PRISM impact on cloud was 'overblown' - analyst

Forrester says impact of Snowden's revelations are 'smaller than originally thought'

The cost of Edward Snowden's US government spying revelations on the cloud market has been much smaller than initially feared, according to Forrester, which said initial claims were "overblown".

In August 2013, in the wake of Snowden's claims the US government used PRISM to spy on tech users' data, Forrester said the impact on the cloud sales would be colossal, amounting to a $180bn (£121.4bn) dip in sales.

But in a blog post today, the analyst said it has not turned out to be so bad.

"PRISM's impact is still felt in the market for internet services [but] the size of the storm and its resultant impact is smaller than was originally thought," said Forrester analyst Edward Ferrara. "It seems the international business was a lot more insulated from US spying as compared with what was originally thought."

Since Snowden's initial revelations, tech firms have come out fighting, talking up how important privacy and data security is to them. Forrester said Snowden's revelations helped put security at the top of the agenda.

"Edward Snowden's disclosure of the PRISM programme lifted cybersecurity from an abstract concept to one that evoked a tremendous level of emotion, much of it driven by the emotion surrounding privacy – or, more accurately, the need so many have for privacy," he said.

But the cloud market did not suffer as much as was first feared, he added.

"The data suggests such concerns were overblown," he said. "And in fact, Forrester's earlier contention that international enterprises would stick with their US partners but take a stronger position in managing their own security has been proven out.

"Global awareness of cybersecurity is on the rise and companies globally are taking substantive steps to protect their valuable information not only from government spying but cyberattacks as well."