Cloud Companies Take A Hit Following PRISM Leaks

Amazon, Microsoft, Google, and other US tech companies must be very worried about PRISM and the effects the NSA’s surveillance will have on their customers, especially those outside of the country. In fact, I wouldn’t be surprised to see European companies using PRISM as a commercial advantage.

The information about the National Security Agency’s PRISM surveillance program leaked by former NSA contractor Edward Snowden may or may not have harmed national security, depending on who you ask. But according to a recent survey by the Cloud Security Alliance, US cloud service providers will be taking a hit in the form of lost overseas customers due to the PRISM revelations. In the survey, more than half (56 percent) of 207 respondents who identified themselves as non-US citizens said they would be less likely to use US-based cloud services because of Snowden’s disclosures.

Granted, these results shouldn’t be used to reach a definitive conclusion—the participants were not verified in any way—but there’s no way foreign cloud companies are going to let this crisis go to waste.

When Amazon CFO Thomas Szkutak was asked on the company’s earnings call about AWS prospects abroad, he gave a nice, vague non-answer:

“… the AWS business is expanding, and its incredible opportunity globally. We recognize that, the team recognizes that. And we’ll continue to work on that on behalf of customers.”

It’s likely that Amazon is planning to deal with the demand for local on-site clouds in non-US countries to satisfy data privacy concerns, but seeing as how Amazon is a US entity, American laws may make that difficult.

Following the PRISM revelations, I expect to see European cloud companies playing dirty, and US cloud companies losing business abroad. It’s only a matter of time.