What Next for Cloud Computing After PRISM?

cloud_computingJust like the fashion industry, the information technology industry moves in cycles with trends coming and going and then returning with a bang.

Taking a look at how things stand for cloud computing right now, it seems that the latter will hit that cycle very soon and go out of fashion faster than a speeding bullet.

A lot of the leaked information on the internet has opened the eyes of Americans and investors in US cloud services, making them aware of the fact that all of their important and sensitive data is actually being accessed by the NSA at their own whim.

This means that one cannot entrust classified and very important data about their company or organization to a cloud service provider, without the NSA having full access to it.

Snowden's impact on cloud computing

The PRISM and NSA break out has exposed the fact that data security is in fact a big lie and even though it was something that some have seen it coming for a very long time, it caught many individuals by surprise.

At the same time the news came out, it also raised some questions across the C level in the enterprise as to whether they would still consider investing in a cloud strategy or not.

According to Neelie Kroes, European Commissioner for Digital Affairs,

If European cloud customers cannot trust the United States government, then maybe they won’t trust U.S. cloud providers either.

One morning, an exchange with an industry analyst revealed that more than 100 clients believe that the United States Government has signed the bill of death for every cloud service provider in the country, aspect which is extremely concerning, due to the fact that the losses projected are of more than 30 billion dollars.

BVP Cloud Index chart

On top of that, when hearing the news, many individuals and companies have put their plans on hold, because they don’t really want anyone else but them having access to their priceless information, on a business and personal level.

Snowden maybe did know what he’d cause when he let his mouth loose, but he certainly wasn’t aware of how much of an impact it would make.

Now there are 2 articles that have been written days of each other which continue to add more wood to the fire.

The ITIF came out to say that because of the fears regarding security and data privacy, the cloud computing industry will take a hit of around 36 billion dollars in the next 3 years and it’s all because of PRISM.

However, according to a Forrester analyst, this estimation was very modest. According to the info he published on his blog, he revealed that the cloud computing vendors should be ready to gulp a loss of approximately 180 billion dollars.

Lavabit and SilentMail closed

But the fact is that it’s not only the cloud computing industry that needs to put up with these near-death experiences, because third party encryption and security services are walking the plank as well.

Just this week 2 major E-mail encryption services, Silent Circle and Lavabit respectively, were forced to shut down due to the spying done by the NSA. In order to protect their privacy, Silent Circle informed their customers that it has killed off Silent Mail.


It seems that it’s very comfortable for such companies to close their own doors than actually compromise their very own values and risk user privacy and data. Because of it, it also raises the question of the worthiness of encryption services, given the fact that the US Government can just knock on their doors and request information to be handed over.

The M2M

So where are all of these people going to go now? Back to on-premise?
Or will they just continue using the cloud services like nothing even happened?
Maybe they could take on the path of Hybrid cloud?

It seems that vendors who advocate a hybrid strategy and have a core strength in on-premise software, this is the best time to start shouting about it.

Below there are some vital considerations:

Secure hybrid cloud

  • Don’t forget that cloud developers are a strength.
  • No one should ignore the importance of cloud-cloud integration.
  • A cloud hybrid strategy should be chosen to fit your business and not vice versa.
  • Be aware of where your servers are and also of the data protection laws.
  • Carefully read the cloud contract to find out who’s responsible for your data.
  • Use your personal encryption rather than that of a third party company.

Key take-always from the report:

  • Based on sources that have been cited in the report, the global enterprise public cloud computing market will be a 207 billion dollars industry by 2016.
  • Between 2012 and 2016, worldwide spending for CC technology is expected to grow by as much as 100%, while according to the report, in the same period of time the Information Technology market will only grow by 3%.
  • Of the 13,5 billion dollars in 2011 investments that were made by cloud computing service providers, 41,6% or 5,6 billion dollars came from companies outside N. America.

The Information Technology Investment Fund managed to complete 2 forecast scenarios, with the first predicting a reduction of 20% in foreign market share, and constant market share growth domestically.

On the other hand, the second scenario presumes a 10% reduction in foreign market share to Asian and European competitors and 0% loss of current projected market share domestically.

Worldwide personal cloud subscriptions chart

It seems that the current situation is not stacking up well for cloud providers in the United States, but just like the fashion industry, it could just be a trend that will come and go and then come back again with a bang. However, with cloud, this is going to be a thunderclap.

People are advised to apply some intelligence, ignore the scaremongering and just watch the skies.

Here’s how Australians are doing it:

Sooner or later, all of this will just be some old news and many great changes will have already been made to ensure the industry enjoys stability, trust and most importantly profitability.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.