The Information Technology and Innovation Foundation (ITIF), a non-profit think tank with a focus on technology innovation, recently released a report in which it raises its previous estimation of how much surveillance by the US intelligence community could cost American tech and IT companies.
In 2013, the non-partisan group projected that the NSA-related revelations stemming from Edward Snowden’s 2013 leaks would costs as much as $35 billion in lost business. The organization was just one of many who predicted the loss of foreign customers in the cloud computing sector. Unfortunately, ITIF’s new report says the economic fallout will “likely far exceed” that initial estimate.
According to the report, many countries are now looking to enact tougher polices for American technology companies operating on their soil. American companies saw drops in their sales in China after reports said the NSA program built backdoors into encryption products. Further, Russia has enacted laws that require companies to store data domestically. And a new Chinese regulation established this January forces tech companies to submit to audits and build encryption keys in their products.
Cloud providers continue to bleed as people outside of the United States question whether their sensitive data can remain protected. For U.S. tech firms that sell hardware, software, and services, research firm Forrester estimates losses for cloud businesses to total $180 billion through 2016. With these firms potentially seeing their revenues decline by 20% over the next three years.