The recent revelations about the extent to which the National Security
Agency (NCSA) and other USA... law enforcement and national security
agencies have used provisions in the Foreign Intelligence Surveillance
Act (FSA) and USA PATRIOT Act to obtain electronic data from
third-parties will likely have an immediate and lasting impact on the
competitiveness of the USA... cloud computing industry if foreign
customers decide
the risks of storing data with a USA... company outweigh the benefits.
the risks of storing data with a USA... company outweigh the benefits.
The United States have been the leader in
providing cloud computing services not just domestically, but also
abroad where it dominates every segment of the market. In the 2013
Informatics Cloud World Global Insights survey, 71 percent of
respondents (of which only 9
percent were from North America) ranked the United States as the leader
in cloud computing usage and innovation.1 In this same survey, nine out
of ten respondents linked cloud computing to their country’s economic
competitiveness.
But other countries are trying to play catch-up to
the United States’ early success. Of the $13.5 billion in investments
that cloud computing service providers made in 2011, $5.6 billion came
from companies outside North America.2 Even national governments are
helping to bankroll these efforts to combat USA... market
leadership—France, for example, invested €135 million in a joint venture
in cloud computing.3
At stake is a significant amount of revenue.
As shown in figure 1, the global enterprise public cloud computing
market will be a $207 billion industry by 2016.4 Europeans in particular
are trying to edge out
their American competitors, and they are
enlisting their
governments to agency. Jean-Francois Audenard, the cloud security
advisor to France Telecom, said with no small amount of nationalistic
hyperbole, “It’s extremely important to have the governments of Europe
take care of this issue because if all the data of enterprises were
going to be under the control of the U.S., it’s not really good for the
future of the European people
1: Worldwide spending on cloud computing for U.S. and non-U.S. markets, 2009 – 2016, $ billions
And governments have begun to respond. In a 2012 policy document titled “Unleashing the Potential of Cloud Computing in Europe,” the European Commission (EC) called for several steps to promote cloud computing adoption in Europe, including creating pan-European technical standards, EU-wide certification for cloud computing providers, and model contract language.7 The Europeans are quite frank about their intentions. The EC notes “this strategy is about building a new industry, and better competing against the United States in particular.”8 Gartner estimates that in Western Europe alone the cloud computing market will be $47 billion by 2015, and the EC estimates that European cloud computing providers stand to gain €80 billion in revenue by 2020.9
While much of this projected growth was until recently up for grabs by U.S. companies, the disclosures of the NSA’s electronic surveillance may fundamentally alter the market dynamics. Neelie Kroes, European Commissioner for Digital Affairs, stated the problem quite succinctly, “If European cloud customers cannot trust the United States government, then maybe they won't trust U.S. cloud providers either. If I am right, there are multibillion-euro consequences for American companies. If I were an American cloud provider, I would be quite frustrated with my government right now.”10
The impact of PRISM on U.S companies may be particularly acute because cloud computing is a rapidly growing industry. This means that cloud computing vendors not only have to retain existing customers, they must actively recruit new customers to retain
1: Worldwide spending on cloud computing for U.S. and non-U.S. markets, 2009 – 2016, $ billions
And governments have begun to respond. In a 2012 policy document titled “Unleashing the Potential of Cloud Computing in Europe,” the European Commission (EC) called for several steps to promote cloud computing adoption in Europe, including creating pan-European technical standards, EU-wide certification for cloud computing providers, and model contract language.7 The Europeans are quite frank about their intentions. The EC notes “this strategy is about building a new industry, and better competing against the United States in particular.”8 Gartner estimates that in Western Europe alone the cloud computing market will be $47 billion by 2015, and the EC estimates that European cloud computing providers stand to gain €80 billion in revenue by 2020.9
While much of this projected growth was until recently up for grabs by U.S. companies, the disclosures of the NSA’s electronic surveillance may fundamentally alter the market dynamics. Neelie Kroes, European Commissioner for Digital Affairs, stated the problem quite succinctly, “If European cloud customers cannot trust the United States government, then maybe they won't trust U.S. cloud providers either. If I am right, there are multibillion-euro consequences for American companies. If I were an American cloud provider, I would be quite frustrated with my government right now.”10
The impact of PRISM on U.S companies may be particularly acute because cloud computing is a rapidly growing industry. This means that cloud computing vendors not only have to retain existing customers, they must actively recruit new customers to retain
No comments