Tech firms adapt to battle against terrorism

SAN FRANCISCO -- Companies in the high-tech industry, anticipating an upswing in demand as law enforcement calls for the development of modern intelligence technologies, are adapting commercial products to serve any coming battle against terrorism.

Among companies that have quickly begun tinkering with their business strategies since the Sept. 11 terrorist attacks is Narus Inc. in Palo Alto, Calif. In the past two weeks, the start-up has begun marketing its network-analysis software as a sophisticated surveillance tool. For several years, the technology has been used by Internet-service providers, like AT&T Corp. and WorldCom Inc., to help bill customers for the amount of bandwidth they use, or to detect fraud, such as a customer using an Internet connection to run a Web business when it is paying only for noncommercial use.

That same technology can be used to police e-mail and other Internet communications for suspicious activity like messages traveling to a specific country within a specific time. Narus's chief executive, Mark Stone, says the technology is faster and more efficient than existing electronic-surveillance technologies used by law enforcement, such as the Federal Bureau of Investigation's Carnivore technology, though he concedes that he has never watched Carnivore in operation himself. Electronic-surveillance systems may be able to tell only so much, though, if suspects use commonly available encryption systems to scramble messages.

Since the terrorist attacks, Stone said he has spoken with the FBI once about the surveillance features of the company's products and is also talking to systems integrators who could install the product on the networks of Internet service providers. The irony of the company's new emphasis on security, Stone said, is that he founded the company four years ago with that focus, but Internet providers didn't bite. "Up until Sept. 11, there wasn't the interest there," he said.

HNC Software Inc. in San Diego is best known for providing sophisticated software that helps the credit-card and insurance industries detect fraud by monitoring for activity that matches profiles of suspicious behavior. Following the terrorist attacks, the company has been discussing ways of using the technology to identify "high-risk passengers" with a company that installs information systems for airlines, said Joseph Sirosh, an executive director at HNC. Sirosh said executives at the company had authorized him to look at the company's entire portfolio of products to adapt them for counterterrorism measures.

And just a month before the events of Sept. 11, HNC signed a three-year contract with the Defense Department to develop software that could help health-care workers more quickly identify outbreaks resulting from biological terrorism by detecting patterns within bacterial DNA.

A 'short-lived blip'
Just don't expect another Silicon Valley boom. While some industry veterans think pockets of the technology industry might see a surge in business, they believe it will be a small and short-lived blip compared with the dot-com economy that now seems like a distant memory in Silicon Valley.

"It's sort of the plowshares-into-swords theory," says Paul Saffo, director for the Institute for the Future, a Silicon Valley think tank. "Remember those black-and-white newsreels with auto factories switching to bombers? It ain't going to be like that this time."

William Crowell, a former deputy director of the National Security Agency, predicts several areas within the high-tech industry will receive increased interest from potential customers and investors, including companies that provide identification systems such as facial recognition, fingerprint and other so-called biometric technologies. Intrusion-detection technologies that watch for hacker break-ins on corporate networks are another to watch, he said.

"Silicon Valley always responds to new needs," says Crowell, now chief executive of cryptography software company Cylink Corp. Santa Clara, Calif. "There are thousands of people here who are idea people and will generate new methods and new businesses. On the other hand, a lot of them will not pay off."

Of course, increased investments by industry or law enforcement in electronic surveillance and other intelligence-gathering tools are sure to add fuel to the national debate over risks to personal privacy and racial profiling. Last week, Larry Ellison, chairman of database maker Oracle Corp., made headlines after he suggested the creation of a national identification card that would store reams of personal information and be presented by individuals at airport check-in counters and elsewhere.

But some longtime Silicon Valley executives, even ones that might benefit by providing some of the underlying technology for an ID card, doubt such a technology would help. "The infrastructure needed to do this is huge," said Jim Bidzos, the chairman of VeriSign Inc. and vice chairman of security concern RSA Security Inc. "The security issues are not entirely understood. A system like this could be a sieve. It could make it easier for terrorists to do what they want to do."