Are technology companies in the United States now suffering from a slow and agonizing death? In what is being called “The Snowden Effect,” the infamous former National Security Agency contractor’s disclosures revealing the extent of NSA worldwide spying efforts have prompted companies to avoid or leave US technology firms in droves. This has been especially true with regard to US-based cloud services since it was realized that most of the largest US tech companies’ cloud computing systems have had their data accessed by the NSA. This revelation has caused approximately a ten percent drop in customers from cancelled contracts, according to a survey from industry group Cloud Security Alliance. Some argue that that President Barack Obama has added fuel to the fire of tech industry problems by emphasizing how the NSA surveillance program focuses on people outside of the United States. One of the biggest problems that plague these US companies is the perception that they are giving their data directly to the NSA.
“How bad is it?” you might ask. Well, consider that companies like Google, Apple, Microsoft, Yahoo, Facebook, IBM, Hewlett-Packard, and Oracle, to name just a few, are all facing losses of billions of dollars over the next few years as a result of the NSA’s activities. The Information Technology & Innovation Foundation (ITIF) recently published a report stating that many industries as a whole could lose up to $180 billion by 2016 as a result of the debacle. Put frankly, people and companies will not use technology they don’t trust, and the United States has violently shaken the trust of the people and companies of the world.
I think we are seeing just the beginning of the problems for US tech companies, as they scramble to find a way to restore trust in their products and services. Almost all major companies are now starting to implement end-to-end encryption in an attempt to thwart NSA surveillance techniques and technology. Unfortunately for these companies, all they can hope for is to present a good façade, since the Patriot Act forces US companies to submit their data when presented with secret court orders. So, if the NSA is unable to hack or penetrate any company’s systems, it can get what it needs via court order.
The sad part of this, at least my own personal opinion, is that I cannot believe or accept the idea that the United States is the only country that has the power and technological capabilities to harvest the Internet this way. I am fairly confident that almost all major governments, from China and Russia to the United Kingdom, France, and Spain, to name a few, have the capability to do some, if not most, of the same kind of surveillance themselves. With that thought in your mind, are the companies that are leaving the United States and seeking services in other countries just jumping from one proverbial fire and into another? When you think about it, the thing that has hurt the United States the most is simply the fact that it got caught. I am sure other countries went into crisis mode in an attempt to make sure they were not the next country outed.
In my humble opinion, Pandora’s box has been opened. I am not sure there is any way to put the genie back in the bottle. The curtain has been opened, and now we have all had a good look at what lies behind it, for any world power.
Originally Posted on The Virtualization Practice.