lose up to $35 billion in contracts directly related to the NSA’s recently revealed PRISM spying program, as wary companies look for more secure methods and locations for storing their data.

Analysts at the Information Technology and Innovation Foundation say PRISM will have an “immediate and lasting impact” on the competitiveness of U.S. firms, if foreign businesses conclude the risks of storing their data with U.S.-based public cloud services outweigh the benefits.

The Washington D.C.-based nonpartisan think tank estimates U.S. public cloud service providers could lose somewhere between 10 to 20 percent of their foreign market share in the next three years—roughly $21.5- to $35 billion in losses.

“If European cloud customers cannot trust the United States government, then maybe they won’t trust U.S. cloud providers either,” European Commissioner for Digital Affairs Neelie Kroes told the Guardian. “If I am right, there are multibillion-euro consequences for American companies. If I were an American cloud provider, I would be quite frustrated with my government right now.”

Forrester analyst James Staten painted an even bleaker picture, predicting public cloud service providers could lose as much as $180 billion worldwide, a roughly 25 percent hit to overall IT service provider revenue.

Both the ITIF and Forrester didn’t think PRISM would kill the cloud, speculating that companies would likely seek out more secure online services instead.

Moreover, companies that provide alternate forms of cloud services – such as managed cloud, or on-premise private cloud – could gain business at the expense of public cloud services.

The Information Technology and Innovation Foundation calculated its 10- to 20 percent drop in overseas cloud revenue based on results of a recent survey by the Cloud Security Alliance—which estimated 10 percent of its non-U.S. members had recently canceled a cloud project due to PRISM.



Some 56 percent of the Alliance’s non-U.S. members said they’d be “less likely” to use an American cloud service provider due to PRISM.

PRISM is a digital surveillance program run by the National Security Agency, designed to track and store information flowing through U.S. server networks.

More Related Stories

Featured Slide Shows

  • Share on Twitter
  • Share on Facebook
  • 1 of 13
  • Close
  • Fullscreen
  • Thumbnails
    Clare Barboza/Bloomsbury

    Uncommon Apples

    Api Étoile

    Like little stars.

    Clare Barboza/Bloomsbury

    Uncommon Apples

    Calville Blanc

    World's best pie apple. Essential for Tarte Tatin. Has five prominent ribs.

    Clare Barboza/Bloomsbury

    Uncommon Apples

    Chenango Strawberry

    So pretty. So early. So ephemeral. Tastes like strawberry candy (slightly).

    Clare Barboza/Bloomsbury

    Uncommon Apples

    Chestnut Crab

    My personal fave. Ultra-crisp. Graham cracker flavor. Should be famous. Isn't.

    Clare Barboza/Bloomsbury

    Uncommon Apples

    D'Arcy Spice

    High flavored with notes of blood orange and allspice. Very rare.

    Clare Barboza/Bloomsbury

    Uncommon Apples

    Esopus Spitzenberg

    Jefferson's favorite. The best all-purpose American apple.

    Clare Barboza/Bloomsbury

    Uncommon Apples

    Granite Beauty

    New Hampshire's native son has a grizzled appearance and a strangely addictive curry flavor. Very, very rare.

    Clare Barboza/Bloomsbury

    Uncommon Apples

    Hewes Crab

    Makes the best hard cider in America. Soon to be famous.

    Clare Barboza/Bloomsbury

    Uncommon Apples

    Hidden Rose

    Freak seedling found in an Oregon field in the '60s has pink flesh and a fragrant strawberry snap. Makes a killer rose cider.

    Clare Barboza/Bloomsbury

    Uncommon Apples

    Knobbed Russet

    Freak city.

    Clare Barboza/Bloomsbury

    Uncommon Apples

    Newtown Pippin

    Ben Franklin's favorite. Queen Victoria's favorite. Only apple native to NYC.

    Clare Barboza/Bloomsbury

    Uncommon Apples

    Pitmaston Pineapple

    Really does taste like pineapple.

  • Recent Slide Shows

Comments

Loading Comments...