Microsoft has lost customers, including the government of Brazil.<\/p>\n
IBM is spending more than a billion dollars to build data centers overseas to reassure foreign customers that their information is safe from prying eyes in the United States government.<\/p>\n
And tech companies abroad, from Europe to South America, say they are gaining customers that are shunning United States providers, suspicious because of the revelations by Edward J. Snowden that tied these providers to the National Security Agency<\/a>\u2019s vast surveillance program.<\/p>\n Even as Washington grapples with the diplomatic and political fallout of Mr. Snowden\u2019s leaks, the more urgent issue, companies and analysts say, is economic. Technology executives, including Mark Zuckerberg of Facebook, raised the issue when they went to the White House on Friday for a meeting with President Obama.<\/p>\n It is impossible to see now the full economic ramifications of the spying disclosures \u2014 in part because most companies are locked in multiyear contracts \u2014 but the pieces are beginning to add up as businesses question the trustworthiness of American technology products.<\/p>\n The confirmation hearing<\/a> last week for the new N.S.A. chief, the video appearance of Mr. Snowden<\/a> at a technology conference in Texas and the drip of new details about government spying have kept attention focused on an issue that many tech executives hoped would go away.<\/p>\n Despite the tech companies\u2019 assertions that they provide information on their customers only when required under law \u2014 and not knowingly through a back door \u2014 the perception that they enabled the spying program has lingered.<\/p>\n \u201cIt\u2019s clear to every single tech company that this is affecting their bottom line,\u201d said Daniel Castro, a senior analyst at the Information Technology and Innovation Foundation, who predicted that the United States cloud computing industry could lose $35 billion by 2016<\/a>.<\/p>\n Forrester Research, a technology research firm, said the losses could be as high as $180 billion<\/a>, or 25 percent of industry revenue, based on the size of the cloud computing, web hosting and outsourcing markets and the worst case for damages.<\/p>\n The business effect of the disclosures about the N.S.A. is felt most in the daily conversations between tech companies with products to pitch and their wary customers. The topic of surveillance, which rarely came up before, is now \u201cthe new normal\u201d in these conversations, as one tech company executive described it.<\/p>\n \u201cWe\u2019re hearing from customers, especially global enterprise customers, that they care more than ever about where their content is stored and how it is used and secured,\u201d said John E. Frank, deputy general counsel at Microsoft, which has been publicizing that it allows customers to store their data in Microsoft data centers in certain countries.<\/p>\n At the same time, Mr. Castro said, companies say they believe the federal government is only making a bad situation worse.<\/p>\n \u201cMost of the companies in this space are very frustrated because there hasn\u2019t been any kind of response that\u2019s made it so they can go back to their customers and say, \u2018See, this is what\u2019s different now, you can trust us again,\u2019\u00a0\u201d he said.<\/p>\n In some cases, that has meant forgoing potential revenue.<\/p>\n Though it is hard to quantify missed opportunities, American businesses are being left off some requests for proposals from foreign customers that previously would have included them, said James Staten, a cloud computing analyst at Forrester who has read clients\u2019 requests for proposals. There are German companies, Mr. Staten said, \u201cexplicitly not inviting certain American companies to join.\u201d<\/p>\n He added, \u201cIt\u2019s like, \u2018Well, the very best vendor to do this is IBM, and you didn\u2019t invite them.\u2019\u00a0\u201d<\/p>\n The result has been a boon for foreign companies.<\/p>\n Runbox, a Norwegian email service that markets itself as an alternative to American services like Gmail and says it does not comply with foreign court orders seeking personal information, reported a 34 percent annual increase in customers after news of the N.S.A. surveillance.<\/p>\n Brazil and the European Union, which had used American undersea cables for intercontinental communication, last month decided to build their own cables between Brazil and Portugal, and gave the contract to Brazilian and Spanish companies. Brazil also announced plans to abandon Microsoft Outlook for its own email system that uses Brazilian data centers.<\/p>\n Mark J. Barrenechea, chief executive of OpenText, Canada\u2019s largest software company, said an anti-American attitude took root after the passage of the Patriot Act<\/a>, the counterterrorism law passed after 9\/11 that expanded the government\u2019s surveillance powers.<\/p>\n But \u201cthe volume of the discussion has risen significantly post-Snowden,\u201d he said. For instance, after the N.S.A. surveillance was revealed, one of OpenText\u2019s clients, a global steel manufacturer based in Britain, demanded that its data not cross United States borders.<\/p>\n \u201cIssues like privacy are more important than finding the cheapest price,\u201d said Matthias Kunisch, a German software executive who spurned United States cloud computing providers for Deutsche Telekom. \u201cBecause of Snowden, our customers have the perception that American companies have connections to the N.S.A.\u201d<\/p>\n Security analysts say that ultimately the fallout from Mr. Snowden\u2019s revelations could mimic what happened to Huawei, the Chinese technology and telecommunications company, which was forced to abandon major acquisitions and contracts when American lawmakers claimed that the company\u2019s products contained a backdoor for the People\u2019s Liberation Army of China \u2014 even though this claim was never definitively verified.<\/p>\n Silicon Valley companies have complained to government officials that federal actions are hurting American technology businesses. But companies fall silent when it comes to specifics about economic harm, whether to avoid frightening shareholders or because it is too early to produce concrete evidence.<\/p>\n \u201cThe companies need to keep the priority on the government to do something about it, but they don\u2019t have the evidence to go to the government and say billions of dollars are not coming to this country,\u201d Mr. Staten said.<\/p>\n Some American companies say the business hit has been minor at most.<\/p>\n John T. Chambers, the chief executive of Cisco Systems, said in an interview that the N.S.A. disclosures had not affected Cisco\u2019s sales \u201cin a major way.\u201d Although deals in Europe and Asia have been slower to close, he said, they are still being completed \u2014 an experience echoed by several other computing companies.<\/p>\n Still, the business blowback can be felt in other ways than lost customers.<\/p>\n