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3/17/2014
03:26 PM
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IBM: We'll Stand Up To NSA

IBM denies sharing customer information with U.S. government, asserts it would challenge any data demands through "judicial action or other means."

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IBM denies sharing customer data with the U.S. government and says it would challenge any demands for information through "judicial action or other means."

IBM on Friday issued an open letter to its clients assuring them that it has not relinquished customer data to the U.S. government and it pointedly said it will do whatever is necessary to protect such data and notify customers of any government requests.

The letter was issued soon after the Intercept News Site reported last week that that classified documents pilfered by former NSA contractor Edward Snowden showed that the NSA had built technology to automatically infect "potentially millions of computers" around the world with malware in order for the agency to glean data from foreign Internet and phone networks.

[Want more on the fallout on NSA spying? Read NSA Denies Impersonating Facebook To Serve Malware.]

"Our business model sets us apart from many of the companies that have been associated with the surveillance programs that have been disclosed," stated IBM senior VP, legal and regulatory affairs, Robert C. Weber, in the open letter, alluding to NSA's Prism program and other data-collection initiatives. "Unlike those companies, IBM’s primary business does not involve providing telephone or Internet-based communication services to the general public."

As a business that provides services to corporations and other enterprise customers, IBM said its customer relationships are governed by contracts. Even in cases where IBM has access to individual communications through use of customer infrastructure, that data is owned by the client.

"If a government wants access to data held by IBM on behalf of an enterprise client, we would expect that government to deal directly with that client," wrote Weber. And if the U.S. government were to serve a national security order on IBM to obtain client data and impose a gag order prohibiting IBM from notifying that client, "IBM will take appropriate steps to challenge the gag order through judicial action or other means."

Despite its protests of innocence, IBM as well as other U.S.-based businesses are to be suffering serious business consequences as a result of the NSA Prism scandal. In November, The Center for Strategic Studies in Washington D.C. alleged that China is retaliating for U.S. government surveillance programs by curbing purchases from IBM, Cisco Systems, Microsoft, and other U.S. tech firms. IBM's sales in China declined by 23% in 2013, contributing to a 5% overall decline in revenues for the year.

In December the Louisiana Sheriffs' Pension & Relief Fund, which is heavily invested in IBM stock, sued the company accusing it of concealing ties to the spying scandal that hit business in China and ultimately led to a $12 billion drop in the company's stock value.

Concluding his letter, Weber challenged the U.S. government to have "robust debate" on surveillance reforms including new transparency provisions that would expose the scope of intelligence programs and data collected. He also called on all governments not to find ways around encryption technology intended to protect business data. Last week NSA whistleblower Snowden called encryption the last, best defense against "the dark arts in the digital realm."

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Doug Henschen is Executive Editor of InformationWeek, where he covers the intersection of enterprise applications with information management, business intelligence, big data and analytics. He previously served as editor in chief of Intelligent Enterprise, editor in chief of ... View Full Bio

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D. Henschen
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D. Henschen,
User Rank: Author
3/17/2014 | 6:06:55 PM
If you don't buy our servers, we won't buy yours.
The other reason the Center for Strategic Studies suspects U.S. manufacturers are being punished by the Chinese is Washington's refusal to buy goods from China's Huawei Technologies. The U.S. government says this telecommunications equipment maker is a threat to national security because of its links to the Chinese military. The fear is you'll buy a Huawei server and introduce a secret gateway to snooping from foreign shores. What a fine mess we're all in due to these rampant "dark digital arts."
Brian.Dean
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Brian.Dean,
User Rank: Ninja
3/18/2014 | 1:52:41 AM
Re: If you don't buy our servers, we won't buy yours.
As the number of players increase, it causes the dynamics to increase. IBM is right in its stance to want to protect customer's data. It's their whole business model and not just from unauthorized government access but access to customer's data from customer's competitors as well. Each player has their own valid argument relatively, but at the end of the day it seems like issues relating to tariff and non-tariff barriers.
Whoopty
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Whoopty,
User Rank: Ninja
3/18/2014 | 10:44:40 AM
Re: If you don't buy our servers, we won't buy yours.
That's a lot better than we have here in the UK. Here PM David Cameron has told us all how much he likes Huawei's filtering system in China and would like something similar here. 

Still, it's interesting how IBM has pitched itself as not the owner of customer data, that way it and they are protected. But it is surprising, since that data, while volatile, would be potentially very valuable. 
JoeC371
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JoeC371,
User Rank: Apprentice
3/18/2014 | 11:47:16 AM
What we really need to hear...
... is that if you are given secret orders to violate the Constitutional and due-process rights of your customers, you will have the balls to tell NSA to 'booger off' and send out a mass e-mail to Congress, major news organizations, your customers and everybody in your contact list, titled "I totally didn't mean to send this. Yikes!"


What IBM is saying is, essentially "If we find ourselves in a position where we are forced to fight a losing legalistic battle against secret actors in secret settings, we will totally operate by their rules and suffer their legalistic wranglings in order to do everything in our power, which is nothing."


Well, big corporation people who spend billions a year worrying about security... I guess that money will be well spent. Don't you feel 'secure'?
Lorna Garey
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Lorna Garey,
User Rank: Author
3/18/2014 | 1:14:00 PM
Re: If you don't buy our servers, we won't buy yours.
It's a lot easier for IBM to take this stance since it's unloaded its hardware businesses to Lenovo.
KevinO442
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KevinO442,
User Rank: Strategist
3/18/2014 | 5:46:06 PM
Resistance is Futile
You live in a country where they've already kicked in the door with FBI agents once and demanded the keys or they'll arrest everyone in sight.

 

Your statement should be , more accurately "IBM : We'll Stand Up to NSA only until the start arresting us... "

 And , of course, since you are legally required to deny (or technically "not to disclose" ) your cooperation with the NSA , your letter denying you ever told them anything means nothing. You'd be sending the exact same letter whether you did or you didn't.

 
KevinO442
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KevinO442,
User Rank: Strategist
3/18/2014 | 5:54:00 PM
Re: If you don't buy our servers, we won't buy yours.
All "secure servers" for use by the local governments need to be manufactured locally. (within that same country).  It's really the only solution because countries like China won't hesitate to build in a back door if they ever become part of a contract for some foreign countries government utilized netowrk.
D. Henschen
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D. Henschen,
User Rank: Author
3/18/2014 | 6:27:42 PM
Re: If you don't buy our servers, we won't buy yours.
CORRECTION: IBM only unloaded its X86 business. IBM still manufactures System Z mainframes and Power System servers. These were always the big money makers to begin with.
Lorna Garey
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Lorna Garey,
User Rank: Author
3/18/2014 | 6:32:55 PM
Re: If you don't buy our servers, we won't buy yours.
Good point, Doug. Hardware back doors are probably a whole other column!
Ariella
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Ariella,
User Rank: Ninja
3/18/2014 | 7:59:15 PM
Re: If you don't buy our servers, we won't buy yours.
@Kevin0442 I agree, but do you think it's likely to happen?
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