US cloud providers could lose up to $180 billion in business over the next three years due to concerns around the scope of NSA’s PRISM program, Forrester Research analyst James Staten said in a blog post on Wednesday.
This number is $145 billion more than an earlier estimate from the Information Technology and Innovation Foundation which predicted $35 billion of cloud business could be driven away from the US by 2016.
Staten said that US companies should not only be concerned that businesses overseas will be less likely to use US-based cloud services, but also that businesses in their own country will bypass domestic cloud services in favor of international options, which they may perceive to be more secure.
It’s not just US cloud companies that should be concerned either, Staten says. Other countries could model after the US and introduce PRISM-like programs of their own; in fact, he said, it is “naïve and dangerous to think that the NSA’s actions are unique.” This could mean that non-US cloud providers could lose up to 20 percent of their own available overseas and domestic opportunities.
“Prior to today’s media-hyped paranoia about government surveillance, corporate IT spending has been trending toward outsourcing for many years. Few corporations have no data in the cloud let alone no data with a hosting company, colocation provider or outsourcing firm,” Staten said. “Think your firm is the exception? Do a quick travel and expense audit against Evernote, DropBox or similar services. Swear on a Bible that none of your employees have company data sucked up into iCloud. Sign a legal tender that none of your partners are storing your data or data about your company in the cloud or with a service provider. Oh well.”
Staten recommends cloud users bring their own encryption; “If you hold the keys the governments can’t get to your data by going through your service provider.” Megacloud, for example, offers encryption as its key premise, and Staten said other solutions like Perspecsys and SafeNet ProtectIV are options as well.
While the projections brought forth by Forrester and the ITIF are worst-case scenarios, Netcraft doesn’t think that US hosting providers have too much to worry about yet. Read more on DataCenterKnowledge: Netcraft: NSA Surveillance Disclosures Not Slowing US Hosting Growth