Egypt 'Net Shutdown: Wake-up Call for CIOs

Analysts say any government could shut down Internet access in a national emergency, so IT execs need a plan of action.

Egypt's crackdown on Internet use use amid huge anti-government protests should serve as a warning that CIOs around the world must create contingency plans to deal with the potential shutdown of critical infrastructure.

The Internet was mostly inaccessible to Egyptians for about five days. Citizens began reporting the widespread return of online connections last Tuesday.

Virtually any government in the world can temporarily nationalize and control critical infrastructure, which includes mobile networks, fixed-line telecommunications and Internet backbone systems, during natural disasters, terrorist attacks or any other national emergency, said Eric Paulak, an analyst at Gartner Inc.

"This scenario isn't so far-fetched," he said. "It's just that you don't necessarily hear about it."

The potential loss of Internet access is especially serious to the many IT organizations that are turning to cloud-based systems to run key corporate or government applications, said Michael Osterman, an analyst at Osterman Research Inc. "If organizations are reliant on cloud-based services, this would be a critical problem."

"Companies doing business in any country should assess potential loss of Internet access as part of their risk management strategy and factor it into the cost of doing business," said Rebecca Wettemann, an analyst at Nucleus Research Inc.

The analysts suggested creating offline capabilities for cloud-based systems and providing key users with access to backup satellite-based phones and Internet access during emergencies.

IT executives based in Egypt said the widespread protests and the government's response disrupted the country's growing tech operations.

Yahia Megahed, vice president and supervisor of the Egyptian branch of Symbyo Technologies Inc., a U.S.-based IT services firm, said some workers there were able to access the Internet via proxies, but most had no recourse. The shutdown "definitely affected" the business, he added.

The Egyptian government has been aggressively selling the country as an outsourcing destination.

Hewlett-Packard Co., one of the 120 companies located in Cairo's eight-year-old Smart Village IT office park, told its workers to stay home during the protests. Microsoft Corp., which also has an office in the park, said in the midst of the protests that much of its call center activities run from Egypt had "been largely distributed to other locations."

IBM, Oracle, Indian outsourcer Wipro and other top companies have also set up shop in Smart Village.

"The country has invested millions to promote its capabilities -- and now that investment is looking under threat," said Phil Fersht, CEO and head of research at HfS Research, an outsourcing research and advisory firm.

Megahed, though, is confident that Egypt will remain attractive to high-tech firms. "Egypt is considered, despite what happened this week, to be a stable country," he said.

Perez is a reporter for the IDG News Service. Martyn Williams of the IDG News Service and Gregg Keizer contributed to this story.

Copyright © 2011 IDG Communications, Inc.

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