Possible Impact Of NSA Leaks On U.S. Cloud Computing Industry

cloudsecurityThe ongoing debate on privacy at the Foreign Intelligence Surveillance (FISA) has made the National Security Agency’s practice of data collection and surveillance programs public. There has been a lot of hearsay as to how this affects the access of online data both at domestic and international level.

A lot of focus is on the fact that if the FISA court issues a national security letter, then the U.S. government can access any data on U.S. based internet companies. The main concern is about the data of foreign companies stored on the servers in U.S.

The business of cloud computing industry in U.S. is also going to come under attention. Because of fear of surveillance programs, non-U.S. companies may shy away from using U.S. based cloud companies.

This argument comes in light of a recent report published by the Information Technology and Innovation Foundation that estimated that these NSA revelations may cause the multi-million cloud industry in U.S. to lose $22 to $35 billion in the coming three years.

However, the figures can also be treated as mere estimates since there are various thought leaders in the cloud computing marketing that can circumvent such issues. For instance, companies such as DevFactory have shown trend setting models that led to the boom of cloud computing in U.S. They were among the first one to use cloud computing to improve productivity of financial companies and employ benefits like economies of scale. If the U.S. cloud computing industry can see more of such companies, it can also sustain the entire NSA episode.

Another thing is that the cloud computing companies should not blindly buy ‘the hand of forecasters’. They can learn from Amazon’s example. Amazon Web Services cut down cloud prices by 80% because they feared NSA’s revelations would turn customers away. However, in reality, the losses were fairly marginal.

The cloud computing industry in U.S. has been on the rise since 2001 and by saying that this event would lead to an industry shift, is an exaggeration. The integration of the cloud computing services is non-avoidable and those users who have been enjoying quality services from U.S. based companies would think twice before going to an alternate.

The Patriot Act and NSA’s activities like Prism have been the focus of discussion on the web. In reality, what is happening is that non U.S. cloud services are using this incident as a façade to downgrade the U.S. cloud computing companies.

The Prism program of NSA involves the U.S. government accessing data on U.S servers without the knowledge of the client. This led to an outcry in Europe that having their corporate data under the stewardship of U.S companies is not a security loophole for the European people.

The German Interior Minister went two steps ahead of everybody and suggested that people should stop using American services such as Google and Facebook. It shows opportunism more than a real concern.

Within this situation, there is also an opportunity for U.S. cloud computing firms. Companies that provide clients server security away from the U.S. data collection program may see a major boost in clientele. This factor would definitely be a game changer for the upcoming cloud startups.

Another impact that this entire incident may lead to people opting from public companies to private data storage companies.

In light of all the events, the future of cloud computing in U.S. is far from bleak. It would be realistic to see it as a minor speed bump on the road to progress.

License: Creative Commons image source

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