Forecasting the costs

August 15th, 2013 by Jay Shaw Leave a reply »

One of my colleagues just sent me a PDF on likely costs to the U.S. cloud services industry from European nervousness about doing business with companies primarily subject to U.S. law. The loss estimates are big — from $22 to $35 billion over the next three years. All because of a handful of poor policy decisions.

The white paper is by the Information Technology & Innovation Foundation (Republican Utah Senator Orrin Hatch is an honorary board member). You can find the study here.

Obviously, this paper begs the question — Will at least some European companies start looking to cancel deals with American talent management, HR, CRM and ERP cloud providers? If so, the losses might be substantially higher.

Might there be a bit of a move back toward on-premise license or company-specific private cloud sales? See here for a much higher loss estimate that factors in some of the likely American company buying behavior changes.

Might some U.S. provider companies split themselves into two or more stand-alone entities in order to avoid the jurisdiction issues currently coming to the fore?

We’ve written on this topic before (here and here) and we don’t claim to have a crystal ball. However, it does seem that the issues aren’t likely to go away, at least not quietly.

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