May 13, 2014

Have revelations of NSA spying on the public harmed business for US based data centers?

I think it’s fair to say most of us understand a lot more about just how pervasive US government monitoring is in light of the Snowden revelations. I also think it’s fair to say that there was even more outrage about it in other countries. There were predictions that this would harm the ability of US based data centers to compete in the global market. Now that some time has passed since the story broke, have these predictions proved to be accurate?

I am not sure what the effect has been, but why do people think the NSA only spies on US based data centers? I'd be very surprised if they haven't infiltrated plenty of foreign data centers as well. So using a foreign one isn't necessarily going to be better than a US-based one.

There has been some effect. A New York Times article from a couple months ago pointed out some of the impact. Microsoft has lost a number of contracts, including a pretty significant one with the government of Brazil. It’s hard to get accurate numbers, but an analyst at the Information Technology and Innovation Foundation estimates a potential loss of $35 billion by 2016 for the cloud computing industry. Forrester puts potential losses to US businesses even higher, at $180 billion. However, US companies are already taking steps to mitigate the damage by spending millions of dollars to construct new data centers outside of the US where they will be less exposed to NSA data theft. 

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