The Consumer May Not Care Much for Snowden, But Business Does.

Monday, January 20, 2014

Brian King


With the news that a $700 million deal between France and the UAE has been put in jeopardy because of 'security compromising components' it may be time to start looking at how the recent NSA backdoor leaks are going to be affecting business.

Business to business deals are likely to suffer a lot more than the consumer space, while the media is trying to create a certain 'tension' around the news, it would appear the public either knew it was happening already or are simply not too concerned. Privacy has become an issue nobody would appear to care about, with Facebook, Google, Yahoo & Microsoft all appearing on the PRISM slideshow that was leaked by Snowden. Has there been a huge decline in use? I think not.

As Cisco's sales across the board have been taking a beating and yet the fallout from the leaks from Edward Snowden aren't yet fully known. Cisco's rivals IBM, Oracle and EMC are all being investigated by the Chinese government into revelations that the NSA hacked network systems at universities within China and Hong Kong.

Cisco has seen new orders fall across emerging markets fall, some of the largest being Russia dropping 30 percent and Brazil dropping 25 percent after the NSA scandal with their Chief Financial Officer, Frank Calderone commenting the revelations on the US National Security Agency has caused a "level of uncertainty or concern" among international customers.

The Information Technology & Innovation Foundation expect the U.S cloud computing industry to stand to lose between $22 - $35 billion over the next three years, this includes the loss of revenue as the sector grows. While this is damaging for U.S based companies, it leads to great opportunities for European companies. The EU has threatened to freeze data sharing with the US over the law, however due to the secret services being under each government, it has no way of knowing how the UK government and GCHQ have been monitoring EU citizens. This type of rhetoric from the EU may give light to countries buying technology who see the EU as a safer option to that of US companies.

With news that many US companies were involved in placing backdoor access into their routers, trust in the large vendors has declined steeply. RSA has also been caught up in the scandal after it has been alleged that the NSA paid RSA $10 million to use a flawed pseudorandom number generator, named Dual_EC_DRGB in the BSafe crypto library, yet $10 million seems like a small drop in the $250 million that the NSA are reported to spend on working with Internet companies to gain back doors into encryption.

The dominance that the US has on the Internet has always shown with the great majority of major players within the space being US led, from Cisco through to Salesforce. The revelations that have come from the Edward Snowden's leaks have given light to the reality of US companies and their inner workings when dealing with the NSA.

While the consumer may simply shrug off the impeding destruction of their digital privacy, businesses are voting with their budgets, something that may cost not only US cloud companies, but also technology companies across the sector a great deal and something that is something that should not be taken for granted.

About the Author: Brian King is Digital Marketing Manager at Opsview, a network monitoring software firm.

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m bakarim I very much disagree with your initial premise. Anyone who care about their privacy, and the rights under the US Constitution, and the US Bill of Rights absolutely appreciates the efforts of Eric Snowden. The US intelligence agencies have undermined the entire internet and created a huge drive towards the balkanization of the web. We are going backwards thanks to unfettered trampling of our right to privacy and the protections from unreasonable search and seizure.

Smart people will vote with their wallets, and abandon any public internet activities, including social media and online banking. When the NSA can read and write any file on your mobile device or other computer -the internet can no longer be trusted for any business or other confidential purpose.
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