Cisco: Snowden Leak Hit Chinese Sales ‘Unfairly’

Networking giant Cisco believes the Edward Snowden revelations on mass surveillance have hurt its business – and the damage has been unfair.

The leaks implied that US vendors were colluding with agencies such as the NSA to operate surveillance networks. This hurt Cisco’s sales, particularly in China, to the tune of “a couple of hundred million”, according to Terry Greer-King, Cisco’s new UK and Ireland director of security. However although “many questions had been raised” , he told TechWeekEurope that all suggestions of collusion were refuted.

A rumour enough to hit Cisco

“A rumour is enough. A rumour because we are an American company,” Greer-King said. “Whether it has any truth behind it is a completely different matter.”

Reactions in one part of the world can have big effects elsewhere, he said: “It just seems a little unfair.”

The rumours stemmed from reports that the US National Security Agency (NSA) had infected networks at Chinese businesses and universities, apparently with the help of US suppliers. Other vendors, including Microsoft, Apple, Google and IBM, were also implicated.

Cisco subsequently reported product orders in China had fallen 18 per cent in the most recent quarter, whilst overall revenues worldwide have increased.

John Chambers, CEO of Cisco, said during a recent earnings call that the Snowden leaks were “a factor” when looking at declining sales in China. Robert Lloyd, Cisco’s president of sales, admitted the reports had caused some customers to “pause and re-evaluate”.

According to a Wall Street Journal report, Cisco’s new Cloud Fusion project could help it ease some fears around privacy of data, as it allows customers to keep control of their information, whilst enjoying the benefits of cloud infrastructure. Customers keep hold of encryption keys too.

Cisco has not been on the long list of technology companies who have formally written to the Obama administration for greater transparency on NSA surveillance.

Earlier this year, the Electronic Frontier Foundation backed Chinese human rights activists who sued the US networking giant for selling surveillance kit for the Chinese government.

Meanwhile, a US judge has declared the NSA’s snooping on telephone metadata and records unconstitutional.

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