NSA snooping could cost U.S. tech companies $35 billion over three years

U.S. cloud providers have already lost business over the NSA leaks, but now the Information Technology and Innovation Foundation (ITIF) has a report putting a dollar amount on the short-term costs: $21.5 to $35 billion over the next three years. 

ITIF based these estimates in part on the Cloud Security Alliance survey showing that 10 percent of officials at non-U.S. companies cancelled contracts with U.S. providers and 56 percent of non-U.S. respondents are hesitant to work with U.S. cloud based operators after the leaks.

The cloud computing industry is big business: it’s estimated to be a $131 billion market by the end of 2013, and a $207 billion market by 2016.  The U.S. has historically dominated the space. But after the Snowden leaks detailed the level of access the NSA has to data hosted by U.S. companies, European officials and cloud providers raised privacy alarm bells.

This leads ITIF to conclude the NSA leaks “will likely have an immediate and lasting impact on the competitiveness of the U.S. cloud computing industry if foreign customers decide the risks of storing data with a U.S. company outweigh the benefits.”

Even before the NSA leaks, there were rumblings that data given to U.S. companies wasn’t safe from U.S. law enforcement thanks to the Patriot Act — some of which were validated by Microsoft’s admission that even E.U.-based cloud data hosted by the company was subject to the law. The European Parliament raised those concerns in an October 2012 report about privacy in the cloud.