14 DAY TRIAL // Over the past five months, many academic voices argued about what effect, if any, the NSA scandal would have on the American tech industry. Some said that things would not change, while others had grim predictions.
Well, it seems like the latter were closer to the truth. According to a report from Reuters, Cisco Systems Inc. and IBM Corp are already facing difficulties in selling their goods in countries such as China.
Financial estimates indicate that Cisco will have a 10 percent drop in revenue this quarter, a trend that will continue throughout 2014. To blame for their issues seem to be, at least in part, the NSA revelations.
IBM too reported a 22 percent drop in China revenue, which hurt its overall figure by 4 percent during the third quarter.
While Google’s revenues haven’t suffered following the NSA revelations, it doesn’t mean things are going to stay this way forever. The fact that the company fears the effects of the trust issues customers have was obvious during a testimony a Google exec gave in front of the US Congress.
There, Google stated that the NSA scandal doesn’t just affect the freedom and trust of the citizens, but also has a negative impact on the economic growth of the country. “This is a very real business issue, but it is also a very real issue for the people who are considering using the cloud and for those who currently use the cloud and may have their trust in it rocked by the disclosures,” Google’s Richard Salgado said.
Previous reports also indicated that the cloud business of American companies would be the ones to take the biggest hit, especially as numerous competitors in Europe are just waiting for an opportunity to snag more customers. It’s a little too early to figure out how big the losses will be, but the snowball is already inching down the slope.