After new photographs surfaced showing the National Security Agency (NSA) apparently intercepting shipped boxes of Cisco Systems’ (CSCO) networking gear to implant it with spying software, chief executive John Chambers wrote President Obama asking him to curtail the agency's snooping activities and warned of eroding confidence in technology companies.
Cisco confirmed that Chambers had written the letter but declined to provide any details.
Chambers wrote Obama only one day after photographs on the Internet showed NSA staffers breaking into a box of Cisco equipment, according to a report in the Financial Times. In the letter, Chambers called for “standards of conduct” to pare back U.S. government surveillance so as not to harm the global technology market.
The unverified photographs stem from leaked NSA documents that show the agency’s techs intercepting shipments of equipment from Cisco and other IT vendors, ostensibly to arm the gear to enable covert activities. Reports alleged the NSA altered routers, servers and other network devices made by U.S. manufacturers.
Cisco, among other IT vendors, has vehemently denied any complicity with the NSA’s roundly criticized surveillance activities.
“We ship our products globally from inside as well as outside the United States, and if these allegations are true, these actions will undermine confidence in our industry and in the ability of technology companies to deliver products globally,” wrote Chambers.
“We simply cannot operate this way; our customers trust us to be able to deliver to their doorsteps products that meet the highest standards of integrity and security,” he wrote. “We understand the real and significant threats that exist in this world, but we must also respect the industry’s relationship of trust with our customers.”
In its recently reported Q3, Cisco showed some signs it may be pulling out of the doldrums that have handcuffed it for months. While the vendor posted 5.5 percent lower sales and a 3.2 percent slide in net income, it did beat its own guidance for the period, recording $11.5 billion in revenue and net earnings of $2.6 billion or 42 cents a share.
Cisco’s U.S. sales were strong but the vendor’s performance in emerging markets slid precipitously, a result Chambers blamed in part on the NSA’s activities causing some foreign customers to hesitate on purchases.
In Q4 Cisco expects to lighten its revenue slide to between 1 percent and 3 percent with the expectation it will take a number of quarters to produce positive sales numbers, Chambers said.