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Snowden revelations may cost U.S. cloud providers billions, says study

Patrick Thibodeau | Aug. 12, 2013
Debate begins over whether the EU can really damage U.S. cloud leadership.

One survey that points to economic damage, also cited by the ITIF, was last month's Cloud Security Alliance report, which found that 10% of 207 officials at non-U.S. companies canceled contracts with U.S. service providers since the revelations of the spy program.

"I don't think PRISM does U.S. providers any favors, that's for sure," said Gartner lead cloud analyst Ed Anderson. He added that Gartner has not seen the Patriot Act, which has been cited for years by the Europeans as a privacy threat, as having any impact on U.S. cloud providers.

Similarly, Anderson said his firm has not seen any revenue impact on cloud providers since the PRISM disclosures.

"I think the reality is [the controversy over PRISM] is likely to die down over time, and we expect adoption to probably continue on the path that it has been on anyway," he said.

One reason why U.S. providers may not suffer is because "the alternatives aren't great, if you are European company looking for a cloud service," Anderson said.

Similar to Weinstein's point about European data surveillance, Anderson said European nations also can spy on private data.

"If you think that PRISM is the only program in the world where a government is inspecting private data, than you are pretty nave," said Anderson. Nonetheless, Anderson doesn't discount the risks if "there continue to be missteps on the part of the U.S. government" on data privacy issues, and said it could have a long-term impact on the perception it creates globally about what it means to work with a U.S. provider.

 

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