Research Question: Have government privacy and security issues with the NSA created long-term problems for American technology companies doing business outside the United States?
Companies Covered: IBM (IBM), Cisco (CSCO), Google (GOOG), Microsoft (MSFT), Yahoo (YHOO), Facebook (FB), Apple (AAPL), Intel (INTC), Symantec Corp. (SYMC), Salesforce (CRM)
Report Available: February 19, 2014
Blueshift’s initial research shows NSA leaks could cost tech companies a large portion of their international business and create long-term problems without transparency from the government, but President Obama’s revamping of NSA’s surveillance could ease the tension if executed correctly.
- In 2013, Edward Snowden leaked documents that indicated the NSA tapped fiber-optic cables abroad, circumvented or cracked encryption and is massively collecting telephone records and Internet traffic. Additionally, the NSA monitors thousands of offline computers each day, collects cellphone location data, and is gathering more than 200 million text messages each day, leading to distrust in the government security measures from consumers, companies, and international businesses, among others.
- Large technology-based companies, like Google, that conduct increasingly large portions of their business internationally, are already expressing the detrimental effect that the NSA could have on its international business. Cisco, Symantec, Intel, and other tech giants are at risk of losing sales of $180 billion, or 25% of information and technology services, by 2016 due to the damage caused by NSA spying, with Cisco already being feeling the effects. In response to the negative impact the NSA is having, Microsoft is offering overseas data storage to customers in foreign countries to help retain customer loyalty and trust. Additionally, Yahoo, Salesforce, Cisco, and BT Group are all calling for transparency from the NSA, so clients can regain trust in each respective company.
- After the immense backlash from the NSA leaks, President Obama called for a reworking of the NSA’s surveillance, and will find a way to end the government’s role in collecting Americans’ phone records by transferring control of the massive database. Some officials are skeptical if this will be possible since telephone companies do not want this responsibility.
To gain insight into the effects of the NSA spying program on tech giants’ international business, Blueshift will gather data and issue a market research report from independent sources in the following areas: large tech companies, data center operators, IT consultants, cybersecurity professionals, hardware and software supply chain, attorneys specializing in data security contracts, government officials, and industry specialists.
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