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 11
  • Close
  • Fullscreen
  • Thumbnails
    Burger King Japan

    2014's fast food atrocities

    Burger King's black cheeseburger: Made with squid ink and bamboo charcoal, arguably a symbol of meat's destructive effect on the planet. Only available in Japan.

    Elite Daily/Twitter

    2014's fast food atrocities

    McDonald's Black Burger: Because the laws of competition say that once Burger King introduces a black cheeseburger, it's only a matter of time before McDonald's follows suit. You still don't have to eat it.


    2014's fast food atrocities

    Domino's Specialty Chicken: It's like regular pizza, except instead of a crust, there's fried chicken. The company's marketing officer calls it "one of the most creative, innovative menu items we have ever had” -- brain power put to good use.


    2014's fast food atrocities

    Arby's Meat Mountain: The viral off-menu product containing eight different types of meat that, on second read, was probably engineered by Arby's all along. Horrific, regardless.


    2014's fast food atrocities

    KFC'S ZINGER DOUBLE DOWN KING: A sandwich made by adding a burger patty to the infamous chicken-instead-of-buns creation can only be described using all caps. NO BUN ALL MEAT. Only available in South Korea.

    Taco Bell

    2014's fast food atrocities

    Taco Bell's Waffle Taco: It took two years for Taco Bell to develop this waffle folded in the shape of a taco, the stand-out star of its new breakfast menu.

    Michele Parente/Twitter

    2014's fast food atrocities

    Krispy Kreme Triple Cheeseburger: Only attendees at the San Diego County Fair were given the opportunity to taste the official version of this donut-hamburger-heart attack combo. The rest of America has reasonable odds of not dropping dead tomorrow.

    Taco Bell

    2014's fast food atrocities

    Taco Bell's Quesarito: A burrito wrapped in a quesadilla inside an enigma. Quarantined to one store in Oklahoma City.

    2014's fast food atrocities

    Boston Pizza's Pizza Cake: The people's choice winner of a Canadian pizza chain's contest whose real aim, we'd imagine, is to prove that there's no such thing as "too far." Currently in development.


    2014's fast food atrocities

    7-Eleven's Doritos Loaded: "For something decadent and artificial by design," wrote one impassioned reviewer, "it only tasted of the latter."

  • Recent Slide Shows


Loading Comments...