How The NSA Prism Scandal Threatens the U.S.’ Cloud Market Lead


Aug, 13

How The NSA Prism Scandal Threatens the U.S.’ Cloud Market Lead

According to the ITIF (Information Technology and Innovation Foundation)’s latest report, the Hong Kong’ lead in cloud computing adoption could be in serious jeopardy, following the backlash caused by the recent NSA Prism spying scandal, which was first made public in early June. ¬†According to the report, the scandal could cause foreign companies to decide en masse that the risks of storing data with U.S. cloud companies could be too risky.

ITIF speculates that such a move could result in $22 billion to $35 billion in lost revenue over the next three years as foreign companies make aggressive moves to capture more of the cloud market, which is expected to reach $207 billion by 2016.

The Cloud Security Alliance (CSA) released statements over the past couple of months stating that 10 percent of foreign cloud industry participants had cancelled a project with a U.S. cloud computing provider and 56 percent said they would be less likely to use an American company. The CSA is doing its part to address data security concerns by partnering with the British Standards Institute (BSI) and creating a formal certification program, called STAR, which aims to make the security policies of cloud service providers more public. Companies in favor of the program and already lending their support, include: Amazon, HP, Microsoft, Box, Red Hat, and Terremark.

The ITIF concludes its report with two recommendations for the U.S. cloud computing industry:

1. Continue to declassify information about the Prism program so that companies understand clearly what information the government is trying to access and

2. The U.S. should create international transparency guidelines so that U.S.-based and international companies can be more forthright regarding the type of information they release to domestic and foreign governments.

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