Europe drives for European-based cloud network following US spy incident

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In the wake of reports that the US government and NSA have used clandestine electronic surveillance (PRISM), the European Commission has urged for the creation of an EU-based cloud system.

The impact on US cloud vendors has been calculated by the Information Technology & Innovation Foundation (ITIF) as up to $35bn (£22bn) in lost revenue over the next three years. The US cloud computing industry may suffer as concerned customers switch to providers that store data outside the US. A post-PRISM survey by the Cloud Security Alliance found that 56 per cent of respondents said they are less likely to use a provider based in the US, while 10 per cent of non-US residents had already cancelled a cloud contract with a US firm.

According to the ITIF report, titled ‘How much will PRISM cost the US cloud computing industry?’ (August 2013), global spending on cloud computing is predicted to grow by 100 per cent between 2012 and 2016, while the prediction for the global IT market generally is growth of just three per cent. The impact of PRISM is therefore particularly acute: not only do cloud vendors have to retain their existing contracts, they must actively recruit new customers to retain their market share…

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