Cisco's NSA Problem Is Going To Whack All Of US Tech's Growth Plans - ZDNet

[WillyT]

Cisco's NSA problem is going to whack all of US tech's growth plans
Summary: Will emerging markets really buy routers, servers and storage systems from US enterprise tech giants now that it's obvious the NSA intercepts them en route to install spying gear?
Larry Dignan - ZDNet
May 15, 2014 -- 14:25 GMT (07:25 PDT)

<snip>

Cisco's emerging markets business---the engine for the networking giant's future growth---continues to take a hit and that situation isn't likely to change now that it's common knowledge that the NSA has been intercepting routers---and other IT gear---in the supply chain so it can install call-home beacons.

These "upgrade" stations, which have generated a good bit of chatter, were revealed in Glenn Greenwald's book No Place to Hide. You can find the docs supporting Greenwald's book on his site even though links to the actual source information are hard to come by in the tech press.

According to the leaked docs, the NSA was really pleased with itself because it could intercept packages.



Cisco's general counsel Mark Chandler reiterated the U.S. government has overreached and shouldn't interfere with deliveries.

Chandler wrote:

We comply with US laws, like those of many other countries, which limit exports to certain customers and destinations; we ought to be able to count on the government to then not interfere with the lawful delivery of our products in the form in which we have manufactured them. To do otherwise, and to violate legitimate privacy rights of individuals and institutions around the world, undermines confidence in our industry.

...undermines confidence in our industry

More: http://www.zdnet.com/ciscos-nsa-problem-is-going-to-whack-all-of-us-techs-growth-plans-7000029495/

[villager]

1. Most of those here who've been buffaloed into "panic defenses" of the NSA can't afford to care

Though I suppose if their livelihoods depend on selling tech hardware, they might...

[WillyT]

2. Yep... People Are Looking Elsewhere...

We developed the Internet... now, other countries are thinking about doing the same...

Because they don't trust us anymore.

Can't say I blame them.

[Xithras]

3. What it will do is encourage drop shipping.

Hardware will go from Cisco's manufacturing plants (Mexico, China, Czech Republic, IIRC) directly to the overseas clients. This kind of behavior simply encourages U.S. companies to keep their inventory out of the United States entirely (bye bye warehouse and distribution jobs) and keep their distribution channels as internationalized as possible. In theory, if they can keep the product out of the U.S., Cisco's equipment should pose no more risk for their customers than any other manufacturers devices.

At that point, the only real hurdle is image. I'm sure that Cisco, with its billions and billions of dollars of yearly profit, can put together some effective media campaigns.

The real victims of the spying aren't the hardware companies like Cisco that can route around the country, but the software and cloud services people who can't. I work in this business, and I know that most providers are already seeing business losses over it. My own employer has had contracts from overseas clients cancelled because they no longer trust Americans to access their systems. It was a sad day when one of our former financial services clients in Singapore bluntly told us that they were no longer allowed to give Americans remote access to their systems...and that they'd given our contract to a company from Russia. Apparently, the Russian's are considered to be more trustworthy.

[WillyT]

4. Thank You For That !!!

[Demo_Chris]

8. Interesting post, though would it not be easier to buy a non-US product?

And really, at this point given what we know, can we not assume these manufacturers are installing this stuff for the NSA right in the factory?

[WillyT]

5. Kick !!!

[nashville_brook]

6. k and r

[grahamhgreen]

7. Kick!

[KoKo]

9. Recommend... NSA and Spying is a subject that

just get's the "nothing to see here, move along" or "ignore" and it will all go away.

I don't know why that is. It can't just be that folks think it makes Obama look bad. There's got to be more to it than that. But, what?