Has the ‘worm’ finally turned in the US?
Facebook, Google, Apple, Yahoo, Microsoft and AOL have sent an open letter in which they state that they
believe that government surveillance practices should also be reformed to include substantial enhancements to privacy protections and appropriate oversight and accountability mechanisms for those programs.
we welcome the debate about how to protect both national security and privacy interests and we applaud the sponsors of the USA Freedom Act for making an important contribution to this discussion.
So, is this a sign of the worm is turning and joining the public concern, or it is more a case of the bottom line is actually being hit by people, companies and even whole countries changing their purchasing because of the concerns over U.S. secret surveillance.
Cisco has already reported that it’s sales in China fell 18 percent year-over-year in the last fiscal quarter, as the Chinese government and companies now have more reason to trust domestic vendors. With Chinese state-owned telecom operators reportedly having already stopped orders for certain U.S. equipment to power their networks. In place of the US equipment, the operators are relying on Chinese vendors such as Huawei Technologies, to supply their telecommunications equipment.
However, with the normal “tit for tat” that governments play with international relations, this could just be retaliation to the fact last year Huawei and ZTE were hit by U.S. lawmakers concerned with the two companies’ alleged ties to the Chinese government. A Congressional panel eventually advised that U.S. firms to buy networking gear from other vendors, calling Huawei and ZTE a security threat.
With other U.S. tech vendors, such as Hewlett-Packard and IBM, also reporting a slowdown in their China sales it’s just adding more ‘mud in the water’, so there isn’t a clear picture as yet of what is going on. Some analysts believe that since Chinese President Xi Jinping, took power last November, authorities have been leading anti-corruption investigations against local officials, which has included the scrutiny of government purchases; which in turn has resulted in the decline of IT purchases in recent months.
Meanwhile, China’s local tech vendors continue to grow more competitive, putting more pressure on their foreign rivals, and lessening the need for U.S. Tech. products.