Share

IT firms seize opportunity from spy scandal

Hanover - European IT security firms have flocked to the world's biggest high-tech fair with hopes of benefiting from the fallout from shock revelations of mass US and British spying.

Exactly a year ago, Chancellor Angela Merkel vaunted her new, ultra-secure Smartphone at the opening of the same fair, the CeBIT, in the northern city of Hanover.

Revelations that US intelligence allegedly eavesdropped on her mobile phone conversations and hoovered up vast amounts of online data and telephone records from average citizens have since sent shockwaves around the world.

German firm Secusmart, which provides the security features for the German government's telephones, said it has now been approached by several other governments.

Secusmart chief Hans-Christoph Quelle declined to name the governments in question but stressed his business had seen a knock-on effect from the leaks by rogue US analyst Edward Snowden.

"Our core product is mobile voice encryption. And mobile voice encryption was a nerdy feature," the head of the 2007-established company said in an interview at the five-day CeBIT with AFP.

But he added: "Snowden has already changed things because at that time (in 2013 when Merkel showed off her new phone) everybody thought that only mobile networks are unsecure.

"But we learned with Snowden that all voice calls are unsecure."

Secusmart has this year teamed up with Britain's Vodafone to create an app to allow businesses to keep all telephone communications, including conference calls, secure.

Thanks to this new app, as well demand for the ability to ensure conversations are kept safe having increased "dramatically", Secusmart is banking on 20% growth, Quelle said.

It is far from alone in eyeing new business in the wake of the Snowden leaks.

Among CeBIT's sprawling layout, one entire hangar-like hall has been turned over to IT security, with around 500 companies offering specialised solutions, many from Europe and Asia.

By casting doubt on the confidentiality of data in the digital world, the scandal over mass spying "has shown consumers everywhere in the world the importance of protecting data," Dieter Kempf, head of German IT industry lobby Bitkom, told AFP.

According to the European Information Technology Observatory, a platform managed by a subsidiary of Bitkom, two thirds of European companies want to invest in security measures.

'Wake-up call'

Security analyst Oliver Rochford at the Gartner research company said the spying scandal and the debate it had whipped up would "offer opportunities" to those European companies with products ready to hit the market.

He also spoke of a "wake-up call" for Europe, a phrase also used during a visit to the CeBIT by EU Commissioner Neelie Kroes, who is responsible for digital agenda issues.

However, cashing in on the scandal that started with revelations about a mass spy programme by the US National Security Agency, is a delicate path for IT companies to tread.

"Don't sell with fear," warned Michael Goedeker, pre-sales director for British company Sophos.

"A lot of folks that we talk to have become very suspicious and don't really know quite what to do because the trust is not really there," he added.

According to US-based technology and market research company Forrester Research, the US high-tech sector - the first to be hit in terms of a loss of confidence - could lose up to $180bn in sales by 2016.

As the World Wide Web notches up its 25th birthday, some companies are promoting the regional anchoring of digital data as one way to reassure consumers.

At CeBIT, German operator Deutsche Telekom targeted medium-sized companies with an offer including its "Made in Germany" cloud where its remote data storage centres are located in the country.

The telecoms giant has also teamed up with two other leading German providers of electronic messaging to ensure securer mails between the three, in an initiative christened "Email Made In Germany".

The debate triggered by Snowden's leaks about privacy has been heated. But Tom Reuner, a UK-based analyst at Ovum, pointed out that companies have to make choices in their IT spending.

"For large companies, of course, there's a lot of investment in (security). But it's like insurance, are you willing to pay the premium?

"Not always," he said.

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.94
-0.2%
Rand - Pound
23.91
-0.0%
Rand - Euro
20.43
+0.2%
Rand - Aus dollar
12.34
+0.1%
Rand - Yen
0.13
-0.2%
Platinum
910.50
+1.5%
Palladium
1,016.25
+1.4%
Gold
2,220.77
+1.2%
Silver
24.87
+0.9%
Brent Crude
86.09
-0.2%
Top 40
68,346
+1.0%
All Share
74,536
+0.8%
Resource 10
57,251
+2.8%
Industrial 25
103,936
+0.6%
Financial 15
16,502
-0.1%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders