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Dana Gardner: Hello, and welcome to the latest BriefingsDirect Analyst Insights Edition, Volume 50. I'm your host and moderator Dana Gardner, principal analyst at Interarbor Solutions.
This periodic discussion and dissection of IT infrastructure related news and events with a panel
of industry analysts and guests, comes to you with the help of our charter sponsor Active Endpoints, maker of the ActiveVOS business process management system.Our topic this week on BriefingsDirect Analyst Insights Edition focuses on the fallout from the Google’s threat to pull out of China, due to a series of sophisticated hacks and attacks on Google, as well as a dozen more IT companies. Due to the attacks late last year, Google on January 12th vowed to stop censoring Internet content for China’s web users and possibly to leave the country altogether.
This ongoing tiff between Google and the Internet control authorities in China’s Communist Party-dominated government have uncorked a Pandora’s Box of security, free speech and corporate espionage issues. There are human rights issues and free speech issues, questions on China’s actual role, trade and fairness issues, and the point about Google’s policy of initially enabling Internet censorship and now apparently backtracking.
But, there are also larger issues around security and Internet governance in general. Those are the issues we’ll be focusing on today. So, even as the US State Department and others in the US federal government seek answers on China’s purported role or complicity in the attacks, the repercussions on cloud computing and enterprise security are profound and may be long-term.
We’re going to look at some of the answers to what this donnybrook means for how enterprises should best protect their intellectual property from such sophisticated hackers as government, military or, quasi-government corporate entities and whether cloud services providers like Google are better than your average enterprise or even medium-sized business at thwarting such risks.
We'll look at how users of cloud computing should trust or not trust providers of such mission-critical cloud services as email, calendar, word processing, document storage, databases, and applications hosting. And, we’ll look at how enterprise architecture, governance, security best practices, standards, and skills need to adapt still to meet these new requirements from insidious world-class threats.
So, join me now in welcoming our panel for today’s discussion. Welcome to Jim Kobielus, senior analyst at Forrester Research. Hello, Jim.
Jim Kobielus: Hi Dana. How are you, buddy?
Gardner: Jason Bloomberg, managing partner at ZapThink.
Jason Bloomberg: Hi. Glad to be here.
Gardner: Jim Hietala, Vice President for Security at The Open Group.
Jim Hietala: Hello, Dana. [Disclosure: The Open Group is a sponsor of BriefingsDirect podcasts.]
Gardner: Elinor Mills, senior writer at CNET. Hello, Elinor.
Elinor Mills: Hi.
Gardner: And Michael Dortch, Director of Research at Focus.
Michael Dortch: Hi, Dana, and greetings, everyone.
Gardner: Thanks. Great having you with us Michael.
Elinor, let me start with you. You’ve been covering Internet security, and even Google specifically, for several years now. When we think of security, we often think of teenage hackers or lowbrow malware and pesky pop-ups, but do you think that this Google-China finger-pointing business has, in a sense, changed the way security is viewed.
Pointing fingers
Mills: Oh, absolutely. We’ve got a huge first public example of a company coming out and
saying, not only that they've been attacked -- companies don’t want to admit that ever and it’s all under the radar -- but also they’re pointing the fingers. Even though they're not specifically saying, "We think it’s the Chinese state," but they think enough of it that they're willing to threaten to pull out of the country.It’s huge and it’s going to have every company reevaluating what their response is going to be -- not just how they’re going to do business in other countries, but what is their response going to be to a major attack.
Gardner: Does this mean that the companies, enterprises specifically, need to rethink both security for what you'd call criminal activity, but now think at a higher level -- higher level being government versus government?
Mills: Yes, if they’re big companies -- mid-size companies maybe not so much. Bigger companies have been targeted with espionage for a while, especially if they have any kind of technology that China or any other country might want. I think there's going to be more emphasis on it. They’re going to have to think about it. For smaller companies, it’s not going to be as much of a problem.
Gardner: Jim Kobielus, do you view this as a big issue or is this more of the same? Have the folks that you deal with, who are protecting their data and information, been aware of these threats? Is this more of a public relations problem than a real one?
Kobielus: I won’t say it’s just a public relations problem. It is a real one. If you’re going to be a
multinational firm -- I've heard the term "supernational" used as well -- you’re not above the laws and governmental structures of the nations within which you operate. It's always been this way. This is a sovereign nation, and you're subject to their laws.If you’ve been a multinational firm before, or if you wish to be one, you’ve got to play by whatever rules are imposed upon you to operate in these spheres. One of the key issues for Google is whether they want to continue to be a business that’s growing in this particular market, subject to whatever rules are laid down, whether they want to be a crusader for civil rights, human rights, whatever, in the Western context, or if they’re trying to be both. It means they’re going to have to contend with the government of the People’s Republic of China on their own turf -- and good luck there.
Gardner: Don’t you think, Jim, that these issues transcend national boundaries or even laws that govern as a particular sovereign nation? If your servers are in one country, why should it be bound by the laws in another?
Kobielus: Well, your servers are physically hosted somewhere. Your access is from people, end users, in many nations that are trying to access whatever services you provide from those physically hosted servers.
So, your users and your servers are subject to the laws and the firewalls and security constraints and so forth in the various nations within which you will physically operate, as well as where your supply chain and your customer base will physically operate. None of these segments, these nodes, in this broader value chain are free floating in space like they're elevated platforms in the Jetsons.
Wakeup call?
Gardner: I think Google is going to perhaps challenge the way you’re looking at this. It should be interesting to see how it pans out. Jason Bloomberg, does this provide some sort of a wakeup call for enterprises and service providers as well about how they architect? Do they need to start architecting for a larger class of threats?
Bloomberg: It’s not as big of a wakeup call as it should be. You can ask yourself, "Is this an
attack by some small cadre of renegade hackers or is this attack by the government of the People’s Republic of China? That’s an open question at this point.Who is the victim? Is it Google, a corporation, or the United States? Is it the western world that is the victim here? Is this a harbinger of the way that international wars are going to be fought down the road?
We’ve all been worried about cyber warfare coming, but we maybe don’t recognize it when we see it as a new battlefield. It's the same as terrorism. It’s not necessarily clear who the participants are. We have this 18th Century view of warfare, where two armies meet on the battlefield and slug it out with the weapons of the day. But, terrorism has introduced new types of weapons and new types of battlefields.
Now we have cyber warfare, where it’s not even necessarily clear who the perpetrator is, who the victim is, or who the offended party is. This is a whole new context for conflict in the world.
When you place the enterprise into this context, well, it’s not necessarily just that you have a business within the context of a government subject to particular laws of particular government, you have the supernational, as Jim was taking about where large corporations have to play in multiple jurisdictions. That’s already a governance challenge for these large enterprises.
We already have this awareness that every single system on our network has to look out for itself and, even then, has levels of vulnerability.
Now, we have the introduction of cyber warfare, where we have concerted professional attacks from unknown parties attacking unknown targets and where it’s not clear who the players are. Anybody, whether it’s a private company, a public company, or a government organization is potentially involved.
They may not even fully know how involved they are or whether or not they are being targeted. That basically raises the bar for security throughout the entire organization. We’ve seen this already, where perimeter-based security has fallen by the wayside as being insufficient.
Sure, we need firewalls, but even though we have systems inside our firewalls, it doesn’t mean they are secure. A single virus can slip through the firewall with no problem at all. We already have this awareness that every single system on our network has to look out for itself and, even then, has levels of vulnerability. This just takes it to the national level.
Kobielus: But, there has always been corporate espionage and there’s always been vandalism perpetrated by companies against each other through subterfuge, and also by companies or fronts operating as the agent of unseen foreign power. This is what was the Germans did in this country before World War II to infiltrate, or what the Soviet Union did after World War II.
This is international real-politic as usual, but in a different technological realm. Don’t just focus on China. Let’s say that Google had a data center in Venezuela. They could just as easily have that expropriated by Hugo Chavez and his government. In China, that’s a possibility too.
Nothing radically new
What I’m saying is that I don’t see anything radically or fundamentally new going on here. This is just a big, powerful, and growing world power, China, and a big and growing world power on a tech front Google, colliding.
Mills: They have so much data. They’re becoming a service provider for the world. It’s not just their data that’s being targeted. You’ve got the City of Los Angeles, you’ve got DC, other government entities, moving onto Google Apps. So, the end target in the cloud is different than just the employees of one company.
Dortch: That challenge puts Google in the very interesting position of having to decide. Is it a
politically neutral corporation or is it a protector of the data that its clients around the world, not just here, and not just from governments but corporations? Is it a protector and an advocate of protection for the data that those clients have been trusted to it? Or, is it going to use the fact that it is a broker of all that data to sort of throw its muscle around and take on governments like China’s in debates like this.The implications here are bigger than even what we’ve been discussing so far, because they get at the very nature of what a corporation is in this brave new network world of ours.
And, this is taking place against the backdrop where the Supreme Court just decided that corporations in the United States have the same free speech rights and political campaigns as individuals. We're not clear at all on what this is going to mean for how the entity called a corporation is perceived, especially in the cloud.
Gardner: Thank you, Michael. Jim Hietala, help me understand, from your perspective, is this a game-changing event or is this more business as usual when it comes to corporate security.
Hietala: In terms of the visibility it’s gotten and the kinds of companies that were attacked, it’s
a little bit game-changing. From the information security community perspective, these sorts of attacks have been going on for quite a while, aimed at defense contractors, and are now aimed at commercial enterprises and providers of cloud services.I don’t think that the attacks per se are game-changing. There’s not a lot new here. It’s an attack against a browser that was couple of revs old and had vulnerability. The way in which the company was attacked isn’t necessarily game-changing, but the political ramifications around it and the other things we’ve just been talking about are what make it a little game-changing.
Gardner: I’d like to understand more about Michael Dortch’s point about the cloud providers and Elinor's as well. Should people think about a cloud provider as the best defense against these things, because they are current and they’ve got the power of scale they need to make this secure or their business itself is undermined?
Or, is this something that’s best done at the individual level, company by company, firewall by firewall? Does anyone have some thoughts about that?
Dortch: I’m reminded of what Ronald Reagan famously said, “Trust, but verify.” It’s one of those things where the cloud becomes a part of a good defense, but you can’t place all of your eggs in any one basket.
Combining resources
Companies that are doing business internationally and that worry about this sort of thing -- and they all should -- are going to have to combine cloud-based resources from reputable companies with documented protections in place with other protections, in case the first line of defense fails or is challenged in some major way.
Kobielus: In some ways, we all perceive what a cloud provider like Google needs to be regarded as in international law. It’s almost like a cyber Switzerland. Basically, it’s almost like, in another metaphor, an off-shore bank for your data and your other assets, in the same neutral role that Switzerland has played through the years, including during World War II for Nazi secreted assets.
In other words, it’s somehow a sovereign state, in its own right, with the full rights and privileges accruing thereto. I don’t think anybody is willing to take it that far in international law, but I think there is this perception that for cloud providers like Google to really realize their intended mission, there needs to be some change in international governance of sort of assets that transcend nation states.
Bloomberg: You could actually think of that as a reductio argument, because there isn’t going to be such a change. Cloud environments do not have that sort of power or capability and, if anything, cloud environments reduce the level of security.
They don’t increase it for the very reason that we don’t have a way of making them sovereign in their own right. They’re always not only subject to the laws of the local jurisdiction, but they’re subject to any number of different attacks that could be coming from any different location, where now the customers aren’t aware of this sort of vulnerability.
So, “Trust, but verify,” is a good point, but how can you verify, if you’re relying on a third party to protect your data for you? It becomes much more difficult to do the verification. I'd say that organizations are going to be backing away from cloud, once they realize just how risky cloud environments are.
All enterprises still are going to have to be at the top of their game, in terms of protecting their assets. . .
Mills: Microsoft’s general counsel Brad Smith this week gave a keynote at the Brookings Institute Forum, and he talked about modernizing and updating the laws to adapt specifically to the cloud. That included privacy rights under the Electronic Communications Privacy Act being more clearly defined, updating the Computer Fraud and Abuse Act, and setting up a framework so that differences in the regulations and practices in various countries can be worked out and reconciled.
Gardner: What happens if you are a small to medium-sized business and you might not have the resources to put into place all the security you need to deal with something like a China or Venezuela, or perhaps some large company that’s in another country that wants to take your intellectual property? Are you better going to a cloud provider and, in a sense, outsourcing security? Jim Hietala, does that make sense for a small to medium-sized business?
Hietala: I don’t think you can make that case yet today. I don’t think there is a silver-bullet cloud provider out there that has superior security to have that position. All enterprises still are going to have to be at the top of their game, in terms of protecting their assets, and that extends to small or medium businesses.
At some point, you could see a cloud provider stake out that part of the market to say, "We’re going to put in a superior set of controls and manage security to a higher degree than a typical small-to-medium business could," but I don’t see that out there today.
Waiting for disaster
Dortch: All of us who’ve doing this for a while, I think, will agree that where security is concerned, especially where cyber security is concerned, at least in North America, where I’m most familiar, companies tend not to talk about it or do anything, until there is some major catastrophe.
Nobody buys insurance, until the house next doors theirs burns down. So, from that perspective, this event could be useful. In terms of protecting their data, one of the issues that incidents like this raises is exactly how much corporate data is already in the cloud.
Many small businesses outsource payroll processing, customer relationship management (CRM), and a whole bunch of things. A lot of that stuff is outsourced to cloud service providers, and companies haven’t asked enough questions yet about exactly how cloud providers are protecting data and exactly how they can reassure that nothing bad is going to happen to it.
For example, if their servers come under attack, can they demonstrate credibly how data is going to be protected. These are the types of questions that incidents like this can and should raise in the minds of decision-makers at small and mid-sized businesses, just as they're starting to raise these issues, and have been raising them for a while, among decision-makers at larger enterprise.
Kobielus: I think what will happen is that some cloud providers will increasingly be seen as safe havens for your data and for your applications, because (A) they have the strong security, and (B) they are hosted within, and governed by, the laws of nation states that rigorously and faithfully try to protect this information, and assure that the information can then be removed -- transferred out of that country fluidly by the owners, without loss.
How about governments in general, maybe it's the United Nations who steps in? Who is the ultimate governor of what happens in cyber space?
In other words, it's like the Cayman Islands of the cloud -- that offshore banking safe haven you can turn to for all this. Clearly, it's not going to be China.
Gardner: We’ve seen in the history of the United States -- and, of course, the business world at large -- that whenever threats elevate to a certain level, the government steps in. We have seen with piracy, border controls, taxation, trade mandates, freedom pacts, and so forth. Whenever a threat arises, businesses get up and say, "Hey, we pay taxes. Uncle Sam, please come in and save us," whether it's through the navy or some technology.
Should we expect that, if we come to understand that this was an attack against American business interests from a foreign government of some kind, that it's up to the government to solve the problem? How about governments in general, maybe it's the United Nations who steps in? Who is the ultimate governor of what happens in cyber space?
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Dortch: Dana, in 2007, the National Academies of Science issued a cyber security report, and it included ten provisions that, at that time at least, were looked at as potentially the foundation for a cyber security bill of rights. Maybe it's time to reawaken discussions like that. Maybe what's needed is the cyberspace equivalent of the United Nations.
This is a lot of heavy lifting that we're talking about, and businesses have problems to solve and threats to address today. So your question begs another one: how do we get to the stage we need to be, where there can be trusted offshore equivalence databanks and all of that? And, what do we do in the meantime? I'm not smart enough to have answers to those questions, but they're really interesting.
We know the game
Kobielus: At a governmental level, obviously there will always be approaches and tools available to any sovereign nation -- treaties, negotiations, war, and so forth. We all know that. Clearly, we all know the game there.
In terms of who has responsibility and how will governance best practices be spread uniformly across the world in such areas of IT protection, it's going to be some combination of multilateral, bilateral, and unilateral action. For multilateral, the UN points to that, but there are also regional organizations. In Southeast Asia there is ASEAN, and in the Atlantic there is NATO, and so forth.
So, there is going to be a combination of all that. For this administration and subsequent administrations in the U.S., it’s just a matter of their putting together a clear agenda for trying to influence the policies, practices, and enforcement within China and other nations that may prove unreliable in terms of protecting the interest of our businesses.
Dortch: And, Secretary of State Clinton’s director of innovation -- I believe that's his title -- has already said publicly that it's a linchpin of our negotiating strategy with China and other countries.
Just as we, as a country, are an advocate for human rights, we're increasingly and more overtly advocating that other country’s citizens have free access to the Internet and basically have the cyber equivalent of human rights. That's going to play out in some very interesting ways as it becomes a larger part of our global diplomatic effort.
At a governmental level, obviously there will always be approaches and tools available to any sovereign nation -- treaties, negotiations, war, and so forth.
Kobielus: Keep in mind that the UN had a human rights declaration in 1946. China signed up, the Soviet Union signed up, and it didn’t make a whole lot of difference in terms of how they treated their own people over time. Keep in mind that such declarations are fine and dandy, but often don’t have much impact on the ground.
Gardner: So, enforcement is important. What we’ve seen so far is the enforcement of the marketplace, and I think that's what Google is up to in many respects. They’re saying, "Listen, we are a big enough company. We have such sophisticated technology and our price points for our services are so low that you would be at a disadvantage as a competitive nation not to have us working inside of your market, China."
Then, China says back to Google, "We are potentially, if not already, the biggest Internet market in the world, so don’t you think you have to adhere to our dictates in order to play ball in our court?" So, there is sort of a tussle within market powers. Is that's going to be the best way for these issues to be resolved?
Kobielus: It’s going to have to be resolved in the China context. They are the middle kingdom. They’ve seen themselves as the center of the universe, and it's not just me saying that. It's all manner of China scholars. This not fundamentally any different from the way in which Chinese centralized bureaucracy and governance for over 2,000 years.
Gardner: Jason Bloomberg, do you think that the traditional free market -- the powerful interests and the money -- are enough to balance the risks associated with security in this newest age?
Who decides "enough?"
Bloomberg: When you say "enough," the question is who decides what is enough. We have these opposing forces. One is that information should be free, and the Internet should be available to everybody. That basically pushes for removing barriers to information flow.
Then you have the security concerns that are driving putting up barriers to information flow, and there is always going to be conflict between those two forces. As increasingly sophisticated attacks develop, that pushes the public consensus toward increasing security.
That will impact our ability to have freedom, and that's going to be, continue to be a battle that I don’t see anybody winning. It's’ really just going to be an ongoing battle as technology improves and as the bad guys attacks improve. It's going to be an ongoing battle between security and freedom and between the good guys and the bad guys, as it were, and that's never going to change.
Gardner: Now, taking up on your point, Jason Bloomberg, about this being a spy-versus-spy kind of world, that's been that way so far. We thought about how governments might come in. Large corporations can play their role. Cloud providers might have to step in and offer some sort of an SLA-based protection or outsourced security opportunity of some kind.
What about going in the other direction? What if we go down to the individual who says, "If I'm going to play in the cloud or in this world-class cyber warfare environment, I want to have high encryption. I want to be able to authenticate myself in the best way possible. Therefore, I’ll give up some convenience. I might even pay a price, but I want to have the best security around my identity and I want to be able to play with the big boys, when it comes to encryption and authentication?"
If you're talking about specific individuals, it’s almost hopeless, because your average individual consumer doesn’t have the level of knowledge to go out and find the right solutions to protect themselves today.
We don’t really have an opportunity for those people to say, "I want to exercise security at an individual level." Jim Hietala, is there anything like that out there to get them to move towards the individual level of self-help, when it comes to high levels of security?
Hietala: Large enterprises are going to have to be responsible for the security of their information. I think there are a lot of takeaways for enterprises from this attack. If you're talking about specific individuals, it’s almost hopeless, because your average individual consumer doesn’t have the level of knowledge to go out and find the right solutions to protect themselves today.
So, I'll focus on the large enterprises. They have to do a good job of asset inventory, know where, within their identity infrastructure, they're vulnerable to this specific attack, and then be pretty agile about implementing countermeasures to prevent it. They have to have patch management that's adequate to the task of getting patches out quickly.
They need to do things like looking at the traffic leaving their network to see if people are already in their infrastructure. These Trojans leave traces of themselves, when they ship information out of an organization. When people really understand what happened in this attack, they can take something away, go back, look at what they are doing from a security standpoint, and tighten things up.
If you're talking about individuals putting things in the cloud, that’s a different discussion that doesn’t seem real feasible to me to get them to the point where they can secure their information today.
Centralized directory
Gardner: Jim, I was getting back to what I used to hear almost 20 years ago in the messaging space, when we first started talking about directories, that the directory is only as good as the authentication and the information and verification.
Don’t we need a centralized directory that we can bounce off these credentials and make sure that they are valid and authenticated? But, there was no central place to do that. Is it time for the government or some other agency or organization to come in and create that über directory for that large-scale global authentication capability?
Kobielus: You're talking about identity systems, with a web of trust, PKI and so forth. We've been talking about that for years. About five years ago, I was with a company that was trying to build federated cross-industry identity management for aerospace and defense, one North Atlantic industry, and even that was frightfully complicated. It probably still hasn’t gotten off the ground.
Imagine creating a similar federated directory with all the stronger authentication and encryption and so forth for all industries within the US. Especially consider worldwide. It’s not going to happen. It’s just a huge engineering nightmare, putting together the trust relationships and working out all the interchange and interoperability issues. It’s just overkill. It’s just much more trouble than it’s worth.
Gardner: Too much federation. But what if there are only a handful of major cloud providers? Maybe it’s Google, Yahoo, Amazon, and Microsoft -- and I've just thrown those out. It could be a number of others. They might have the market heft or the technological wherewithal to enforce and deliver such an authentication and federated directory into existence.
I don’t see the people running cloud-computing companies being radically different from the people that run phone companies . . .
Is anybody thinking like I am, that maybe cloud computing is different, that we can start to actually use the scale of these cloud providers to accomplish these large security requirements?
Dortch: You know, Dana, people change a lot more slowly than technology does. Just a few short months ago, a lot of us were outraged, when it turned out that a handful of major telephone service providers had apparently been giving information to the government without the knowledge or consent of the subscribers whose information was manipulated. At least, that's what the published report seemed to indicate.
I don’t see the people running cloud-computing companies being radically different from the people that run phone companies, and I don’t see them being, a priori, any less subject to influence by their own governments, bribes, threats, or anything else than the people who run the phone companies. I think that’s a good idea but I think it’s fraught with the same level of peril.
Kobielus: In fact, look at the last nine years since 9/11 and you can see in all the articles and stories how telcos have just bent over backwards to allow the Feds to come in and survey their users and subscribers and to abscond with call detail records to monitor terrorist and other people's calling patterns, quite often not even using a search warrant. In other words, it's exactly what he said. How can you trust the carrier to safeguard our privacy, when they so easily succumb to such government pressure?
Gardner: So, these are very big issues that will impact us all as individuals and citizens within our national interests, as well as our companies. Yet, no one seems to have a good sense -- and, there are some very bright people on the line today, of how to even go about defining the problem, never mind solving it.
Identity registrars
Kobielus: Dana, there is another point you raised about, why we don't just let the providers become sort of the über identity management registrars and then set a rate among themselves.
Remember about 10 years ago -- I'm getting old, I can remember back 10 or more years -- Microsoft with its MSN Passport fiasco? Microsoft was saying, "We want to be everybody's identity management hub." Then, the huge thing that was raised about it was, "Microsoft wants to control our identities." Then, things like Liberty Alliance and all the others sprung up to say, "No, no, it must be a centralized and better way, so no one company can control all of our online identities."
That whole passport idea was kind of cool in some ways, but was just shot down completely and definitively, because the culture just said, "No, we cannot allow one group to have that much power."
Gardner: They typically didn't trust Microsoft at that point, when it was at perhaps the apex of its power, right?
Kobielus: Exactly. Now, Google is at the apex of their power. Would we trust Google in the same capacity? Look at China. They will become probably the largest economy in the world, in the next 25 years. Can we trust them? No, of course not.
When you have too much power concentrated in one place, people naturally sort of revolt.
When you have too much power concentrated in one place, people naturally sort of revolt. "No, wait, wait. I don't want to give them any more powers than they already have. Let's rethink this whole 'give them control of my identity' thing."
Dortch: It was the desire to get away from too much centralized control that led to the invention of the PC in the first place. It's it's important to keep that in mind in this context.
Gardner: So, if you truly want to be safe, you should just turn off your PC and start sending out mail at 44 cents a pop.
Kobielus: And, then you're not safe from Anthrax, you know.
Gardner: Let's go around our panel. We’re almost out of time. I’d be interested now in hearing some predictions about what you think is going to happen next. We've done a great job at defining the scope, depth, and complexity of this problem set, a very complex undertaking. But, it seems like it's not something that's going to go away. What do you think is going to happen next, Jim Kobielus?
Kobielus: I don't think Google is going to leave China. I even saw a headline today. I think it said that they were going to stay in China and somehow try to work it out with the PRC. I don't know where that's going, but fundamentally Google is a business and has a "don't do evil" philosophy. They're going to continue to qualify evil down to those things that don't actually align with their business interest.
In other words, they're going to stay. There's going to be a lot of wariness now to entrust Google's China operation with a whole lot of your IT -- "you" as a corporation -- and your data. There will be that wariness.
Preferred platforms
Other cloud providers will be setting up shop or hosting in other nations that are more respectful of IP, other nations that may not be launching corporate or governmental espionage at US headquartered properties in China. Those nations will become the preferred supernational cloud hosting platforms for the world.
I can't really say who those nations might be, but you know what, Switzerland always sort of stands out. They're still neutral after all these years. You've got to hand that to them. I trust them.
Gardner: Jason Bloomberg, what do you think is going to happening next?
Bloomberg: In the short-term, the noise is going to die down or going to go back to business as usual. The security is going to need to improve, but so are hacks from the bad guys. It's going to continue, until there is the next big attack. And the question is, "What's it going to be and how big is it going to be?"
We're still waiting for that game changer. I don't think this is a game changer. It's just a way to skirmish. But, if a hacker is able to bring down the internet, for example, targeting the DNS infrastructure to the point that the entire thing collapses, that’s something that could wake people up to say, "We really have to get a handle on this and come up with a better approach."
Gardner: That's mass vandalism. That doesn't really suit the purposes of some of the types of folks we are talking about. They don't want to bring the Internet down. They simply want to get an advantage over their competitors.
From our perspective, we're starting to see more awareness at higher levels in governments that the threats and issues here are real.
Bloomberg: Well, it really depends. We don't know who the bad guys are and what they’re trying to do. There's no single perspective. There's no single bad guy out there with a single agenda. We just don't know. We don't know what the agendas are.
Gardner: We don't know whether we've a level playing field or not?
Bloomberg: We can count on it not being leveled.
Gardner: Right. Jim Hietala, what do you see as some of the short- or medium-term next steps?
Hietala: From our perspective, we're starting to see more awareness at higher levels in governments that the threats and issues here are real. They’re here today. They seem to be state sponsored, and they're something that needs to be paid attention to.
Secretary of State Clinton gave a speech just today, where she talked specifically about this attack, but also talked about the need for nations to band together to address the problem. I don't know what that looks like at this point, but I think that the fact that people at that level are talking about the problem is good for the industry and good for the outlook for solutions that are important in the future.
Gardner: So, perhaps a free world versus an unfree world, at least in cyber terms, and perhaps the free world would have an advantage, or maybe the unfree world would have an advantage. It's hard to say.
Hietala: I'd agree it's hard to say, but the fact that those discussions going on is positive.
Gardner: Elinor Mills, any sense of where things are going?
Leading the way
Mills: I'm horrible at predictions, but I'll just throw this out. I think Google is going to get out of China and try and lead some kind of US corporate effort or be a role model to try to do business in a more ethical way, without having to compromise and censor.
There will be a divergence that you'll see. China and other countries may be pushed more towards limiting and creating their own sort of channel that's government filtered. I think the battle is just going to get bigger. We're going to have more fights on this front, but I think that Google may lead the way.
Gardner: Very good. Michael Dortch, where do you see it going?
Dortch: Elinor is at least partly right. Especially, if Google leaves China, Baidu's going to rise up as being the government approved version of Google for China and its localities. The very next thing Google will do is forge a strong working relationship as it possibly can with Baidu. You might see that model replicated across multiple countries in the world.
In the meantime though, something that -- if I remember correctly -- Astrodienst said almost 30 years ago is important to remember. Privacy is fungible. It's like currency. You're going to see individuals, small businesses, and individual corporate entities forging negotiations, deals, relationships, and accommodation that treat privacy and security as currency.
If it costs me a little bit more to do business here, I'm going to think seriously about it. Every once in a while, I'm going to swallow hard and pay the piper.
Google made itself into a figurehead of representing what a free enterprise approach could do. It's not state sponsored or nationalistic. It's corporate sponsored.
Gardner: Great. I'm going to throw my two cents as well. This boils down to almost two giant systems or schools of thought that are now colliding at a new point. They've collided at different points in the past on physical sovereignty, military sovereignty, and economic sovereignty. The competition is between what we might call free enterprise based systems and state sponsorship through centralized control systems.
Free enterprise won, when it came to the cold war, but it's hard to say what's going to happen in the economic environment where China is a little different beast. It's state sponsored and it's also taking advantage of free enterprise, but it's very choosy about what it allows for either one of those systems to do or to dominate.
When you look at the Google, Google made itself into a figurehead of representing what a free enterprise approach could do. It's not state sponsored or nationalistic. It's corporate sponsored. So, it would be interesting to see who has the better technology, who has the better financial resources, and ultimately who has the organizational wherewithal to manifest their goals online that wins out in the marketplace.
If an organized effort is better at doing this than a corporate one, well then they might dominate. But so far, we've seen a very complex system that the marketplace -- with choice, and shedding light and transparency on activities -- ultimately allows for free enterprise predominance. They can do it better, faster, cheaper and that it will ultimately win.
I think, we're really on the cusp here of a new level of competition, but not between countries or even alliances, but really between systems. The free enterprise system versus the state-sponsored or the centralized or the controlled system. It should be very interesting.
I want to thank our guests for today’s discussion. Jim Kobielus, senior analyst at Forrester Research. Thanks, Jim.
Kobielus: Sure.
Gardner: Jason Bloomberg, managing partner at ZapThink. Great to have you.
Bloomberg: My pleasure.
Gardner: Jim Hietala, Vice President for Security at The Open Group. Thank you, Jim.
Hietala: Thank you, Dana.
Gardner: And thank you for joining us, Elinor Mills, senior writer at CNET.
Mills: My pleasure.
Gardner: Lastly, I appreciate your debut here today, Michael Dortch, Director of Research at Focus.
Dortch: It was great fun, and I hope I passed the audition.
Gardner: You did.
Gardner: I also want to thank our charter sponsor for supporting today’s BriefingsDirect, Analyst Insights Edition, that's Active Endpoints. This is Dana Gardner, principal analyst at Interarbor Solutions. Thanks for listening, and come back next time.
Listen to the podcast. Find it on iTunes/iPod and Podcast.com. Download the transcript. Charter Sponsor: Active Endpoints.
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Edited transcript of a BriefingsDirect Analyst Insights Edition podcast, Volume 50, on what the fallout is likely to be after Google's threat to leave China in the wake of security breaches. Copyright Interarbor Solutions, LLC, 2005-2010. All rights reserved.
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