With all the buyouts going on, our capitalist world must be teeming with spies

Apr 6, 2014 14:16 GMT  ·  By

Security isn’t the area I cover in my articles, usually, but it was inevitable, in my far-reaching roamings across the tech industry, that I would eventually stroll through that troublesome and, let’s face it, at times mind-boggling field.

But this time I’m not talking about data encryption, or anything to do with the safety of files stores on hard drives, or flash drives or solid state ones.

Well, technically it does have something to do with that, but only peripherally. What really got me thinking was the possibility that Lenovo wouldn’t be allowed to buy IBM’s server business.

A while ago, IBM decided that it wanted to offload its low-end server unit on someone, and Lenovo, ever the growing tech company, came forward to make a bid, quickly securing the contract.

Only it didn’t get permission to finish the transaction, because it’s a foreign company. More specifically, it is a Chinese company.

During the past, and especially during recent years, several scandals arose about alleged spying conducted by China on various corporate and government entities from the US and other countries.

And since Lenovo is based in China, and also experienced a stupefyingly rapid growth (it came from nothing to top PC maker on part with HP in just half a decade), the firm is under suspicion.

Sure, no one actually said it that way. Official documents are a too impersonal for that, and Lenovo and IBM both said they fully expect the deal to be allowed through. Nevertheless, the Interagency Committee on Foreign Investment in the US has blocked the buyout for now.

The facts

IBM provides servers to many corporate and government customers, most notably the Pentagon, the FBI and various telecoms.

Obviously, those three entities, or groups of entities, are the ones that manage and monitor all communications in the US.

IBM also provides product support to all the servers it sells. Sure, each customer has its own team of engineers and network administrators, but ultimately IBM still has access and a responsibility to maintain the hardware until the warranty expires.

Once Lenovo buys IBM’s server business unit, it will gain those rights and responsibilities

The danger

Since Lenovo is a Chinese company, it’s believed that the deal could endanger national security. The concerns would have probably come to the fore even if the company was stationed elsewhere, but China’s (alleged) cyberwarfare attempts make this deal a more obvious target.

But that might be all there is to say here: that the danger is more obvious. Not bigger, not closer and possibly no more likely to inflict national security harm than every other buyout out there.

Sure, since this is about servers, Lenovo could gain backdoors into the information enabled and monitors by all the telecoms we mentioned, not to mention the FBI and the Pentagon. It’s why the Interagency Committee on Foreign Investment is combing through it right now.

But the fact is that it’s very likely that international security, at least in terms of communications, has already been compromised beyond repair.

After all, many buyouts happened, employees are always shuffled around, and regardless of where the headquarters of a company is, the ones whose board of directors and CEOs are of different nationalities are a dime a dozen.

Take Samsung for example: it’s well known everywhere, it has facilities and/or client manufacturers in Taiwan, it has fabs in China and customers all over the world, but it’s a South Korean company. And it owns a whole bunch of US branches and business units. LG is almost a mirror image in that regard.

Sony is Japanese, but mirrors Samsung in terms of everything else, and the list goes on and on.

Sure, this time it’s more sensitive because of the nature of servers and how debilitating a backdoor in them could be. Nevertheless, it’s more than likely that the entire corporate world is teeming with spies anyway.

The current situation

The concerns of the Interagency Committee on Foreign Investment are probably very valid, but the deal will probably go through. From what I hear, an amendment was made, forcing IBM to keep providing, for five years, support for the servers even after it has divested itself of the business subdivision. The Pentagon/FBI/Telecoms often upgrade their systems at such intervals.

I’m not sure it will really do more than delay the issue though. What I’m interested in is to see who they’ll buy servers from if not Lenovo.

In the meantime, the NSA and the intelligence organizations of all other nations will doubtlessly continue the cyberwarfare activities that they keep out of the sight of the common man. The most ironic part is that, years from now, if Lenovo does get pegged as a Chinese spy, everything will be officially denied but unofficially described as a “response” to everything the NSA has been doing.