Measuring the Snowden Effect: Edward Snowden’s Impact on Cloud


How substantially did Edward Snowden damage the cloud computing industry with his NSA leak? Forrester Research says the initial projections were inflated. Actually, Snowden is specifically concerned with popular Internet services – including one used by The New Yorker to deliver an interview with him in 2014.

  • The Snowden Effect
  • American Cloud Industry Still Strong
  • Bye-Bye to Facebook, Google, Dropbox?
  • Cloud with Security Expertise

The Snowden Effect

Since Edward Snowden has been in the news so much lately – with the best feature documentary prize for Citizenfour and his interview for the New Yorker Festival – industry analysts have been watching the cloud market closely. A massive fallout was expected following Snowden’s revelations about NSA’s Prism spying program, but a Forrester Research report argues that the long-term consequences will be less dramatic than originally imagined.

Neelie Kroes, who was the European Commissioner for the Digital Agenda when the Snowden story broke in 2013, was one of the first people to publicly mention the potential downturn in the American cloud market (ComputerWeekly). If firms are concerned about surveillance, Kroes argued, they would likely turn away from cloud services offered by US-based companies. Apparently part of the “digital agenda” of the European Commission is to exploit potential weaknesses and grab market share.

However, obviously none of us wants somebody looking over our shoulder. How significant of a problem is the NSA to businesses worldwide? In an age when Chinese and Russian and North Korean hackers seem to be having their way with the infrastructures of healthcare companies, federal agencies, and movie studios, how much are companies willing to adjust their business strategies based on a threat of governmental snooping?

The short answer: Not much, because that threat is “overblown.”

American Cloud Industry Still Strong

Now that two years have passed since the first reports on the Snowden leak appeared in The Guardian, the Forrester assessment found that the cloud market was not hit as hard as was predicted in 2013.

“It seems the international business was a lot more insulated from US spying compared to what was originally thought,” head analyst Edward Ferrara explained. “[T]he data suggests such concerns about Prism were overblown.”

The revelations about the Snowden Effect are just one piece of a report published by Forrester entitled the 2014 Business Technographics Global Infrastructure Survey. The whitepaper, which utilized the perspectives of more than 3000 IT and business executives in nine countries across five continents, found that one in four international companies (26%) lowered their budget for American cloud services since the leak occurred.

“This … needn’t be viewed as catastrophic for service providers,” offered ComputerWeekly, “as users weren’t sharing a great deal of data with them in the first place.”

Concurring with the ComputerWeekly description, the abstract of the report revealed that companies were choosing to add encryption to their services and processes rather than actually transferring data out of the country.

Bye-Bye to Facebook, Google, Dropbox?

Dropbox is popular. In other words, it’s trusted as a file-sharing service. Its growth rate has been truly staggering:

  • Reached 100 million users in November 2012
  • Doubled to 200 million users by November 2013
  • Achieved 300 million users by May 2014

Google? Its cloud email service Gmail reportedly had about 500 million active users in December 2013. Facebook puts both of them to shame, though, with 1.35 billion active users monthly (third quarter 2014).

All of those users should pull the plug, says Edward Snowden.  In a live discussion with investigative journalist Jane Mayer for the New Yorker Festival, he argued that the privacy protections for all three services were weak – a comment that came across as a bit bizarre and Orwellian for those watching on YouTube or Google Hangouts, on which a Google logo hovered above his head.

Snowden told an audience member during the question-and-answer session that it’s wise of Internet users to “search for encrypted communication services” since those methods of interaction “enforce your rights.” He said that users should avoid companies that have proven “hostile to privacy” – specifically naming Facebook, Google, and Dropbox. He recommended SpiderOak as a replacement for Dropbox because that service keeps files encrypted in all locations as well as in transit. In other words, Snowden seemed to be particularly concerned with the security mechanisms of particular firms rather than targeting a specific technology such as cloud computing.

In addition to changing Internet behavior, Snowden said that phone behavior should be adjusted as well. He posited that it was unwise for US citizens to send text messages that weren’t encrypted, and that solutions such as RedPhone and Silent Circle could be used to enhance mobile protection. Even with those apps in place, though, Snowden said that phones should all be considered dangerous by US users since service providers could be forced to give up your information through a subpoena.

Snowden did not initially intend for Russia to be his final destination. He was planning to go to Latin America, but a freeze on his passport waylaid him in Moscow.

Cloud with Security Expertise

“I appreciate the support that everyone’s given me,” Snowden said during his interview, “but it’s important to remember that I’m an ordinary guy.”

At Superb Internet, we believe every ordinary guy and every business deserves great support. We also understand Snowden’s security concerns.

We believe it’s critical to work with a cloud hosting company that isn’t just selling cloud servers but is investing in security (our datacenter is SSAE 16 audited, and our organization is certified to meet ISO 9001:2008 and ISO 27001) and offers a full range of hosting solutions.

By Kent Roberts