Public and virtual cloud services saw revenue earnings surpass $29 billion in 2011. The IT research firm Forrester projects that by 2020, that figure will jump to over $240 billion. There are the usual players – Salesforce.com, Amazon.com Inc., and Google Inc. – but there is also the Chinese company, ZTE Corp. ZTE is the world’s fifth largest telecoms equipment maker. The company is facing a suspicious and jittery market in the West, something that remains common for Chinese companies trying to break into these specific markets.
The issue of data privacy has become a highly contentious issue ever since NSA government contractor Edward Snowden shared damning information about the way in which the U.S. government oversees surveillance operations both at home and abroad. Indeed, the ripple effect hasn’t been fully grasped. For instance, Brazilian President Dilma Rouseff recently bowed out of a state visit to the White House, citing anger that the NSA spied on her.
As for ZTE, they are presumably facing a similar backlash with revelations about the NSA. On top of that, they are a Chinese company, and Westerners apparently remain skeptical about putting trust into a company that comes from China and is involved with privacy data management systems. In fact, ZTE had been profitable, at least until January-June of 2012. Profits for the company were down by nearly 12 percent from the previous year. Is this a coincidence or is it related to the fact that they are a Chinese company, coupled with growing concerns regarding data privacy? Loss of profits might be related to security worries, which the company is currently addressing. But at the same time, ZTE is most likely aware of the challenges they will be facing when trying to reach Western markets. Obviously, with their plans to expand, ZTE believes the risk is worth it.
On another note, many in the cloud computing industry in the U.S. have been concerned that, as a result of NSA’s surveillance programs, U.S. companies will suffer abroad.
Are you in the cloud computing industry, and do you think NSA’s surveillance programs have hurt your company’s business operations abroad?