MSPAlliance CEO: Privacy Concerns Could Cause Cloud Market Crash

When it comes to the public cloud, data breaches, theft and security vulnerabilities are bigger issues, said Weaver. "In comparison to private cloud, [public cloud poses] a very real danger," said Weaver.

Weaver cited a recent study by the Information Technology & Innovation Foundation that predicted the U.S. cloud industry could lose up to $35 billion by 2016 because of privacy and security concerns related to the NSA's data collection practices. Weaver said this could lead to a "a public cloud world where we have zero expectation of privacy" or to retrenchment away from the cloud.

[Related: Two Email Providers Shut Down Services, Citing Government Intrusion Concerns ]

"This is not an indictment on private cloud or traditional managed service providers," said Weaver. "The public cloud industry in the U.S. could lose up to $35 billion. It's not theoretical; it's an actual loss of revenue."

In light of recent events, Weaver said it's important for MSPs and cloud service providers to get a better handle on security and data protection and develop their own industry standards and regulations -- before cloud regulation is developed outside the industry.

The MSPAlliance has been certifying and auditing MSPs globally for the past decade, but Weaver said the advent of cloud computing has increased the importance of certification and industry standards.

"Ten years ago, MSPs on our advisory board came to us and said we should have our own standard," he said. "There are significant gaps in all the standards compared to what we do, and they were not designed with the cloud provider and MSP in mind."

Weaver urged MSPs to get properly certified to gain credibility in the market.

"Certification is a good way to show that it's signed by a public accountant, and that translates into any type of language," said Weaver. "I don't see we have enough qualified MSPs to do the work."

According to Weaver, large banks are well protected while small and midsize banks traditionally lag behind. This presents an opportunity for MSPs, said Weaver.

"More on the positive side, I think the opportunity in the long term is that service providers can generate revenue through cloud computing that secures and makes customer data private," said Weaver. "MSPs have a valuable role to be a triage."

For the past five years, Weaver believes the cloud has been focused on its ease of use and on being inexpensive, not on security.

"If there is one positive thing for MSPs and CRN readers, it's that there is a ton of opportunity out there," he said. "We are going to be joining MSPs and vendors to work on and spearhead this concept of how we get security and privacy back to cloud."

PUBLISHED AUG. 16, 2013