NSA's spying could lose U.S. computing industry $35bn in three years

Report from tech think tank suggests foreign cloud users will now avoid U.S. companies

Published August 12, 2013 5:42PM (EDT)


A new report from D.C.-based technology think tank the Information Technology and Innovation Foundation spells a grim outlook for the U.S. computing industry in light of the recent NSA surveillance revelations.

With the knowledge that the U.S. government is hoarding information on almost every online interaction within and going out of the U.S., foreign cloud users are likely to avoid using American computing companies to store information, the report predicts.

"The U.S. cloud computing industry stands to lose $22 to $35 billion over the next three years as a result of the recent revelations," notes the report, authored by ITIF senior analyst Daniel Castro.

The report notes:

At stake is a significant amount of revenue... The global enterprise public cloud computing market will be a $207 billion industry by 2016. Europeans in particular are trying to edge out their American competitors, and they are enlisting their governments to help. Jean-Francois Audenard, the cloud security advisor to France Telecom, said with no small amount of nationalistic hyperbole, “It’s extremely important to have the governments of Europe take care of this issue because if all the data of enterprises were going to be under the control of the U.S., it’s not really good for the future
of the European people.”

...The NSA’s electronic surveillance may fundamentally alter the market
dynamics. Neelie Kroes, European Commissioner for Digital Affairs, stated the problem quite succinctly, “If European cloud customers cannot trust the United States government, then maybe they won't trust U.S. cloud providers either. 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.”

By Natasha Lennard

Natasha Lennard is an assistant news editor at Salon, covering non-electoral politics, general news and rabble-rousing. Follow her on Twitter @natashalennard, email nlennard@salon.com.

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