Google – AFP, Rob Lever (AFP), 27 August 2013
 |
A 'Secure
Cloud Storage' drive is seen at the CeBIT, world's biggest IT fair,
in Hanover,
on March 3, 2011 (AFP/File, Johannes Eisele)
|
WASHINGTON,
DC — Revelations about vast US data collection programs are starting to hit
American tech companies, which are ramping up pressure for increased
transparency to try to mitigate the damage.
An industry
group, the Cloud Security Alliance said last month that 10 percent of its
non-US members have cancelled a contract with a US-based cloud provider, and 56
percent said they were less likely to use an American company.
A separate
report this month by the Information Technology & Innovation Foundation, or
ITIF, a Washington think tank, said US cloud providers stand to lose $22
billion to $35 billion over the next three years due to revelations about the
so-called PRISM program.
Daniel
Castro, author of the report, says a loss of trust in US tech firms could lead
to "protectionist" measures that hurt the fast-growing cloud sector.
"The
risk is that a country like Germany will say you have to be a German company to
provide data services in Germany," Castro told AFP.
"I
don't think that helps anyone. We do benefit from free trade and the robust
competitiveness in the tech industry."
The report
notes that the United States dominates the cloud computing market both
domestically and abroad, and that US firms could lose between 10 and 20 percent
of the foreign market in the next few years.
Tech
companies, especially firms in cloud computing, have been in a frenzy since
details leaked in June about surveillance efforts led by the secretive National
Security Agency, including PRISM, believed to scoop up massive amounts of data
as part of efforts to thwart terrorism.
Castro said
in his report "the disclosures of the NSA's electronic surveillance may
fundamentally alter the market dynamics."
The news
"will likely have an immediate and lasting impact on the competitiveness
of the US cloud computing industry if foreign customers decide the risks of
storing data with a US company outweigh the benefits," he wrote.
Much
concern in being expressed in Europe. Estonian President Toomas Hendrik last
month urged the EU to develop its own cloud industry, noting that 95 percent of
the services come from US firms.
"Recent
months have proven once again that it's very important for Europe to have its
own data clouds that operate strictly under European legislation," he
said.
Some
analysts say losses could be even greater than the ITIF predicts, if the
fallout affects consumer-based services like email and search.
And
Forrester Research analyst James Staten argued that, in addition to the loss of
foreign customers, US customers may look overseas for cloud services, and the
rest of the tech sector could also see an impact.
"Add
it all up and you have a net loss for the service provider space of about $180
billion by 2016, which would be roughly a 25 percent decline in the overall IT
services market," Staten said.
The tech
sector has been active on several fronts, filing court cases and making public
pleas to the US administration for more transparency, in the hope that fuller
disclosure will ease fears about how data is shared.
Six large
high-tech lobby groups sent a letter to President Barack Obama this month
asking for such steps, saying more transparency "can assist in
reestablishing trust, both domestically and globally."
Ross Schulman
of Computer & Communications Industry Association, one of the tech
associations, said "the lack of information is compounding the trust
problem."
Schulman
said it's not clear if the volume of data collected by the government is more
or less than people believe.
"If
it's less, that could help trust," he said. "If it's more, people
could have an informed discussion of surveillance practices."
But in the
current situation, he said, "it's difficult to go to customers and say the
cloud is the best place for your data."
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