Subscribe / Unsubscribe Enewsletters | Login | Register

Pencil Banner

U.S. surveillance programs are killing the tech industry

Rob Enderle | June 16, 2015
The Information Technology & Innovation Foundation, ranked as the most authoritative science and technology think tank in the U.S. (second in the world behind Max Planck Institutes of Germany), has just released its latest report on the impact of the existence and disclosure of the broad NSA national and international spying programs.

The Information Technology & Innovation Foundation, ranked as the most authoritative science and technology think tank in the U.S. (second in the world behind Max Planck Institutes of Germany), has just released its latest report on the impact of the existence and disclosure of the broad NSA national and international spying programs.

It was initially reported that the revenue loss range would be between $21.5 billion and $35 billion, mostly affecting U.S. cloud service providers. However, they have gone back and researched the impact and found it to be both far larger and far broader than originally estimated. In fact, it appears the surveillance programs could cause a number of U.S. technology firms to fail outright or to be forced into bankruptcy as they reorganize for survival. The damage has also since spread to domestic aerospace and telephony service providers.

The programs identified in the report are PRISM; the program authorized by the FISA Amendments act, which allowed search without the need for a warrant domestically and abroad, and Bullrun; the program designed to compromise encryption technology worldwide.

The report ends in the following recommendations:

The 2014 survey indicates that 25 percent of companies in the UK and Canada plan to pull data out of the U.S. Of those responding, 82 percent indicated they now look at national laws as the major deciding factor with regard to where they put their data.

Software-as-a-Service (SaaS) company Birst indicated that its European customers are refusing to host information in the U.S. for fear of spying.

Salesforce, another SaaS company, revealed that its German insurance client pulled out of using the firm. Due to the backlash from the NSA disclosures, Salesforce has reported a total loss to date of $124 million.

Cisco, the U.S. firm that leads the networking market, reported that sales was interrupted in Brazil, China and Russia as a result of the belief that the U.S. had placed backdoors in its networking products.   Cisco's CEO, John Chambers, tied his revenue shortfall to the NSA disclosure.

Servint, a U.S. Web Hosting company, reported losing half of its international clients as a result of the NSA Disclosure.

Qualcomm, IBM, Microsoft and Hewlett-Packard have all reported significant adverse revenue impact in China from the NSA disclosure.

A variety of U.S. companies including Cisco, McAfee/Intel, Apple and Citrix Systems were all dropped from the approved list for the Chinese government as a result of the NSA disclosure.

But it is not even just tech companies that have lost significant customers and revenues. Boeing lost a major defense contract to Saab AB to replace Brazil's aging fighter jets due to the disclosure.

 

1  2  Next Page 

Sign up for CIO Asia eNewsletters.