Last month, Reuters reported that US tech firms doing business in China, including Cisco and IBM, had experienced significant declines in sales. Several industry analysts suggested that the "Snowden Effect" -- the cascade of events and reports that followed Edward Snowden’s leaks of classified information about NSA surveillance programs -- was a major reason these firms were struggling to sell their services in the world’s second biggest economy.
When I spoke about the potential impact of Snowden’s spying revelations at a recent panel discussion at Le Web, I was surprised to hear Amazon CTO Werner Vogels say that his company wasn’t expecting to see any consequences. Perhaps he believed that Amazon is simply too big to feel any downside, but I wonder if he’s changed his mind in light of that Reuters report.
A lot of people have been blinded to the true nature of the Snowden Effect by the political outrage surrounding the revelations, especially from world leaders whose own nations are not above a bit of espionage. But for businesses and individuals, mistrust is far more justified, and its target is not confined to government agencies. A broader, more long-term impact of the Snowden Effect is that it forces everyone to ask the question: Who is really in control of my information?
Where once files were on your hard drive or your company’s internal network, now it’s more beneficial to store your information online (in the "cloud," if you must). You can access your work across devices and use file sharing services to distribute material and work online with others from anywhere. But it can also mean you’re no longer in complete control of your information. The Snowden Effect is the catalyst for people to really think about whether the benefits of online storage outweigh the loss of control and to start looking for alternatives to the status quo.
Historically, technological development tends to follow this pattern, where an initial surge of enthusiasm for a new idea is followed by a second wave that gives deeper consideration to wider impacts. Social networks like Facebook and Twitter initially seemed to signal the end of privacy, but today even teenagers are more aware of the potential pitfalls of oversharing and turn to less permanent communication tools like SnapChat.
The second wave
For the online storage and sharing industry, where I am CEO at Hightail, this second wave has now arrived. To be a successful and trusted service, all providers need to offer all customers -- from big businesses to individual professionals -- two important things: control and transparency.
If your favorite news site suddenly shows you articles tailored to your interests, it can feel a little creepy. Aside from some abstract agreement to accept cookies or unreadable Terms and Conditions, you have not explicitly consented to this. Compare that experience with using Flipboard, the magazine app that you choose to connect to your social networks and favorite publications in order to receive personalized content. This isn’t creepy; it’s cool. Giving users control coupled with transparency is the key to providing a service they can trust.
In the file-sharing world, control means giving users options to ensure that shared files don’t find their way into the hands of unauthorized people. Transparency is about knowing what happened to shared files. For individuals it is about who has accessed a file and when. Businesses need to keep track of any company data that’s shared externally
The Snowden leaks have made companies realize that they may have more to fear from authorized employees than anonymous hackers. To mitigate the risk of sensitive information leaks, the ability to know which files have been shared, monitor activity for suspicious behavior, or block a competitor’s domain, is crucial.
Another key element in providing greater control is ensuring that the process is extremely user friendly. I know a few security-obsessed people who are happy to use byzantine encryption software, but normal people don’t work like that. If a system or product is too complicated, users will find a workaround, whether that’s propping open a door because the six-digit keycode changes every week or using a consumer product because the company-sanctioned solution involves jumping through too many hoops.
The Snowden Effect is a game changer and a healthy one at that. From politics to digital services, it has raised questions about data control and transparency that businesses and individuals should have been asking for a long time. In turn, providers of these services must start meeting these demands, or they’ll go the way of microfilm and button cameras favored by spies from a more romantic era of espionage.