IBM Leak Mirrors Snowden, Manning Fiasco; NSA Disclosure to Cost Tech Firms up to $45 Billion

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By Jacob Cherian | August 27, 2013 7:22 PM EST

The recent episode concerning Edward Snowman and the NSA intelligence leaks offered fresh insight into employees leaking sensitive information about their companies. Now, a former employee at IBM has leaked extensive documentation about the Big Blue's lack of expertise in an area of computing that forecasts significant growth for the future of the computer industry.

The leak at IBM revealing its weakness in Cloud Computing services will significantly hurt the firm because it leads to poor performance of stocks, and undermines public trust. IBM has been in a rat race to maintain a footprint in cloud technology, the product of the future, which has already been capitalized by software giants like Microsoft Inc and Apple Inc. Moreover, IBM's competition against lesser players Oracle, Jeff Bezos Amazon, HP and UK's SOP are at stake.

The irony is that IBM still does not know how the secret information was leaked. Nonetheless, the incident is likely to cause a fair degree of angst among shareholders and this negative reaction could cause a pull back in stock prices.  

An executive at IBM told Information Week, "(IBM)...established the whole category of private cloud five years ago. We told the marketplace, and Gartner and IDC came to agree, that a lot of very large companies have gigantic data centres and a lot of stuff they want to control from a privacy or security perspective. Therefore, the first major opportunity from our client base was going to be us helping them build cloud delivery."

The common sense behind how an anonymous employee could transfer volatile files in a company known for its technical prowess is mind boggling. This security breach points to the kind of 'guerilla warfare' that is ongoing in corporate America. It appears to be getting easier to dislodge secrets and antagonize big multi-national corporations and superpowers like the U.S. by using formulas and strategies that hackers can compute single-handedly - the biggest example of this was the mastermind hacking behind the September 11th,  2001 bombings.

The ex-employee at IBM, said that the company did not have the "cloud intensive" spread projected on Wall Street and investors, tagging cloud revenue at $2.26 billion, as the individual shared secret documents with Information Week.

Though this figure has not been exposed to the public, IBM has targeted $7 billion for cloud revenue in 2015. This causes concern among insiders who say IBM is not on track.

In the wake of the Snowden debacle, U.S. cloud suppliers like IBM may have to assume losses of up to $45 billion due to the cost of hosting services in the next three years, according to Charles Babock, Editor at Large, Information Week. These costs stem from lost business stemming and disclosing of NSA monitoring like emails, phone calls, and Internet by the NSA's Prism programme.

Neelie Kroes, European Commissioner for Digital Affairs, was quoted as saying, "If European cloud customers cannot trust the United States government, then maybe they won't trust U.S. cloud providers either. ... If I were an American cloud provider, I would be quite frustrated with my government right now," Information Week reports.  

So the big question is why does an employee divulge sensitive information  about his/her company? Isn't that lack of loyalty to the employer who provides the pay-check and your "bread and butter"? And this leads to another question, "Are these disgruntled employees who provide secret information against the best interest of their former firm?

In the case of Snowden, he had expressed strong feelings of disapproval about how the United States was obtaining intelligence information even against close allies like the UK and that can be embarrassing. With Russian Premiere Vladimir Putin offering asylum, the United States has more at stake because more information about intelligence activities are bound to emerge when Snowden is befriended by an antagonist of the United States. So, this is really a bad situation no matter anyway you look at it.

Perhaps comparing Snowden to Bradley Manning, leaves Manning as more of a threat to the United Sates. Manning was sentenced to 35 years in jail after he was found guilty in the biggest information leak in the history of the United Sates.

After his verdict was announced, Manning's lawyer David Coombs read a statement by Manning which said, "If you deny my request for a pardon I will serve my time knowing that sometimes you have to pay a heavy price to live in a free society," ABC News reported.

A discussion on whistleblowers would not be complete without reference to Wikileaks founder, Julian Assange, who said, the U.S. has demonstrated there is no place for principle and conscience and the Bradley sentence is meant as a deterrent against future leaks.

However, Assange affirmed, "As a result, there will be a thousand more Bradley Mannings," ABC News reported.

There are many sides to the Bradley Manning story as reports by  he Australian and News.com say that Manny had experienced sexuality and gender issues while working as an intelligence officer in Iraq. After the sentencing Manning has requested to be called Chelsea Manning and wants to undergo hormone therapy during the jail term in a men's jail.

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