Feeds

Microsoft: NSA security fallout 'getting worse' ... 'not blowing over'

'Double-digit declines in people's trust in American tech companies' is bad for business

Bridging the IT gap between rising business demands and ageing tools

Microsoft's top lawyer says the fallout of the NSA spying scandal is "getting worse," and carries grim implications for US tech companies.

In a speech at the GigaOm Structure conference in San Francisco on Thursday, Microsoft general counsel Brad Smith warned attendees that unless the US political establishment figures out how to rein in its spy agencies, there could be heavy repercussions for tech companies

"What we've seen since last June is a double-digit decline in people's trust in American tech companies in key places like Brussels and Berlin and Brasilia. This has put trust at risk," Smith said.

"The longer we wait or the less we do the worse the problem becomes," he explained. "We are seeing other governments consider new procurement rules – procurement rules that could effectively freeze out US-based companies."

This could already be happening. China banned Microsoft's Windows 8 operating system from a recent public sector procurement contract. Two weeks later, a report by the Middle Kingdom's state-backed media quoted Chinese analysts and academics warning of the dangers of using Windows 8. "It's a big challenge for our cybersecurity," said one academic.

The Chinese government is also rumored to be considering a ban on IBM servers as well, due to security issues.

If the US government does not work to clear up the rules around how it intercepts data both at home and abroad, how deeply its spy agencies penetrate tech from its domestic companies, and how it accesses overseas data held by American companies, then there's a real danger that US companies could suffer, Smith implied.

"Last fall people in Washington, including at the White House and Congress, had a view that this was an issue that needed to be addressed but might blow over. ... it is not blowing over ... in June of 2014 it is clear it is getting worse not better," he said.

"I do believe if we don't have a world where governments respect each other's world we're instead going to have a world where governments are tempted to keep American providers out," he said. Since the NSA revelations occurred, networking giant Cisco has seen quarter-on-quarter declines in its business in China, for example.

"I just think that one of the fundamental prerequisites for being in the cloud business is you must offer services that people trust," Smith said. El Reg is sure our readers would agree. Virtualization company VMware has a different view: one of its top executives argued yesterday that "the concerns around data privacy will massively accelerate public cloud," because big tech companies have the resources to properly secure data.

Microsoft's point seems to be that even if a company has the best security practices in the world, that won't help it if its equipment has been compromised by a spy agency, or if it's ordered by a secret court to hand over data and not tell anyone about it. ®

Build a business case: developing custom apps

More from The Register

next story
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
iPad? More like iFAD: We reveal why Apple ran off to IBM
But never fear fanbois, you're still lapping up iPhones, Macs
Nadella: Apps must run on ALL WINDOWS – PCs, slabs and mobes
Phone egg, meet desktop chicken - your mother
HP, Microsoft prove it again: Big Business doesn't create jobs
SMEs get lip service - what they need is dinner at the Club
ITC: Seagate and LSI can infringe Realtek patents because Realtek isn't in the US
Land of the (get off scot) free, when it's a foreign owner
Samsung threatens to cut ties with supplier over child labour allegations
Vows to uphold 'zero tolerance' policy on underage workers
Dude, you're getting a Dell – with BITCOIN: IT giant slurps cryptocash
1. Buy PC with Bitcoin. 2. Mine more coins. 3. Goto step 1
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
prev story

Whitepapers

Seven Steps to Software Security
Seven practical steps you can begin to take today to secure your applications and prevent the damages a successful cyber-attack can cause.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
Build a business case: developing custom apps
Learn how to maximize the value of custom applications by accelerating and simplifying their development.
Consolidation: the foundation for IT and business transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.