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Cloud Service Providers: Did the NSA Trash Your International Expansion Plans?

Cloud Service Provider tripped up?Sometimes your best laid plans can be laid to waste by something you never saw coming – even if you pride yourself on examining all the angles. For U.S. cloud computing companies, that something may have come in the form of 3 little letters.

N-S-A.

Cloud service providers making big international expansion plans could now be at great risk of becoming collateral damage of the exposure of NSA’s snooping into all manner of electronic records.

At a meeting in Estonia on July 4, the EU Commissioner for Digital Matters Neelie Kroes said…

“If European cloud customers cannot trust the United States government, then maybe they won’t trust US cloud providers either. If I am right, there are multi-billion euro consequences for American companies.”

Is she right? Time will tell.  I think it’s a safe bet to say she’s at least partially right.  And I doubt that sentiment is unique to the EU.  What about Asia, where the growth of cloud services is much more rapid?  We’ve certainly seen companies damaged by far less substantive scandals in the past.

Given that security is a major issue for buyers, trusting that their cloud service provider’s security is adequate is very, very important.  If that trust is now seriously damaged, a great deal of effort put into relationship-building and marketing may be undermined.

Cloud service provider marketers should be assessing exactly what the fallout is among customers and prospects outside the US.  Quickly getting a handle on the depth of the issue (or if there is an issue at all) will provide management with the intelligence needed to take the appropriate steps before your competitors do.

That needs to be done by taking the pulse of key international markets now, and probably tracking the market’s mindset over time to understand when or whether the scandal passes and how the market’s perceptions of your company have changed.

More generally, this should be a wake-up call to all marketers to spend some time in scenario planning – playing what-if games to rehearse how you can react to potentially damaging events.  Those events could be anything from a security breach to a product recall to a company executive or celebrity endorser being caught in a compromising situation.

Proactively working through those hypothetical situations should also include some level of customer/market input so you can better predict how customers and prospects might react.

About the Author

Ed Erickson is the President of Erickson Research, a Chicago market research consulting firm. You can find Ed on LinkedIn and .

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