Buy vs. Spy

Face it, the commercial market pays more than intelligence agencies.

Forget all that spy stuff. Ever since the government put the kibosh on $900 hammers, vendors have discovered the real money is in the commercial market, particularly for apps formerly developed for government agencies.

One of the hottest applications these days is one that can manage all varieties of data, allowing companies to use it whether its a picture on the Web or an internal e-mail message. The basic process is pattern recognition, which has a long heritage in the law-enforcement and spy-agency worlds.

Scary Stuff Autonomy, for example, which makes data-management software that can sort through a mass of information to find whats relevant to a company, had its origins in matching fingerprints for the British government. From there it jumped into the text world, matching statements made in different dialects by running them through an artificial-intelligence engine.

"This started out as really scary stuff," says David Appelbaum, general manager of Autonomy in San Francisco. But he says the current effort to integrate back-end data with relevant data on the Internet is far more complex and interesting as a commercial venture.

Nor is Autonomy alone in that space. IBM has played heavily in the fingerprint and pattern-recognition arena for years, and five years ago developed a database for matching images. The big money for IBM always has been in the commercial space.

"If you can transform data, why not collect it and analyze it," says IBM senior VP Steve Mills. "This is pattern analytics. Its also used with brain scans, video libraries and audio libraries. We do all the looks like."

Its a Pattern Lucent Technologies Bell Labs division likewise has been working on pattern recognition for years, but the company licenses it to other corporations and government agencies rather than trying to create products itself.

Even where the main goal isnt commercialization of technology, the lines between developing technologies for the commercial and government markets are blurring.

The Central Intelligence Agency, through a venture startup subsidiary it created two years ago, has invested in nine companies. In-Q-Tel, the CIA funded nonprofit venture capital firm, was launched to allow the spy agency to invest in and shepherd certain promising technologies that would benefit government agencies.

The firm evaluates commercial software in areas that include search technology, link analysis and the handling of large sets of data in classified architectures.

In its latest investment, In-Q-Tel last week took an undisclosed equity stake in SafeWeb, a California-based firm that has developed a product called Triangle Boy, which promises users anonymity over the Internet. SafeWebs Web site provides free access to an "anonymizer" that lets anyone surf anonymously and securely.

SnoopWare So far, In-Q-Tel has invested in government integrators and startups that include Browse3D, Graviton, ICSA, MediaSnap, SAIC, Open GIS Consortium Inc., TecSec and Twisted Systems.

Defense and commercial electronic specialist Raytheon, by contrast, is pushing in the other direction, transforming military technologies for commercial use. The companys electronics products range from portable infrared wireless cameras to digital ruggedized displays.

Other currently available technologies with strong military roots include virtual reality headsets, voice recognition and satellite communications.

At the University of California/Berkeley, researchers have proposed yet another technology that could lend itself to both military and nonmilitary applications. Known as SmartDust, this technology is designed to enable communications among tiny particles known as "mobile autonomous devices."

Now there may even be money to be made in dust.

This story was reported by Ed Sperling, Jerry Rosa & Jacqueline Emigh.