The NSA’s other victim: U.S. business competitiveness

This week, a review panel commissioned by the White House determined that the NSA needs reining in to prevent overreaching and damaging America. The day before the panel released its recommendations, a delegation of technology business leaders visited the White House to register its concerns about the NSA. Are the latter’s concerns purely patriotic? Clearly not.

The consequences of the unconstitutional overreach of the NSA and other parts of America’s security apparatus on American technology business are already being felt. Last week saw an investor lawsuit against IBM for its collaboration with the NSA, and it seems likely similar cases will follow as other technology companies, such as Microsoft, have also been found collaborating with the NSA. But far more serious is the destabilization of trust in these businesses.

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One element is the jurisdictional gravity imposed, as foreign customers are subjected to U.S. oversight. Another is the commitment of many American companies to proprietary solutions. When backdoors are suspected, the only recourse is to trust the word of the supplier since the source is closed. If that can’t be relied upon — either for ethical reasons or because the company is jurisdictionally subject to gagging orders — then customers will flee.

Who benefits from that concern? Companies in independent jurisdictions and companies working with open source software. Switzerland in particular seems to offer the same haven for the digital world that it’s traditionally offered the financial world. Swiss domain names cut the connection to U.S. control and give confidence that government interference in routing customers to one’s business is less likely. More significantly, cloud providers are now emphasizing the benefits of doing business in Switzerland.

Swiss cloud account

The problem with cloud computing, in a nutshell, is that the savings you gain from both scale and outsourced operation may come at a cost later in the cycle. Cloud solutions bring economies of scale achieved by grouping the needs of many different businesses into a common data center, which also means the minutiae of operations and the management of logistical and practical issues are outsourced. This is all good.

But the source of the benefits is also the source of the problems. The company you trade with has your needs not as its exclusive priority, but as one of many. In the end, if your needs become exceptional, letting you down will simply be part of their cost of doing business. Their jurisdiction gets added to your operating parameters as well. It’s no longer enough to understand the legal boundaries of trading in your own state; you now also have to take into account the consequences of your data being processed in your cloud provider’s state.

The state-owned telco SwissCom is offering a range of cloud offerings, all managed in and from Switzerland and marketed on the basis of avoiding NSA intrusion. While they admit to having little control over spying on their services from abroad, the insulation provided by Swiss law seems an important benefit.

It’s not just SwissCom who want to be the Switzerland of cloud. Open source developers at Kolab have similar aspirations. They have a better deal, too; their software is open source, so it’s not just lock-in by a different party. They are offering a full suite of productivity solutions equivalent to Google’s and Microsoft’s offerings — mail, calendar, file storage, and more — all hosted in and from Switzerland and implemented in open source software.

In addition to the confidence Swiss hosting instills, it’s also possible to take the same open source software the Swiss deploy and host it yourself if you prefer, so that in the event trust is lost you still have an alternative — you can rehost and carry on. That’s not true of services based on proprietary software. If you stop trusting the provider, you’ll need to migrate to a completely different solution.

These are just examples; there are more. The point is that the behavior of the NSA and other government agencies is damaging America’s reputation, undermining business opportunity, and creating opportunities abroad in areas that might be expected to be natural markets for U.S. leadership.

The impact of NSA intrusion on our civil liberties can’t be overstated, but the impact of this overreach on our technology businesses is serious, too. It’s time for change, both for our rights as citizens to be protected in the way the Constitution intends, and to rebuild the reputation of America as a source of trustworthy technology.

This article, “The NSA’s other victim: U.S. business competitiveness,” was originally published at InfoWorld.com. Read more of the Open Sources blog and follow the latest developments in open source at InfoWorld.com. For the latest business technology news, follow InfoWorld.com on Twitter.