NSA Revelations Could Prove Costly to U.S. Cloud Industry

The U.S. dominance in the cloud computing industry could soon be challenged by international competitors, as the revelations about the extent to which U.S. government agencies have obtained data from U.S. companies have damaged the trust in American cloud providers. Gartner recently valued the global cloud market at $131 billion with American companies taking the lion's share of that total. That was prior to the NSA leaks however. The Information Technology & Innovation Foundation (ITIF) put out a research paper this week, quantifying the potential damages inflicted on the U.S. cloud industry between $22 and $35 billion in the next three years alone.

The ITIF estimates are based on the assumption that U.S. cloud providers could lose between 10 and 20 percent of their international market share, while their position in the U.S. remains untouched. Considering the public reaction to the NSA leaks outside of America and especially in Europe, these assumptions don't seem too far fetched. To avoid a lasting negative impact on the competitiveness of the U.S. cloud computing industry, the ITIF concludes: "the U.S. Government needs to proactively set the record straight, declassify information about the PRISM program and allow companies to reveal more details about what information has been requested of them."