Lenovo PCs national security issue raised by US Government

Stan Beer
Monday, 22 May 2006 09:02

IT Industry - Strategy

China'S largest PC maker Lenovo has run into a huge political brick wall in the US, with the US Government raising questions about the security of using PCs from the Chinese company in classified areas. Lenovo, although publicly traded, is controlled by a company called Legend which in turn is controlled by the Chinese Government.

In what could well escalate to a diplomatic row, the US State Department has declared that none of 16,000 computers it has purchased from Lenovo will be used in classified areas. The US Government is reportedly concerned that Lenovo PCs it buys may contain hidden spyware that could be used to gather classified intelligence.

What's more, according to an Associate Press report, the State Department has said in a letter to Republican Congressman Frank R. Wolf, who raised the Lenovo issue, that it will change the way it buys technology in future to ensure security is not compromised. This suggests that Lenovo may be left out in the cold when future US Government PC tenders are up for grabs.

In the ultimate irony, a significant proportion of Lenovo, 18.9%, is owned by the US and world's largest IT company IBM, which sold its PC division to Lenovo in 2005 for US$1.25 billion.

So far, there has been no public response from the Chinese Government to the actions taken by the State Department. However, Lenovo itself has issued a strong rebuttal to suggestions that its computers could be used in spying, saying the Chinese Government is not involved with the operations of the company.

The Lenovo controversy in the US Government also raises questions concerning the policies of other Western nations when it comes to buying PCs for government installations from the Chinese Government controlled PC maker. Spyware is a huge issue and Western governments could be wary of using PCs produced by a company controlled by the Chinese Government in a range of sensitive areas such as defence and even treasury.

While there is no suggestion that there is a connection with the latest State Department action, a few eyebrows were raised last month when Lenovo was left off a list of six PC manufacturers named as preferred suppliers to the Victorian Government in Australia. The announcement effectively locked Lenovo out of doing business with Australia's second largest state for the next five years.

In all Western nations, the government sector is a huge consumer of IT resources, sometimes accounting for 40% or more of the national IT spend. Being locked out of the governments of Western nations is something that no PC manufacturer can afford.