When terrorists crashed jumbo jets into the World Trade Center, Pentagon and a Pennsylvania field on 9/11, the economic impact sent the stock market tumbling and forced government agencies to rethink their approach to security.
Five years later, Bay Area companies like GE InVision Inc. of Newark, Fremont's SCM Microsystems and ILOG in Mountain View have seen their businesses grow along with the demand for a more secure physical and digital world.
One of the U.S. government's first priorities after commercial jets were hijacked and piloted to devastating crashes was to improve airport security. Congress rushed into law the Aviation and Transportation Security Act which required, among other things, that all U.S. airports scan every piece of passenger luggage for explosives.
For then-tiny InVision Technologies Inc., a specialist in explosive scanning technology, the congressional directive meant an exponential increase in sales as airports upgraded their security.
In short order, InVision was acquired by General Electric Co. and became the core of GE Security, a $2 billion business with homeland protection as its centerpiece.
"The InVision business had quite a spike in activity post 9/11 from the government buying 20 to 30 systems a year to many hundreds a year," said Michael Cavanaugh, chief marketing officer for GE Security's homeland protection. Now, "there are literally thousands of these systems all over the world."
But after 9/11, a sense of vulnerability permeated every aspect of government, civilian and business life -- not just airports. Federal agencies moved to improve security -- and secrecy -- around data housed in their computer networks. Some Bay Area technology companies found new customers in the federal government and an intelligence community with a fresh sense of urgency.
Hayward-based Authenex Inc., which makes computer network security systems that require users to pass through two or more layers of authentication before they can get access to a network, found the market it was seeking.
"Since 9/11 we've seen the government and enterprises (large businesses) pay more attention to information security. We've definitely seen more business," said Authenex vice president William Chen. In fact, the Department of Homeland Security -- which didn't even exist before 9/11 -- is one of Authenex's customers, as is the Department of Defense.
Network Chemistry, a Redwood City wireless network security firm, pulled in $5,904,000 in venture capital in the second quarter of 2005. Brian de Haaff, a vice president at the company, said changes in regulations within the federal government have brought in a steady flow of contracts since 9/11.
"The growth has been tremendous," de Haaff said.
His company produces hardware and programs that monitor wireless networks for rogue access points and unauthorized devices. If someone walks into a Department of Energy building with an unknown laptop and tries to hook into the network, de Haaff said, the system fools the computer into thinking it has a signal while blocking it from accessing anything. Meanwhile, the system alerts an administrator to the problem.
"Organizations have a hard time controlling data communications," he said. "The old perimeter is no longer there. It's basically Swiss cheese."
David Wagner, an assistant professor of computer science at the University of California, Berkeley, said the military's interest in network security has been on the rise as more government and commercial systems running power plants and other potential terrorist targets become automated.
"Having critical infrastructure up and running is a national security issue," he said.
ILOG Inc. of Mountain View, the U.S. division of ILOG SA of France, sells business analytics software now widely used for intelligence purposes.
ILOG is "helping the Department of Homeland Security identify risks," said Chief Executive Officer Pierre Haren. "Our software is used to enable intelligence analysts to model risk profiles and use them to screen data that can come from many sources."
U.S. ports, for instance, install ILOG's software to screen data coming on the manifest of container ships for potential security risks. The software matches that data against U.S. intelligence profiles of destinations and senders that may raise red flags.
Intelligence agencies use ILOG's technology "to manage risk profiles in real time, so that if an event comes along they are able to respond very quickly and (act) in a matter of minutes," Haren said. Another ILOG application helps manage how that information is shared among various intelligence agencies, including determining access to the data.
In Fremont, SCM Microsystems builds the card readers that end up attached to computers and doorways at government and military installations.
"Most of the interest has been from the Department of Defense," said Bob Merkert, a vice president with the company. He said directives from the Pentagon and President Bush have mandated an increase in network and physical security, including required "smart card" identification systems for government workers.
The new identification cards use an embedded digital photo and a fingerprint encoded into the card. In some government offices, a fingerprint reader matches the user's physical print to the digital one contained in the smart card.
Merkert said the company's sales have increased since the smart cards became a mandatory security layer and not just an option.
The federal government works to develop new technologies by funding operations like DARPA, the Defense Advanced Research Projects Agency. DARPA might be most famous for developing the computer network that became the Internet. A new funding agency was created in the wake of 9/11 -- the Homeland Security Advanced Research Projects Agency.
David Culler, an electrical engineering professor at UC Berkeley, said a series of DARPA programs funding wireless sensor research have been "a huge success."
Culler, on leave from Berkeley to work in industry, is the co-founder of Arch Rock, a San Francisco-based maker of tiny sensors that can gather and transmit information over an ad hoc wireless network independent of any conventional access points.
These wireless sensors can feel vibrations and changes in temperature, see, hear and they can even be programmed to smell certain gases. Culler said the sensors could have a variety of uses anywhere from battlefields to hospitals.
One government-connected group making more subtle moves in the Bay Area is In-Q-Tel, the venture capital arm of the Central Intelligence Agency. Working out of a nondescript Sand Hill Road office in Menlo Park, the firm carries out its mission of connecting the intelligence community to companies developing bleeding-edge technology.
Since its creation in 1999, In-Q-Tel has spent about $166 million to fund start-ups and university labs in California and elsewhere.
After 9/11, In-Q-Tel moved from dealing exclusively with the CIA to supporting the broader intelligence community. Eric Kaufmann, senior vice president and managing partner, said the change was part of the efforts to facilitate sharing information between intelligence agencies.
Kaufmann said some of the companies in In-Q-Tel's portfolio stepped forward after 9/11 to take on government projects for free.
"It was a real patriotic move," he said. "They really wanted to help our country."
In-Q-Tel works with the companies it funds to bring their products up to the "higher threshold" the intelligence community requires, Kaufmann said.
Like the CIA and Pentagon, the Department of Homeland Security has started its own research agency: HSARPA.
What's at the top of the list of the current requests for proposals posted at an HSARPA Web site? A call for information on the detection of liquid explosives.
