Global IT firms may take $180-billion hit over 3 years on US e-surveillance project

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August 27, 2013

Indian IT companies could also be affected as they have invested heavily in cloud computing

Chennai: Global information technology service providers may take a $180-billion hit, or take a 25 per cent hit in overall revenue, in the next three years due to PRISM, the US National Security Agency’s electronic surveillance programme.

August 27, 2013

Indian IT companies could also be affected as they have invested heavily in cloud computing

Chennai: Global information technology service providers may take a $180-billion hit, or take a 25 per cent hit in overall revenue, in the next three years due to PRISM, the US National Security Agency’s electronic surveillance programme.

According to a Forrester analyst, US customers may also bypass cloud providers for their international and overseas businesses, costing the IT service providers up to 20 per cent of this business as well.

This technology allows a company to move away from buying dedicated hardware by using a shared cloud infrastructure. And, the charges are based on ‘pay as you use’ model.

The US-based Information Technology and Innovation Foundation (ITIF) had predicted that the US cloud computing industry could lose up to $35 billion by 2016 due to the PRISM project, which is said to have direct access to servers of firms, such as Google, Apple and Facebook.

The projected $35-billion loss is on the assumption that the US eventually loses 20 per cent of the foreign market to competitors and retains its current domestic market share, said Daniel Castro, a senior analyst with ITIF and Director of the Center for Data Innovation, US.

“We think this [ITIF] estimate is too low and could be as high as $180 billion or a 25 per cent hit to the overall revenues of IT service providers in that timeframe,” said James Staten, an analyst at research firm Forrester.

In his blog, Staten wrote: “We also agree with ITIF’s recommendation that the US Government needs to act quickly to set the record straight about what information it does and does not (already) have access to. And would add that it needs to reset the judicial-NSA relationship back to a more objective stance similar to what the founding fathers had in mind.”


Courtesy: The Hindu Business Line