U.S. technology companies have lost and will continue to lose more business to their foreign competitors over the spy activties of the National Security Agency(NSA), the New America Foundation said in a report on Tuesday.

The NSA's actions pose a serious threat to the current value and future stability of the information technology industry, which has been a key driver of economic growth and productivity in the United States in the past decade, said the report.

The report believed that major losses will likely result from diminishing confidence in U.S. companies as trustworthy choices for foreign government procurement of products and services and changing behavior in the business-to-business market.

"Trust in American businesses has taken a significant hit" since the initial reports on the PRISM program suggested that the NSA was directly tapping into the servers of nine U.S. companies to obtain customer data for national security investigations, according to the report.

Given heightened concerns about the NSA's ability to access data stored by U.S. companies, it is no surprise that American companies offering cloud computing and webhosting services are among those experiencing the most acute economic fallout from NSA surveillance, said the report.

In the past year, a number of American companies have reported declining sales in overseas markets, loss of customers, and increased competition from non-U.S. services marketing themselves as "secure" alternatives to popular American products.

Qualcomm, IBM, Microsoft, and Hewlett-Packard have all reported that sales are down in China as a result of the NSA revelations.

A January 2014 survey of 300 British and Canadian businesses found that 25 percent of respondents were moving their data outside of the U.S. and that an overwhelming majority was willing to sacrifice performance in order to ensure data protection.

"The NSA's PRISM program is predicted to cost the cloud computing industry from $22 to $180 billion over the next three years," said the report.

A variety of U.S. companies have been put at a disadvantageous position due to the NSA disclosures, according to the report.

"With faith in U.S. companies on the decline, foreign companies are stepping in to take advantage of shifting public perceptions," said the report.

For example, German companies that are increasingly uncomfortable giving business to American firms are excluding American businesses from some requests for proposals.

The German government announced in June 2014 that it intends to end its contract with Verizon, which provides Internet service to a number of government departments, in response to that company's cooperation with the NSA.

Go to Forum >>0 Comment(s)