Non-US Based Organizations And Even Some US Organizations Will Not Tolerate Snooping In A Post PRISM World
Since the Edward Snowden PRISM revelations, Constellation has received a steady stream of inquiries on cloud strategy. In fact, nervousness runs high among many non-US based companies using services from US based cloud companies across the cloud stack. In early August 2013, the Information Technology & Innovation Foundation put out its report “How Much Will PRISM Cost the U.S. Cloud Computing Industry” Assuming that 20% of current clients switch to a non US based provider, the report estimates a loss of $22 to 35B by 2016.
Constellation agrees. All signs point to an anti-US stance until the security issues is addressed. The odds on the US government moving fast on this issue are as good as Major League Baseball players or Tour de France Cyclists honoring a performance enhancement drug use ban. In fact, Constellation is aware of at least 50+ contracts that have been put on hold or cancelled in the past 30 days. With the EU’s Nellie Kroes already sounding the alarm bells in a way she only can, cloud buyers have taken notice.
The Bottom Line: Clients Should Consider Alternatives To Pure Cloud Models And Encryption Technology
Interesting enough, fifteen years into the cloud revolution, talk has rekindled about building on-premises software in light of this scandal. Unfortunately, the last major on-premises software company to receive funding squandered it all in 2005 and retooled to the cloud. Furthermore, a few entrepreneurs are looking at VC funding to take some key systems back on-premises.
However customers do not have time to wait for new software to arrive in the on-premises deployment option. In the meantime, a few near term strategies have emerged: