According to USA Today, “Edward Snowden’s whistleblowing escapades could seriously undermine the growth of cloud computing and thus stifle the growth models for America’s biggest tech companies.”
In reaction to the recent NSA revelations, CEO Tim Cook, AT&T CEO Randall Stephenson, Google computer scientist Vint Cerf, and other tech executives, met behind closed doors with President Obama last week. According to USA Today, the meeting covered a variety of issues, but, on the whole, the companies want to understand exactly what the government is doing with their systems as they try to assuage a lot of concerns from a lot of different stakeholders.
I’m always a bit concerned when a few execs who work for big, powerful companies declare themselves the spokespeople for the world of technology. Most of us with true “dogs in the hunt” do not have a PR firm nor lobbyists to get us seats at the table. Indeed, I see hundreds of venture-backed startups in the cloud computing space as being those with the most to lose, considering they don’t have the resources of the larger players. In other words, I don’t feel sorry for Google, AT&T, or Apple.
Things continue to take a turn for the worse, in light of some recent studies. For instance, a group called the Information Technology and Innovation Foundation (ITIF) on Tuesday issued a report that asserts Google, Microsoft, Yahoo, Facebook and Apple stood to lose as much as $35 billion over the next three years. This, as Europeans shy away from cloud services with suspect privacy safeguards, which appears to be the case with most US-based cloud services providers.
Thus, if NSA revelations cause a significant pull-back from the cloud, how much will this cost enterprises in terms of lost benefits? Indeed, this could be many times larger than the roughly $30 billion estimated by the ITIF. Perhaps as much as $300 billion in just direct cost savings. Perhaps many more in terms of lost value and missed opportunities.
So, there appear to be a few issues that cloud computing companies are facing, as well as the government:
- First, the assumption is that any data placed within public cloud providers may be accessible at any time by government agencies that want to see the data, typically through undisclosed court orders.
- Second, if that’s indeed the assumption moving forward, then companies, especially non-US companies, are de-incentivized to leverage US-based cloud computing providers as a place to store data.
- Third, this pattern will bring up many questions around the use of cloud computing technology, which could greatly hinder the adoption of the technology by those who could realize the most benefit.
- Fourth, the resulting slowdown in the adoption of cloud computing could also slow down the benefits, such as lower carbon emissions by sharing IT resources, as well as accelerating new companies’ abilities to leverage core technology that they may not have been able to afford in the past.
- Finally, considering that all of the above is factually true, the government should be compelled to act to protect this emerging technology. Thus, why they must act to create and maintain an environment that does a better job balancing public safety with the protection of privacy, which will allow new and emerging technology to grow and thrive.
To be fair to the Obama administration, they are taking steps to reform the issues that have arisen around the Snowden/NSA scandal. In a recent press conference, the President pledged to look at removing some of the FUD around the NSA scandal, but did not attribute Snowden as pushing them in that direction. Indeed, he stated that this was the intention all along.
While it’s impossible to know if the administration was truly moving to reform, it’s clear they understand the need to remove some of the existing uncertainty generated by the scandal. Indeed, they intend to establish more visibility around the court orders, as well as appoint an independent committee to oversee the way privacy is dealt with in the intelligence community. You have a volunteer right here, guys.
So, will these recent “big shots meet the big guy” meetings help cloud computing? While it’s good PR, I suspect it will be some time before any real change takes place. Cloud computing will take a hit, but it will still grow at a rather impressive rate relative to other areas in the technology market. The shame of it all is, it could have grown much larger, and much faster.