10 ms·

How Much Will Prism Cost the U.S. Cloud Computing Industry?

93 points by andyl 13y ago

btipling 13y ago
Fix title. "lost" is not the equivalent of "stands to lose"
- rhizome 13y ago
  Plus the unreality of calculating this a month and a half after the leak.
  - btipling 13y ago
    The OP link is mostly blog spam that references http://www.itif.org/publications/how-much-will-prism-cost-us-cloud-computing-industry http://www.itif.org/publications/how-much-will-prism-cost-us... which says $22 to $35 BN qualified with an "if" statement. > The United States has been the leader in providing cloud computing services not just domestically, but also abroad where it dominates every segment of the market. Recent revelations about the extent to which the NSA obtains electronic data from third-parties will likely have an immediate and lasting impact on the competitiveness of the U.S. cloud computing industry if foreign customers decide the risks of storing data with a U.S. company outweigh the benefits. Unless the White House or Congress acts soon, the U.S. cloud computing industry stands to lose $22 to $35 billion over the next three years.
rayiner 13y ago
Link to the actual estimate: http://www2.itif.org/2013-cloud-computing-costs.pdf http://www2.itif.org/2013-cloud-computing-costs.pdf. The estimate is based on surveys conducted in June and July where 10% of respondents stated that they had canceled a U.S. cloud computing project as a result of the NSA programs. The paper than extrapolates from that and then projects the costs to U.S. business over the next three years if the U.S. loses 10%-20% of non-U.S. cloud spending over that period. The weakness of the conclusion is that: 1) The survey is based on percentage of respondents, but that information is used to make a conclusion about dollar value of spending; 2) It assumes that the survey taken in the direct aftermath of the revaluations is representative of attitudes over the next three years.
- pigscantfly 13y ago
  Analysis this questionable transcends the 'take with a grain of salt' threshold, in my opinion. They're not publishing this to inform anyone, just grab eyeballs. Hooray new media...
kosei 13y ago
Depressing that such hugely speculative extrapolation is getting upvoted the way that it is. This "article" is typical traffic fodder taking a flawed report at face value and reporting it as fact.
DanBC 13y ago
Avoiding the US because of government surveillance is odd, because we know that if you're outside the US you lose all supposed protections you have inside the US, and we know that other agencies collect everything. GCHQ collect everything; caching it for 4 days and metadata for 30 days. These times are probably going to increase. There are good reasons to avoid hosting anything in the US. (eg Weird lack of sensible privacy laws).
- SG- 13y ago
  What protections do you have inside the US as a non-US citizen? While I'm sure other agencies collect things or let the US collect things for them, the fact is that most countries don't have the budget the NSA does to even do something like PRISM.
  - adestefan 13y ago
    If you're in sovereign US territory, then you're provided the protections of the Constitution even if you're not a citizen. This is why there's a big stink about closing Guantanamo and moving all the inmates to Leavenworth.
    - SG- 13y ago
      It doesn't seem like the Constitution matters as much as it used to. Regardless, that shouldn't be enough reason to write off other countries for hosting your cloud data.
- joe_the_user 13y ago
  "if you're outside the US you lose all supposed protections you have inside the US" Your statement seems rife with confusion. The situation is that if you're not an American citizen you lose ostensible legal protections whereever you are. The NSA is using physical location as proxy for citizenship sometimes it seems. But no one else is talking about changing physical location, just changing web hosting and related stuff (plus locating to the US to not get snooped on doesn't a logical approach). Anyway, as to what other Internet filtering there is "out there", that is a somewhat different issue. Some large non-US companies would probably rather only be snooped by their government rather than their government and the US, since hypothetically, their government would be less inclined to do industrial espionage against them.
elchief 13y ago
I wonder if the Feds subsidized Microsoft's purchase of Skype to make it easier to listen in on Skype calls? </conspiracy-theory>
- nullc 13y ago
  Pfft. If they were doing things like that then they would have blocked or best-offered the purchase of ICQ by the mail.ru folks.
  - plorkyeran 13y ago
    ICQ was already utterly irrelevant by 2010.
    - nullc 13y ago
      facepalm
zmmmmm 13y ago
I was in a meeting the other week where moving a bunch of computing services to the cloud came up. The local vendor was making great hay with the ability to assert that data stored in their cloud infrastructure would not leave our (non-US) state and their company was outside of any foreign legal jurisdiction (ie: not Amazon). But I think the impact is actually far worse, because nobody actually cared whether it was US based. PRISM has not destroyed US business, it is destroying the cloud computing business everywhere, because nobody trusts that a) their own government is not in cahoots with the NSA anyway, or b) their own government is not even worse than the NSA. Cloud computing has been one of the great revolutions of the last 10 years, and has seriously lowered the barrier to entry for large scale computing, dramatically boosting innovation. I think PRISM may well set us back 5 - 10 years in terms of migrating services to the cloud and the cost of that is pretty much immeasurable.
- rdl 13y ago
  We're only a few years away from having technology which could make "the cloud" provably trustworthy. Plus, just because it's in your own datacenter today, doesn't actually make your infrastructure trustworthy, either -- incompetence tends to be a greater risk, including staff malfeasance, outside of professional IT organizations (cloud providers). There is technology (hardware and software) which can make the cloud more secure on every dimension than what people have today (and which can be applied to on-premises as well). There just hasn't been enough demand for it in the past.
- flatline 13y ago
  In some spheres the market is already swinging back towards the "private cloud", where the technologies hammered out from large scale cloud computing are available as commodity software and hardware solutions. And so the cycle continues...if innovation slows in one area, it will pick up in another. Perhaps it will be a net boon for the cloud in the long run; some other company opaquely housing your data has always been a problem, somewhat ironically, for government agencies, for instance, and certainly is for many private companies and individuals.
  - deleted 13y ago
RRRA 13y ago
So the Internet will be more distributed because of this? ;)
- AsymetricCom 13y ago
  Tell me more about this "distributed" Internet. Sounds like a great way to make it robust and inexpensive, boosting the entire economy.
coldcode 13y ago
Everything I hope. Otherwise politicians won't change a thing.
znmeb 13y ago
This is junk - not even junk science, just pure bullshit.
- AsymetricCom 13y ago
  say that to German citizens
  - zbyszek 13y ago
    Das ist aber Mist. Nicht bloß wissenschaflicher Mist, nur der reine Scheiß.
    - AsymetricCom 13y ago
      I know for a fact that not all Germans feel that way.
greendata 13y ago
Oh, it's going to get much worse than this. You know how hard it is to be get a bank account and/or financial services if you are US citizen living abroad? Other countries simply do not want US citizen's business in banking and financial services. It's too much trouble. I think non-US based cloud companies will start to require proof that you are not a US citizen if you want to use their service. It's simply too much trouble complying with their requirements and you're risking too much. Look what happened to Freedom Hosting recently. All those sites hacked by US Gov, partially b/c the US citizen was involved (duel Irish/US).
bowlofpetunias 13y ago
I think it will take some time for the damage to become clear. We as a European company are using services like Google Apps, AWS, Dropbox, Skype and such. We're not in any big hurry to incur the costs of migrating away from those, but it's definitely going to happen in the next 5 years. It partly depends on what alternatives pop up, and we're only at the start of that process. Also, the policies that preclude ever using such U.S. services again in the future are already being put in place in many organizations. The actual impact will be slow, but it feels very much irreversible. I introduced the use of AWS at our company. Today, I don't think I could sell that.
mrweasel 13y ago
Some companies might move away from cloud solution and buy VPS or physical servers in co-location facilities. However, companies like RackSpace, Amazon and Heroku doesn't really have that much to fear, they simply don't have European competitors. I might be wrong, but I struggle to even find a good European replacement for Gmail ( even though I'm willing to pay ). I don't really trust UK companies either, so the "best" solution I found so far are companies like Hetzner. It's not really the same as Rackspace, Amazon or Heroku, maybe there's a marked for a OpenStack provider in Europe?

93 points by andyl 13y ago

btipling 13y ago

Fix title. "lost" is not the equivalent of "stands to lose"

rhizome 13y ago
Plus the unreality of calculating this a month and a half after the leak.
- btipling 13y ago
  The OP link is mostly blog spam that references http://www.itif.org/publications/how-much-will-prism-cost-us-cloud-computing-industry http://www.itif.org/publications/how-much-will-prism-cost-us... which says $22 to $35 BN qualified with an "if" statement. > The United States has been the leader in providing cloud computing services not just domestically, but also abroad where it dominates every segment of the market. Recent revelations about the extent to which the NSA obtains electronic data from third-parties will likely have an immediate and lasting impact on the competitiveness of the U.S. cloud computing industry if foreign customers decide the risks of storing data with a U.S. company outweigh the benefits. Unless the White House or Congress acts soon, the U.S. cloud computing industry stands to lose $22 to $35 billion over the next three years.

rayiner 13y ago

Link to the actual estimate: http://www2.itif.org/2013-cloud-computing-costs.pdf http://www2.itif.org/2013-cloud-computing-costs.pdf. The estimate is based on surveys conducted in June and July where 10% of respondents stated that they had canceled a U.S. cloud computing project as a result of the NSA programs. The paper than extrapolates from that and then projects the costs to U.S. business over the next three years if the U.S. loses 10%-20% of non-U.S. cloud spending over that period. The weakness of the conclusion is that: 1) The survey is based on percentage of respondents, but that information is used to make a conclusion about dollar value of spending; 2) It assumes that the survey taken in the direct aftermath of the revaluations is representative of attitudes over the next three years.

pigscantfly 13y ago
Analysis this questionable transcends the 'take with a grain of salt' threshold, in my opinion. They're not publishing this to inform anyone, just grab eyeballs. Hooray new media...

kosei 13y ago

Depressing that such hugely speculative extrapolation is getting upvoted the way that it is. This "article" is typical traffic fodder taking a flawed report at face value and reporting it as fact.

DanBC 13y ago

Avoiding the US because of government surveillance is odd, because we know that if you're outside the US you lose all supposed protections you have inside the US, and we know that other agencies collect everything. GCHQ collect everything; caching it for 4 days and metadata for 30 days. These times are probably going to increase. There are good reasons to avoid hosting anything in the US. (eg Weird lack of sensible privacy laws).

SG- 13y ago
What protections do you have inside the US as a non-US citizen? While I'm sure other agencies collect things or let the US collect things for them, the fact is that most countries don't have the budget the NSA does to even do something like PRISM.
- adestefan 13y ago
  If you're in sovereign US territory, then you're provided the protections of the Constitution even if you're not a citizen. This is why there's a big stink about closing Guantanamo and moving all the inmates to Leavenworth.
  - SG- 13y ago
    It doesn't seem like the Constitution matters as much as it used to. Regardless, that shouldn't be enough reason to write off other countries for hosting your cloud data.
joe_the_user 13y ago
"if you're outside the US you lose all supposed protections you have inside the US" Your statement seems rife with confusion. The situation is that if you're not an American citizen you lose ostensible legal protections whereever you are. The NSA is using physical location as proxy for citizenship sometimes it seems. But no one else is talking about changing physical location, just changing web hosting and related stuff (plus locating to the US to not get snooped on doesn't a logical approach). Anyway, as to what other Internet filtering there is "out there", that is a somewhat different issue. Some large non-US companies would probably rather only be snooped by their government rather than their government and the US, since hypothetically, their government would be less inclined to do industrial espionage against them.

elchief 13y ago

I wonder if the Feds subsidized Microsoft's purchase of Skype to make it easier to listen in on Skype calls? </conspiracy-theory>

nullc 13y ago
Pfft. If they were doing things like that then they would have blocked or best-offered the purchase of ICQ by the mail.ru folks.
- plorkyeran 13y ago
  ICQ was already utterly irrelevant by 2010.
  - nullc 13y ago
    facepalm

zmmmmm 13y ago

I was in a meeting the other week where moving a bunch of computing services to the cloud came up. The local vendor was making great hay with the ability to assert that data stored in their cloud infrastructure would not leave our (non-US) state and their company was outside of any foreign legal jurisdiction (ie: not Amazon). But I think the impact is actually far worse, because nobody actually cared whether it was US based. PRISM has not destroyed US business, it is destroying the cloud computing business everywhere, because nobody trusts that a) their own government is not in cahoots with the NSA anyway, or b) their own government is not even worse than the NSA. Cloud computing has been one of the great revolutions of the last 10 years, and has seriously lowered the barrier to entry for large scale computing, dramatically boosting innovation. I think PRISM may well set us back 5 - 10 years in terms of migrating services to the cloud and the cost of that is pretty much immeasurable.

rdl 13y ago
We're only a few years away from having technology which could make "the cloud" provably trustworthy. Plus, just because it's in your own datacenter today, doesn't actually make your infrastructure trustworthy, either -- incompetence tends to be a greater risk, including staff malfeasance, outside of professional IT organizations (cloud providers). There is technology (hardware and software) which can make the cloud more secure on every dimension than what people have today (and which can be applied to on-premises as well). There just hasn't been enough demand for it in the past.
flatline 13y ago
In some spheres the market is already swinging back towards the "private cloud", where the technologies hammered out from large scale cloud computing are available as commodity software and hardware solutions. And so the cycle continues...if innovation slows in one area, it will pick up in another. Perhaps it will be a net boon for the cloud in the long run; some other company opaquely housing your data has always been a problem, somewhat ironically, for government agencies, for instance, and certainly is for many private companies and individuals.
- deleted 13y ago

RRRA 13y ago

So the Internet will be more distributed because of this? ;)

AsymetricCom 13y ago
Tell me more about this "distributed" Internet. Sounds like a great way to make it robust and inexpensive, boosting the entire economy.

coldcode 13y ago

Everything I hope. Otherwise politicians won't change a thing.

znmeb 13y ago

This is junk - not even junk science, just pure bullshit.

AsymetricCom 13y ago
say that to German citizens
- zbyszek 13y ago
  Das ist aber Mist. Nicht bloß wissenschaflicher Mist, nur der reine Scheiß.
  - AsymetricCom 13y ago
    I know for a fact that not all Germans feel that way.

greendata 13y ago

Oh, it's going to get much worse than this. You know how hard it is to be get a bank account and/or financial services if you are US citizen living abroad? Other countries simply do not want US citizen's business in banking and financial services. It's too much trouble. I think non-US based cloud companies will start to require proof that you are not a US citizen if you want to use their service. It's simply too much trouble complying with their requirements and you're risking too much. Look what happened to Freedom Hosting recently. All those sites hacked by US Gov, partially b/c the US citizen was involved (duel Irish/US).

bowlofpetunias 13y ago

I think it will take some time for the damage to become clear. We as a European company are using services like Google Apps, AWS, Dropbox, Skype and such. We're not in any big hurry to incur the costs of migrating away from those, but it's definitely going to happen in the next 5 years. It partly depends on what alternatives pop up, and we're only at the start of that process. Also, the policies that preclude ever using such U.S. services again in the future are already being put in place in many organizations. The actual impact will be slow, but it feels very much irreversible. I introduced the use of AWS at our company. Today, I don't think I could sell that.

mrweasel 13y ago

Some companies might move away from cloud solution and buy VPS or physical servers in co-location facilities. However, companies like RackSpace, Amazon and Heroku doesn't really have that much to fear, they simply don't have European competitors. I might be wrong, but I struggle to even find a good European replacement for Gmail ( even though I'm willing to pay ). I don't really trust UK companies either, so the "best" solution I found so far are companies like Hetzner. It's not really the same as Rackspace, Amazon or Heroku, maybe there's a marked for a OpenStack provider in Europe?