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</o:shapelayout></xml><![endif]--></head><body bgcolor=white lang=EN-US link=blue vlink=purple><div class=WordSection1><p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D'>Fascinating… It is only in the area of Internet Governance that there seems to be an unquestioned trust in the actions and motivations of relevant “stakeholders” and particularly the USG and the major US Internet corporations. I wonder why, and particularly for Civil Society who in other spheres is rather more critical and skeptical?<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D'>M<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D'><o:p> </o:p></span></p><div><div style='border:none;border-top:solid #B5C4DF 1.0pt;padding:3.0pt 0in 0in 0in'><p class=MsoNormal><b><span style='font-size:10.0pt;font-family:"Tahoma","sans-serif"'>From:</span></b><span style='font-size:10.0pt;font-family:"Tahoma","sans-serif"'> Ottawadissenters@yahoogroups.com [mailto:Ottawadissenters@yahoogroups.com] <b>On Behalf Of </b>Arthur Cordell<br><b>Sent:</b> Friday, March 21, 2014 10:20 AM<br><b>To:</b> Ottawadissenters@yahoogroups.com; futurework@vancouvercommunity.net<br><b>Subject:</b> [Ottawadissenters] Snowden and US tech companies<o:p></o:p></span></p></div></div><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal> <o:p></o:p></p><div id=ygrp-mlmsg><div id=ygrp-msg><div id=ygrp-text><div><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><b><span lang=EN style='font-size:14.0pt;color:black'>Revelations of N.S.A. Spying Cost U.S. Tech Companies</span></b><o:p></o:p></p><div style='border:none;border-top:solid #0A0A0A 1.0pt;padding:10.0pt 0in 0in 0in'><ul type=disc><li class=MsoNormal style='color:#0A0A0A;mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;mso-list:l1 level1 lfo1'><span lang=EN>by Claire Cain Miller NYTimes</span><o:p></o:p></li><li class=MsoNormal style='color:#0A0A0A;mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;mso-list:l1 level1 lfo1'><span lang=EN>March 21, 2014 </span><o:p></o:p></li></ul></div><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span lang=EN style='color:black'>• </span><o:p></o:p></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span lang=EN style='color:black'>SAN FRANCISCO — Microsoft has lost customers, including the government of Brazil.</span><o:p></o:p></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><b><span lang=EN style='color:black'>IBM is spending more than a billion dollars to build data centers overseas to reassure foreign customers that their information is safe from prying eyes in the United States government</span></b><span lang=EN style='color:black'>.</span><o:p></o:p></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><b><span lang=EN style='color:black'>And tech companies abroad, from Europe to South America, say they are gaining customers that are shunning United States providers, suspicious because of the revelations by Edward J. Snowden that tied these providers to the <a href="http://topics.nytimes.com/top/reference/timestopics/organizations/n/national_security_agency/index.html?inline=nyt-org" title="More articles about National Security Agency, U.S."><span style='color:#000088;text-decoration:none'>National Security Agency</span></a>’s vast surveillance program</span></b><span lang=EN style='color:black'>. </span><o:p></o:p></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span lang=EN style='color:black'>Even as Washington grapples with the diplomatic and political fallout of Mr. Snowden’s leaks, the more urgent issue, companies and analysts say, is economic. Tech executives, including Eric E. Schmidt of Google and Mark Zuckerberg of Facebook, are expected to raise the issue when they return to the White House on Friday for a meeting with President Obama. </span><o:p></o:p></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><b><span lang=EN style='color:black'>It is impossible to see now the full economic ramifications of the spying disclosures— in part because most companies are locked in multiyear contracts — but the pieces are beginning to add up as businesses question the trustworthiness of American technology products. </span></b><o:p></o:p></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span lang=EN style='color:black'>Meanwhile, the <a href="http://www.nytimes.com/2014/03/11/world/admiral-set-to-face-confirmation-to-lead-nsa.html" title="Times story on the nominee. "><span style='color:#000088;text-decoration:none'>confirmation hearing</span></a> last week for the new N.S.A. chief, the <a href="http://bits.blogs.nytimes.com/2014/03/10/at-sxsw-snowden-speaks-about-n-s-a-spying/" title="Times story on the Snowden talk. "><span style='color:#000088;text-decoration:none'>video appearance of Mr. Snowden</span></a> at a technology conference in Texas and the drip of new details about government spying have kept attention focused on an issue that many tech executives have hoped would go away.</span><o:p></o:p></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><b><span lang=EN style='color:black'>Despite the tech companies’ assertions that they provide information on their customers only when required under law — and not knowingly through a back door — the perception that they enabled the spying program has lingered.</span></b><o:p></o:p></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><b><span lang=EN style='color:black'>“It’s clear to every single tech company that this is affecting their bottom line,” said Daniel Castro, a senior analyst at the Information Technology and Innovation Foundation, who predicted that the United States cloud computing industry could <a href="http://www.itif.org/publications/how-much-will-prism-cost-us-cloud-computing-industry" title="ITIF report. "><span style='color:#000088;text-decoration:none'>lose $35 billion by 2016</span></a>.</span></b><o:p></o:p></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><b><span lang=EN style='color:black'>Forrester Research, a technology research firm, said the losses could be <a href="http://blogs.forrester.com/james_staten/13-08-14-the_cost_of_prism_will_be_larger_than_itif_projects" title="Forrester report. "><span style='color:#000088;text-decoration:none'>as high as $180 billion</span></a>, or 25 percent of industry revenue, based on the size of the cloud computing, web hosting and outsourcing markets and the worst-case scenario for damages. </span></b><o:p></o:p></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span lang=EN style='color:black'>The business effect of the disclosures about the N.S.A. is felt most in the daily conversations between tech companies with products to pitch and their wary customers. The topic of surveillance, which rarely came up before, is now “the new normal” in these conversations, as one tech company executive described it. </span><o:p></o:p></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span lang=EN style='color:black'>“We’re hearing from customers, especially global enterprise customers, that they care more than ever about where their content is stored and how it is used and secured,” said John E. Frank, deputy general counsel at Microsoft, which has been publicizing that it allows customers to store their data in Microsoft data centers in certain countries. </span><o:p></o:p></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span lang=EN style='color:black'>At the same time, Mr. Castro said, companies believe the federal government is only making a bad situation worse.</span><o:p></o:p></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span lang=EN style='color:black'>“Most of the companies in this space are very frustrated because there hasn’t been any kind of response that’s made it so they can go back to their customers and say, ‘See, this is what’s different now, you can trust us again,’ ” he said.</span><o:p></o:p></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span lang=EN style='color:black'>In some cases, that has meant forgoing potential revenue. </span><o:p></o:p></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span lang=EN style='color:black'>Though it is hard to quantify missed opportunities, American businesses are being left off some requests for proposals from foreign customers that previously would have included them, said James Staten, a cloud computing analyst at Forrester who has read clients’ requests for proposals. There are German companies, Mr. Staten said, “explicitly not inviting certain American companies to join.”</span><o:p></o:p></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span lang=EN style='color:black'>He added, “It’s like, ‘Well, the very best vendor to do this is IBM and you didn’t invite them.’ ” </span><o:p></o:p></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><b><span lang=EN style='color:black'>The result has been a boon for foreign companies</span></b><span lang=EN style='color:black'>. </span><o:p></o:p></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span lang=EN style='color:black'>Runbox, a Norwegian email service that markets itself as an alternative to American services like Gmail and says it does not comply with foreign court orders seeking personal information, reported a 34 percent annual increase in customers after news of the N.S.A. surveillance. </span><o:p></o:p></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span lang=EN style='color:black'>Brazil and the European Union, which had used American undersea cables for intercontinental communication, last month decided to build their own cables between Brazil and Portugal, and gave the contract to Brazilian and Spanish companies. Brazil also announced plans to abandon Microsoft Outlook for its own email system that uses Brazilian data centers.</span><o:p></o:p></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span lang=EN style='color:black'>Mark J. Barrenechea, chief executive of OpenText, Canada’s largest software company, said an anti-American attitude took root after the passage of the <a href="http://topics.nytimes.com/top/reference/timestopics/subjects/u/usa_patriot_act/index.html?inline=nyt-classifier" title="More articles about the USA Patriot Act."><span style='color:#000088;text-decoration:none'>Patriot Act</span></a>, the counterterrorism law passed after 9/11 that expanded the government’s surveillance powers. </span><o:p></o:p></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span lang=EN style='color:black'>But “the volume of the discussion has risen significantly post-Snowden,” he said. For instance, after the N.S.A. surveillance was revealed, one of OpenText’s clients, a global steel manufacturer based in Britain, demanded that its data not cross United States borders.</span><o:p></o:p></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><b><span lang=EN style='color:black'>“Issues like privacy are more important than finding the cheapest price,” said Matthias Kunisch, a German software executive who spurned United States cloud computing providers for Deutsche Telekom. “Because of Snowden, our customers have the perception that American companies have connections to the N.S.A.” </span></b><o:p></o:p></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span lang=EN style='color:black'>Security analysts say that ultimately the fallout from Mr. Snowden’s revelations could mimic what happened to Huawei, the Chinese software company, which was forced to abandon major acquisitions and contracts when American lawmakers claimed that the company’s products contained a backdoor for the People’s Liberation Army of China — even though this claim was never definitively verified. </span><o:p></o:p></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span lang=EN style='color:black'>Silicon Valley companies have complained to government officials that their actions were hurting their business. But companies clam up when it comes to specifics about economic harm, whether to avoid frightening shareholders or because it is too early to produce concrete evidence. </span><o:p></o:p></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span lang=EN style='color:black'>“The companies need to keep the priority on the government to do something about it, but they don’t have the evidence to go to the government and say billions of dollars are not coming to this country,” Mr. Staten said. </span><o:p></o:p></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span lang=EN style='color:black'>Some American companies say the business hit has been minor at most. </span><o:p></o:p></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span lang=EN style='color:black'>John T. Chambers, the chief executive of Cisco Systems, said in an interview that the N.S.A. disclosures had not affected Cisco’s sales “in a major way.” Although deals in Europe and Asia have been slower to close, he said, they are still being completed — an experience echoed by several other computing companies. </span><o:p></o:p></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><b><span lang=EN style='color:black'>Still, the business blowback can be felt in other ways than lost customers.</span></b><o:p></o:p></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><b><span lang=EN style='color:black'>Security analysts say tech companies have collectively spent millions and possibly billions of dollars <a href="http://www.nytimes.com/2013/11/01/technology/angry-over-us-surveillance-tech-giants-bolster-defenses.html" title="Times story on tech company encryption. "><span style='color:#000088;text-decoration:none'>adding state-of-the-art encryption features</span></a> to consumer services, like Google search and Microsoft Outlook, and to the cables that link data centers at Google, Yahoo and other companies. </span></b><o:p></o:p></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span lang=EN style='color:black'>IBM said in January that it would spend $1.2 billion to build 15 new data centers, including in London, Hong Kong and Sydney, to lure foreign customers that are sensitive about the location of their data. Salesforce.com announced similar plans this month. </span><o:p></o:p></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><b><span lang=EN style='color:black'>Meanwhile, lawmakers, including in Germany, are considering legislation that would make it costly or even technically impossible for American tech companies to operate inside their borders. </span></b><o:p></o:p></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><b><span lang=EN style='color:black'>Some government officials say laws like this could have a motive other than protecting privacy. Shutting out American companies “means more business for local companies,” Richard A. Clarke, a former White House counterterrorism adviser, said last month.</span></b><o:p></o:p></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><b><span lang=EN style='font-size:24.0pt;color:black'>Original URL:</span></b><o:p></o:p></p><p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span lang=EN style='color:black'><a href="http://www.nytimes.com/2014/03/22/business/fallout-from-snowden-hurting-bottom-line-of-tech-companies.html?emc=edit_tu_20140321&nl=technology&nlid=4223025&_r=0">http://www.nytimes.com/2014/03/22/business/fallout-from-snowden-hurting-bottom-line-of-tech-companies.html?emc=edit_tu_20140321&nl=technology&nlid=4223025&_r=0</a></span><o:p></o:p></p><p class=MsoNormal align=center style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center'><span lang=EN style='color:black'><a href="https://www.readability.com/recommendations/new/article/m74xqky7" title="Recommend this article"><span style='text-decoration:none'>Recommend </span></a><a href="https://www.readability.com/articles/m74xqky7#flyout-share-export" title="Share or export this article"><span style='text-decoration:none'>Share/export </span></a></span><o:p></o:p></p><p class=MsoNormal align=center style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:center'><span lang=EN style='font-size:8.5pt;color:black'>Did this article display correctly? 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