PRISM Projected To Cost U.S. Cloud Computing Industry $35B
U.S.-based cloud computing providers are projected to lose up to 20% of foreign market revenues or $35B over the next three years as a result of disclosures involving PRISM.
The Information Technology and Innovation Foundation (ITIF), a Washington, D.C.-based think tank published How Much Will PRISM Cost the U.S. Cloud Computing Industry? (free to download, no opt-in) on August 5th. The report highlights how the disclosures involving PRISM quickly are turning into a catalyst that rival countries’ cloud providers are using for their competitive advantage. PRISM has also fueled protectionism throughout European countries, with the report citing Germany’s response in detail. Jörg-Uwe Hahn, a German Justice Minister called for a boycott of U.S. companies in response to PRISM.
Key take-aways from the report are summarized here:
- Of the $13.5B in investments that cloud computing service providers made in 2011, $5.6B or 41.5%, came from companies outside North America.
- Global spending on cloud computing is expected to grow by as much as 100% between 2012 and 2016, while the global IT market will grow only 3% in the same period according to the report.
- The global enterprise public cloud computing market will be a $207B industry by 2016 according to sources cited in the report. The following graphic illustrates how non-U.S. markets are projected to grow through 2016.
- The ITIF completed two forecast scenarios as part of their methodology, the first assuming 10% reduction in foreign market share to European and Asian competitors, and no loss of current projected market share domestically. The second forecast scenario assumes 20% reduction in foreign market share, and constant market share growth domestically. The table below summarizes their findings.
Thank you Jeff Nolan and Manuel Pumarada for distributing the link to the report and for sharing your insights, much appreciated.