The technological landscape this week has been characterized by instability and insecurity with cyber security investments rising following the WannaCry ransomware attacks.
Hackers managed to use a previously patched Microsoft vulnerability to encrypt user data until a ransom was paid. Thousands of organizations around the world found themselves unable to access their data unless $300 in Bitcoin was paid in response. The ransomware debacle has seen cyber security stocks soar as companies rush to invest and protect future data breaches. Businesses shamelessly rocking 2003 antivirus programs have been shown the importance of regularly updating both their software and firewalls.
In other news, Cisco announced that they will be cutting 1,100 jobs on account of poor fiscal quarter results. Reports from their third fiscal quarter 2017 show a 1% decline in revenue year-on-year to $11.9 billion. The move has come as part of a wider trend of downsizing occuring on account of a decline in sales. Cisco’s future seems uncertain, but after sustained investment in cloud services and artificial intelligence, it is more than likely that the organization will be able to regain its losses.
Coinciding with the ransomware attack, UK Prime Minister Theresa May announced that the Conservative party manifesto would seek to take a leading role in internet regulation. The manifesto expresses a commitment to penalizing companies that fail to take down offensive content or protect children from pornography. Under the proposed policy,ISPs that fail to adequately address terrorist propaganda videos would be subjected to fines. The manifesto hints at a desire for the rest of Europe to take a more proactive approach in internet regulation and hold internet service providers responsible.
The International Ransomware Attack
Last week the news broke that a widespread ransomware attack was launched on users across the world with hackers distributing copies of malware that made use of security vulnerability in Windows. The vulnerability was patched in 2017 but that did not stop the malware from spreading to over 150 countries. The ransomware encrypted user data so that it could not be accessed and demanded $300 worth of the crytocurrency Bitcoin for users to access their information. Thus far, over 200,000 users have been affected.
The ransomware outbreak has coincided just as the value of Bitcoins has risen. At this moment, Bitcoin is more valuable than gold. This month, Bitcoin has risen 55% to $1,900 - $600 more than gold’s current trading value. Even though Bitcoin has a wide range of legitimate applications, it has become a popular hangout for cyber criminals on account of its emphasis on user anonymity. The currency mining process of Bitcoin is completely unregulated, and as a result, there are a substantial number of users utilizing the system for criminal activity. It remains to be seen if the ransomware hackers will be caught. Unfortunately, we will continue to see similar attacks in the future, so companies must remain vigilant.
Cisco Cuts Over 1,000 Jobs
On Wednesday, Cisco announced that it would be cutting 1,100 jobs as part of a restructuring plan. The announcement coincided with the negative sales growth of Cisco’s third fiscal 2017 quarter, which revealed a consistent 1% yearly decline to $11.9 billion. Cisco’s stock dropped by 8%, the largest drop since November 2013. According to Garner, Cisco’s overall server sales are down with Dell and HPE leading the market. Most of Cisco’s UCS revenue comes from blade server sales and not rack severs. Cisco’s 2017 cuts have come as part of an overall period of decline. In August 2016 5,500 jobs were cut due to a decrease in expected profits.
It’s hard to know what this decline means for the future of Cisco, as the company has been actively investing in the cloud computing and artificial intelligence markets for some time. Such moves will surely pay dividends in the future, so the downsizing appears to have been a tactical decision to wait until they have solidified their brand penetration into newer software markets. This episode highlights that even industry giants can fall on hard times in todays diversified and fast-paced market. Social media giant Snapchat saw shares falling 25% in value this month even after Snapchat was valued at $28 billion earlier this year. Clearly, even the largest organizations are not immune to market fluctuations.
UK Government Reaffirms Commitment to Internet Regulation
The release of the Conservative manifesto this week highlighted the UK Conservative party’s commitment to further regulate the internet with a ‘digital charter’ to determine how to protect users from offensive content. If successful at the ballot box, the manifesto would seek to facilitate the creation of tools to allow young people to delete their social media history when they turn 19 and to also keep pornography out of the reach of children. In addition, the manifesto directly addresses critics that argue the government should not have the ability to regulate the internet stating, ‘it is for government not private companies, to protect the security of people and to ensure the fairness of the rules by which people and businesses abide’. Laying out the plans comprehensively, the manifesto indicates an interest in leading an international drive towards further internet regulation and a ‘new revolution’.
In addition to the increase in censorship, the manifesto declared that it would be “pushing internet companies to deliver on their commitments to develop technical tools to identify and remove terrorist propaganda”. In practice this means that firms who take a laissez faire attitude towards offensive content will be subjected to penalties if they fail to comply with the proposed legislation. A sanctions regime would be used to “ensure compliance” with fines handed out to companies who fail to comply with the law. If Conservatives win the election, it will be interesting to see how far they embrace internet regulation in the futur and whether other countries in Europe follow suit.