How the NSA Revelations Impact Businesses

NSA spyingEdward Snowden’s big reveal about the NSA invading the privacy of individuals has thrown up a number of disturbing issues, not least of which is the feeling among ordinary people like us that Big Brother is really watching.

It is a violation of human rights to privacy, undoubtedly, but it also reveals the scale of control that is exercised over other nations and people. And, as this early discussion by Bloomberg contributing editor Richard Falkenroth shows the fallout of the reveals has been big even in the sphere of international relations and business.

Impact on Businesses

The discovery that the United States government has its eyes on you can have all sorts of repercussions on all types of businesses, small or large, in the US and across the world.


1. Rising Doubt: Business Data Is Not Safe With The Government

When you share important business data on the US government’s data hubs, you have to trust that these centers will keep your data safe. This data can be anything from website passwords, proprietary product recipes, trade secrets or billion dollars’ worth of research.

Some businesses spend a lot of money to protect their information from the prying eyes of competitors.

US tech companies like Apple, Yahoo and Google lead the world’s technology industries and thus far, have had the best security systems in place to protect the confidentiality of clients and users in their internal networks.

But the NSA leaks have made it clear that governments are constantly spying on each other and hacking into each others’ computers. If even Yahoo and Google servers were not safe from the US government’s surveillance teams, this means that your billion dollars’ worth of research can easily be accessed by international competitors if your government’s systems are hacked into.

The sense of the vulnerability of data shared on US data centers is bound to create a sense of doubt regarding whether you can trust the government to keep your data confidential and safe from global competitors.

There is certainly reason enough for such doubts. If a ‘high school dropout’ like Edward Snowden working alone was able to gain access to sensitive and top secret information, it is a foregone conclusion that your data is not safe from far more skilled hackers across the world. What does this mean for the security of your data in the future?


2. Growing Mistrust Of US Businesses and Tech Companies

The hacking of US tech and Internet giants has also revealed a web of lies that can have a great negative impact on the business world. These companies have claimed that they were not aware of the government’s surveillance activities, but later went on to retract their statements by saying that they were under orders to reveal millions of records from their internal servers on a daily basis. This has led to a growing mistrust among people of US tech companies. While that may not impact the regular Windows user or iPhone owner, if other countries are becoming vocal against the US tech industry, it becomes a big issue.

Cisco’s revenues have slumped as a result of the NSA leaks. The company says that ever since the leaks, orders in China and from other overseas customers have plummeted. Shareholders are also expressing their great discontent, with one IBM shareholder suing the company for failing to disclose the risks of cooperating with NSA’s spy program. Other Silicon Valley companies like AT&T and Verizon are also facing their shareholders’ wrath with investors similarly filing lawsuits against them.


3. Businesses Moving Away From Data Centers Ruled By US Laws

When you store data on a global server online, the laws of the location of the server apply rather than the laws of your country of residence. Cloud storage for frequent business travelers has been a much-lauded innovation. The idea behind it was to reduce the risk that business travelers face when they carry important data on hard drives that they are at the risk of losing during travel.

But more and more people are becoming wary of US data centers for cloud storage, because it is US laws that apply to data stored on such servers. As a result, companies like MacquarieTelecom are providing data storage in locations other than the US. The Australian government is a big client of the company’s local data centers which hope to help reduce cyber attacks against the government’s systems. More such companies are flourishing to meet the greater demand for cloud storage in locations outside of the US.

This MT’s video tries to depict current issue:

So, are the NSA leaks bad for business?

Yes. The fallout of the leaks is unfolding as we speak. It is clear that US businesses are suffering from a lack of trust, not only from customers but also from shareholders. The importance of trust in business is unarguable.

And global businesses that depend on US tech companies have also been losing out as a result. Since they can no longer trust the safety of their data, they have to look for alternate solutions. But there aren’t many of these yet, with US tech companies leading the field of security solutions.

And it is only a matter of time before smaller companies feel the trickle-down effect of the leaks. Businesses that have been spending loads of money to get their data secured are going to realize that there is little point in doing so if all of it ends up on a government hub that puts it beyond their control. The very idea of data security in our global world is at risk today.

Tech privacy concerns are already leading to big losses for IT companies across the world.

According to a Forrester Research analyst, if something is not done to restore confidence in data handling, the US technology industry could suffer losses of $180 billion by 2016.

Add to that the fact that we are living in an increasingly connected world and like me, ordinary people are starting to wonder how private our social media interactions really are. The media has not been laudatory of Edward Snowden, but it is clear to a layman like me that the powers he is working for are the monsters here.

One disturbing question that clearly arises from Snowden’s role in the whole fiasco is how was a man who was so unqualified allowed access to such sensitive information?

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