US Firms Worry Edward Snowden Is Wrecking Their Business, but the Patriot Act Was Already Doing That
Reports show the U.S. cloud industry could suffer due to government surveillance.
Shortly after a meeting of an EU-sponsored program to push European cloud-computing capabilities in Estonia last month, a high-ranking EC official noted that the biggest losers from Edward Snowden’s revelation about US surveillance would be US businesses:
If European cloud customers cannot trust the United States government or their assurances, then maybe they won’t trust US cloud providers either. That is my guess. And if I am right then there are multi-billion euro consequences for American companies.
If I were an American cloud provider, I would be quite frustrated with my government right now.
American firms certainly are frustrated—so frustrated they have produced two reports in a span of two weeks, both arguing that the US government needs to fix this problem. The first (pdf) is from the Cloud Security Alliance (CSA), an industry body. It released a survey of 500 of its members late last month, and found that more than half of non-US respondents were “less likely to use US-based cloud providers” and a tenth had “cancelled a project to use US-based cloud providers.” A third of American companies said they felt “the Snowden Incident” made it more difficult for their companies to conduct business outside the US.
The second (pdf) also comes from an industry body, Information Technology and Innovation Foundation (ITIF). It used CSA’s survey, which led it to “reasonably conclude that given current conditions US cloud service providers stand to lose somewhere between 10% and 20% of the foreign market in the next few years.” Combining that with various forecasts for the size of the cloud-computing industry in the next three years, ITIF estimated that the US cloud-computing industry will suffer between $21.5 billion and $35 billion in losses by 2016.