Earlier this month, the Information Technology & Innovation Foundation (ITIF) published a prediction by David Castro that the US cloud computing industry stands to lose up to $35-billion by 2016, thanks to the National Security Agency (NSA) PRISM project.
However, Forrester’s James Staten thinks the estimate is too low and could be as high as $180-billion – or a 25% hit to overall IT service provider revenues – in that same timeframe.
According to Staten, David Castro’s analysis really limited the impact to the actions of non-US corporations. The high-end figure assumes that US-based cloud computing providers would lose 20% of the potential revenues available from the foreign market.
Staten writes in a blog post: “We believe there are two additional impacts that would further be felt from this revelation: that US customers would also bypass US cloud providers for their international and overseas business – costing these cloud providers up to 20% of this business as well; and that non-US cloud providers will lose as much as 20% of their available overseas and domestic opportunities due to other governments taking similar actions.”
Today we learned that New Zealand police got data from NSA to raid Kim Dotcom’s house. This confirms the observation in the ITIF.org report that predicts the $35B hit to the US market. It says: “the reality is that most developed countries have mutual legal assistance treaties (MLATs) which allow them to access data from third parties whether or not the data is stored domestically.” This tells me that no data is secure nowhere no how.
I think the real threat to cloud providers across the globe is coming from the rise of private cloud providers like Cloudlocker (www.cloudlocker.it). I think it’s new products like this that pose the biggest threat to the old-line public cloud services, which have always suffered from fatal flaws in privacy and security. The private, personal clouds like the Cloudlocker eliminate these flaws, and that’s why I see them taking over this space.