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News of NSA snooping on data stored by major US cloud services will cost US business $22 billion through 2016, estimates the Information Technology & Innovation Foundation (ITIF). Forrester estimates the costs at significantly higher — $180 billion. Cisco also reports that some buyers in Europe are hesitant to buy US technology because of data privacy worries.
The fallout appears to already be happening. Brad Smith, vice president at Microsoft, said that “people won’t use technology they don’t trust. Governments have put this trust at risk, and governments need to help restore it.”
The analysis from the ITIF concentrated on estimated impacts from the reaction by non-US businesses. The Forrester analysis also factors in how US businesses may respond to the news. The Forrester analysis thought that as many as 20 percent of US businesses worried about government eavesdropping and also worried about how to handle their global data operations may opt against US-based cloud businesses. Forrester thought that private cloud and on-premise software will grow in 2014 five to six percent because of NSA spying fears (although despite these fears, cloud computing is still expected by Forrester to grow by 20 percent in 2014).
Luke Deneau, CEO of Burlington, Ontario-based Taridium Canada, told CIO Journal that “we’ve already moved a number of our customers out of Amazon Web Services [in the U.S.]. Probably over the next six months we will move the rest. About three years ago, most concerns about the Patriot Act were from IT guys, but now we’re getting it from CEOs and CFOs.”
Robert Miggins, senior vice president at Peer 1, said that “the overall growth rate of foreign companies still hosting in the US will continue to rise – simply because the market is growing so fast overall. However, our data shows that more and more foreign companies are specifically looking for non-US based alternatives in the wake of the NSA revelations. In fact, our survey revealed 25 percent of Canadian respondents and 11 percent of UK respondents said the NSA scandal has had a big impact on how they make decisions.” Two-thirds of companies surveyed said that they would choose the ability of which country to store their data in over superior performance of the service.