A report issued yesterday by the Information Technology & Innovation Foundation (ITIF) provides a speculative estimate that the recent NSA / PRISM revelations could potentially cost the US Cloud market $21-$35 billion over the next 3 years. While the report acknowledges that “the data are still thin” and “this is a developing story and perceptions will likely evolve” – it does raise significant issues and second-guessing around the current wave of cloud adoption.
So the broader question is – if the NSA revelations cause a significant pull-back from the cloud, how much will this cost enterprises in terms of lost savings? It’s impossible to calculate, but arguably many times larger than the roughly $30 billion estimated by the ITIF. $100 billion? $300 billion? Sure, why not… multiple a WAG by a big number and you get a huge number…
But before we get carried away with doomsday estimates, let’s take a deep breath. The cloud isn’t going away. The most nimble companies have embraced the cloud, making them more competitive than companies stuck with expensive, legacy on-premise systems. The late adopters will find it increasingly hard to compete in a cloud-driven economy.
That’s not to say that concerns over security, snooping, hacking, and aggressive big data marketing aren’t valid. Security and privacy issues continue to be the biggest concern and inhibitors to broader cloud adoption.
Understandably, many governments outside the US are pushing for stronger laws and greater assurance that private data will not leave their borders. For example, the French government has made significant investments in building local cloud capabilities. While politically popular, these initiatives seem like a step backwards. Businesses are increasingly global, and data needs to flow across borders. Assuring that data never leaves a specific country seems like a recipe for being isolated and less competitive.