How the NSA is damaging the American economy

Network World reports: The spectacle of National Security Agency contractor Edward Snowden exposing the covert spying nature of US federal officials has sent ripple waves through the technology industry — especially in the outsourcing arena.

Experts predict the NSA fiasco could result in the loss of business for some hosting vendors, but it’s hard to say exactly what the impact has been or will be.

The head of a European cloud computing provider said recently though that he’s seen a “measurable impact” from companies looking to use its services to escape what they fear could be the prying eyes of the US NSA.

“It has not been a profound surge, but there is definitely a measureable impact,” says Robert Jenkins, co-founder and CTO of Cloud Sigma, which is headquartered in Switzerland and has data centers across Europe and the United States. “We’ve definitely seen cases where people are turning to us because of this.”

Forrester analyst and cloud tracker James Staten predicted this could happen in a blog post in the summer. Information Technology & Innovation Foundation (ITIF) estimated in a report that the US cloud computing market could stand to lose up to $35 billion by 2016 because of vendors bypassing US providers and looking to overseas competitors. Staten says that’s the low end of an estimate though. [Continue reading…]

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