NSA revelations could cost U.S. lead in cloud computing

Way to go, NSA: America’s lead in cloud computing is in jeopardy because of you.
Foreign competitors think they can grow market share in cloud computing because of concerns raised by the National Security Agency’s PRISM program and other government collection of electronic data from third parties. U.S. cloud computing companies could lose $22 billion to $35 billion in revenue over the next three years because of foreign customers’ concerns about the privacy of their data, according to Daniel Castro, a senior analyst at the Information Technology & Innovation Forum.
Foreign companies, particularly in Europe, already were making aggressive moves to win more of the cloud market, which is expected to be a $207 billion industry by 2016.
Now they’ve got a compelling argument to make, especially to Europeans who currently are using U.S. cloud companies.
“If European cloud customers cannot trust the United States government, then maybe they won’t trust U.S. cloud providers either,” Nellie Kroes, European commissioner for digital affairs, told The Guardian last month. “If I were an American cloud provider, I would be quite frustrated with my government right now.”
A survey conducted in June and July by the Cloud Security Alliance found 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.
To stem this loss of market share, the U.S. government “needs to proactively set the record straight about what information it does and does not have access to and how this level of access compares to other countries,” Castro writes.