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PRISM Projected To Cost U.S. Cloud Computing Industry $35B

prismU.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.

figure-1-ww-cloud-market

  • 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.

estimated-cost-of-PRISM

Thank you Jeff Nolan and Manuel Pumarada for distributing the link to the report and for sharing your insights, much appreciated.

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One Comment Post a comment
  1. Reblogged this on Tech Craze.

    August 10, 2013

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