Two separate studies are forecasting that recent revelations about NSA surveillance on communications will lead to a decline in the use of cloud computing services. The Information Technology and Innovation Foundation (ITIF) believes the damage could total $35 billion as foreign firms decline to do business with U.S.-based cloud providers. Forrester takes a much more pessimistic view, pegging the lost revenue at $80 billion for cloud vendors and another $100 billion for managed services providers.
Already, two secure email services have shut down in the wake of the alleged snooping by the NSA, and France and Germany are sounding the alarm about using U.S. services. Forrester’s James Staten says, “Where they have cared, companies have been avoiding using U.S. service providers. There may be some, who have said, how much risk is there? And those are the ones that will now be reconsidering U.S. providers.”