[2267] in cryptography@c2.net mail archive
Sun to hold Elvis+ export
daemon@ATHENA.MIT.EDU (EKR)
Mon Mar 9 21:23:15 1998
To: cryptography@c2.net
Date: Mon, 09 Mar 1998 16:48:34 -0800
From: EKR <ekr@terisa.com>
Today's WSJ has the following article on page B3
Sun Holding Off On Plans to Market Encryption System
By Don Clark
Staff Reporter of the Wall Street Journal
A controversial plan by Sun Microsystems Inc. to market Russian-made
encryption software is stalled, as the computer maker awaits findings
of a U.S. government inquiry that has dragged on for nine months.
The Palo Alto, Calif. company in May announced a plan to market
data-security software developed by Elvis+ Co., a company formed by
scientists from the former Soviet apace program. Sun, which holds a
10% stake in Elvis+ planned to ship the software to foreign customers
from distributors outside the U.S.
Sun's move attracted wide attention because it seemed to fall
outside the jurisdiction of U.S. regulatory agencies, which control the
export of powerful encryption software on grounds that terrorists and
others could use them to foil wiretaps. Nevertheless, the U.S
Commerce Department began a review of Sun's plans, examining Sun's
contention that Elvis+ received no technical assistance form Sun that
would make the encryption software subject to U.S. export controls.
Encryption, which scrambles data so it can't be read by
unauthorized people, has triggered bitter arguments between high
technology concerns and the Clinton administration. Silicon Valley
companies argue that they are losing technology sales to foreign
companies that aren't subject to U.S. controls.
The Commerce Department won't discuss the status of the Sun
review. Sun executives say it has held up plans to market the
software, which was expected to become available last August. John
McFarlane, a Sun vice president in charge of software products, said
he is encouraged by signs that the agency has uncovered no
irregularities in Sun's dealings with Elvis+.
But Mr. McFarlane declined to comment on whether Sun will
persist in trying to market the product, in view of a delay that
could continue for some time. "We've made no statements about that,"
he said. "We are examining all of our options."
Lawyers had advised Sun that it could market the software
without getting U.S. government permission. But Sun, a major computer
supplier to the U.S. government, felt an obligation to be a "good
citizen" and respect the Commerce Department's concerns, Mr. McFarlane
said.
Meanwhile, the Sun executive who led the effort to market the
Elvis+ software has resigned to start an Internet security company
with Alexander Galitsky, a well-known Russian scientist who founded
Elvis+ and its president. Humphrey Polalen, who had been general
manager of Sun's network-security products group said he will be chief
executive officer of the start-up, which will be based in Europe and
will employ much of the Elvis+ software development team. SunWorld, a
trade publication, first reported Mr. Galitsky's plans to team up with
Mr. Polanen.
--
[Eric Rescorla Terisa Systems, Inc.]
"Put it in the top slot."
