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Forrester: The Cost of PRISM Will Be Larger Than ITIF Projects
August 15, 2013


Earlier this month, the Information Technology & Innovation Foundation (ITIF) published a prediction that the US cloud computing industry stands to lose up to $35 billion by 2016 thanks to the National Security Agency (NSA) PRISM project. However, Forrester's James Staten thinks the estimate is too low and could be as high as $180 billion or a 25% hit to overall IT service provider revenues in that same timeframe.

According to Staten, David Castro's analysis really limited the impact to the actions of non-US corporations. The high-end figure assumes that US-based cloud computing providers would lose 20% of the potential revenues available from the foreign market.

He writes in a blog post: "We believe there are two additional impacts that would further be felt from this revelation: 1) US customers would also bypass US cloud providers for their international and overseas business — costing these cloud providers up to 20% of this business as well; 2) non-US cloud providers will lose as much as 20% of their available overseas and domestic opportunities due to other governments taking similar actions."

Staten goes on to examine the two cases in detail in the post. You can read the full blog post here.


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Forrester Research (Nasdaq: FORR) is a global research and advisory firm serving professionals in 13 key roles across three distinct client segments. Our clients face progressively complex business and technology decisions every day. To help them understand, strategize, and act upon opportunities brought by change, Forrester provides proprietary research, consumer and business data, custom consulting, events and online communities, and peer-to-peer executive programs. We guide leaders in business technology, marketing and strategy, and the technology industry through independent fact-based insight, ensuring their business success today and tomorrow. For more information, visit www.forrester.com.


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