New York-based technology firm Verint Systems recently launched a product
called "IntelliFind" that claims impressive capabilities. The system is
designed to be attached to the phone lines at a company's call center, where
it silently monitors every telephone call, and -- using advanced voice
recognition technology -- picks out conversations in which certain keywords
are spoken, dumping a digital recording into a searchable database. "You can
decide you want to see all the calls where product 'xyz' was mentioned, and
then you can pick one and listen to that entire call," says Alan Roden,
Verint's VP of corporate development.
If IntelliFind sounds like something that would normally be found on a
supercomputer humming in an NSA basement, there's a reason. Behind business
intelligence offerings like IntelliFind, and a line of networkable video
cameras, Verint is a leading maker of electronic surveillance equipment and
software for the United States and other governments. And it turns out that
while other technology firms are struggling in a down economy, the business
of helping governments with their spying may be a growth industry. In
quarterly results announced Wednesday, Verint, a subsidiary of Comverse
Technology, posted record sales of $42 million for the fourth quarter of
fiscal year 2002 -- the company's third straight quarter of growth since
going public in May 2002.
"During the year we believe that a greater interest in gathering
intelligence to prevent criminal activity by government and law enforcement
agencies resulted in greater demand for our communication interception
solutions," said company president Dan Bodner in a conference call for
analysts. "Over the past year we enhanced our competitive position by
entering new markets, expanding our customer base, and introducing new
capabilities for the analysis of content and culled data collected from
wireline, wireless and data networks."
Among those new markets was an unnamed country "in the Latin America region"
whose government recently placed a multi-million dollar order for
communications interception systems, said Bodner.
Bodner didn't say what the Latin American government bought with that money,
but the mainstay of Verint's electronic surveillance business is its
"STAR-GATE" and "RELIANT" products, which operate on the supply and
consumption sides of domestic spying respectively. The RELIANT system acts
as a government agency's big ear, collecting and managing intercepted
voice, e-mail, fax, SMS, data, chat, and Web browsing -- all on a single
platform. On the delivery side, STAR-GATE does the actual wiretapping, and
is primarily marketed to telephone companies trying to comply with the 1994
Communications Assistance for Law Enforcement Act (CALEA), which requires
telecommunications carriers to keep their networks wiretap friendly for the
FBI. An ISP version of STAR-GATE lets Internet providers conduct lawful
surveillance of their customers and send the intercepted data to law
enforcement over private networks.
PATRIOT PROFITS. With recent legislation and court decisions granting U.S. law enforcement agencies greater spying powers than they've had since the Nixon
administration, government surveillance solutions look like a good bet, and
other technology companies are getting in on the game. Last Fall, VeriSign
launched its "NetDiscovery" service -- a turnkey CALEA solution for
telephone companies that sends intercepted communications to law enforcement
over a national IP-based network, using Verint STAR-GATEs for the taps. And
last August, computer security company Network Associates got into the
Carnivore business with its acquisition of Utah-based Traxess, makers of the
"DragNet" Internet spy tool.
And for every company that makes the news with a surveillance system, there
may be countless more that nobody's ever heard of. When the non-profit
Electronic Privacy Information Center recently obtained a list of companies
vying for a piece of the Defense Department's "Total Information Awareness"
computerized spying project, the list of bidders included nearly as many
obscure companies as it did brand name defense contractors. "It looks like
there's this whole world of these little security technology companies that
are probably doing well these days," says EPIC attorney David Sobel.
But Gartner analyst John Pescatore isn't convinced that there's big money in
domestic surveillance. Instead, he says, the real opportunities are in
helping the U.S. perform surveillance internationally. Indeed, according to
its quarterly report, Verint has a subsidiary that provides communications
interception solutions to what's described demurely as "various U.S.
government agencies." The subsidiary's offices hold a facility security
clearance from the Defense Department, and are located in Chantilly,
Virginia, a stone's throw from most of America's intelligence agencies.
"Certainly with the USA-PATRIOT Act and all this homeland security stuff,
there's been more effort in domestic collection," says Pescatore. "But the
domestic type money has been a lot slower to start flowing than the national
intelligence stuff... There's been definite growth there." By Kevin Poulsen