Saturday, November 25, 2017

Trump’s ‘shaky reputation on data privacy’ could cost US cloud industry $10bn by 2020

Country could lose its “status quo” as the world’s fastest growing cloud region, however, experts warn it is not the first time the industry is under threat.

President’s Donald Trump “shaky reputation on data privacy” could cost the country’s cloud industry $10.1bn by 2020, with the first $1bn potentially being lost this year already.

That is according to secure data centre experts Artmotion, which has looked into the Trump’s presidency popularity and its impact on the cloud sector.

Research from the Pew Research Center has found that 78% of people do not trust Trump to do the right thing when it comes to international affairs. This compares to 36% who felt the same way about former President Barack Obama.

Artmotion said this combined with a rapid increase in people expressing unfavourable opinions about the US more generally, could have a “severely detrimental impact” to the cloud computing industry.

The company said that growth for US cloud computing providers is already thought to be slowing, with the region expected to experience the slowest growth rate across eight global regions, according to IDC’s latest Worldwide Public Cloud Services Spending Guide.

However, the US is still forecasted to generate more than 60% of total worldwide cloud revenues to 2020, the guide shows.

Artmotion has warned that this forecast slowdown does not factor in the effect that President Trump’s “controversial record on data privacy” has had on business confidence in the US as a data hosting location.

Based on that, researchers estimate the US to lose $1bn in cloud revenues this year, and $3.1bn in 2018.

By 2019, the country could lose its largest share at $3.3bn and in 2020 it could potentially miss out on $2.7bn.

In the space of four years, Artmotion estimates the US’s cloud industry could lose $10.1bn and grow its market value to ‘only’ $214.4bn by 2020, down for IDC’s estimate of $217.1bn. The global industry is expected to be worth $380.9bn by 2020.

Mateo Meier, CEO of Artmotion, said: “In a market that is still expected to grow significantly in the next few years, it is vital that US service providers continue to attract new customers in order to retain market share.

“Despite the US’s current dominance of the global cloud computing market, there is no certainty that the status quo will be maintained. Perhaps the key reason for US cloud providers to be fearful is that this is not the first time we have been here.

“Edward Snowden’s revelations about PRISM and the NSA’s mass surveillance techniques were hugely damaging to US cloud companies.

“It also encouraged many businesses to completely rethink their data strategies, rather than continuing to trust that US cloud providers would guarantee the levels of data security and privacy they need. The impact that President Trump could have needs to be understood in that context.”


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