San Fran Bay Area Firms Tap the Deep Draw of Homeland Security Market

A4, SafeView others grow like crazy as security explodes into a multi-billion industry

"Other governments sit down and figure out what they're going to do and do it, but in the U.S., we tend to argue about the right way to do it," Rowe said.

GE Security's Homeland Protection Business, which is an investor in SafeView, is tackling the big picture of security check points as it lobbies legislators and the Transportation Security Administration. It developed a "check point of the future," which integrates a series of machines it has both developed and bought, such as its $900 million acquisition last year of Newark-based InVision Technologies, maker of luggage bomb detection machines.

In one version of its vision, passengers would step through a portal that uses technology to detect tell-tale traces of weapons or drugs, a machine developed by GE that currently is in use right now at the Boston Logan International Airport. If the machine senses something suspicious on a passenger, the passenger could be sent through another portal, the one developed by SafeView.

Led out of GE's Newark offices, the company is also trying to shrink the luggage bomb detection machines originally created by InVision, so that they can be used for purses and carry-on bags. After Sept. 11, InVision had been one of only two companies certified to supply airports with machines to check luggage for explosives, using medical CT-scan technology. It won millions of dollars in government contracts, its machines installed in the majority of the nation's metropolitan airports, including San Francisco International Airport, Oakland International Airport and Mineta San Jose International Airport.

But now as that market reaches saturation, GE is shifting its focus to checkpoint security. It believes it can make checkpoints safer and more efficient, reducing the number of employees needed, one of the main costs in the current budget. "We are chomping at the bit to see the full fruition of the check point of the future," said Michael Cavanaugh, chief market officer of homeland protection at GE.

For Pleasanton-based Microfluidic Systems, the demand is more immediate. To keep tabs on air quality, the government currently relies on technicians to collect air samples and test them in a laboratory.

Microfluidic landed two contracts totaling about $7 million from the Department of Homeland Security to develop machines that check the air automatically. One acts like a smoke detector for airborne pathogens, alerting people quickly that something suspicious is in the air. Another operates on a slower timetable, to analyze and identify just what is in the air. If all goes well, the machines could be deployed in about five years, but the company is under pressure to produce results faster.

"It's a pretty aggressive technology development program," said CEO Allen Northrup. "There is pressure to replace (the current method). The cost is real, every day."

The good news is that government, on local, state and federal levels, has made strides, as have businesses seeking to protect their offices and employees. They are laying the groundwork, buying the appropriate hardware and software that support the new technologies. Pleasanton's Documentum, a subsidiary of EMC, has seen a burgeoning business supplying its software to help store, manage and search through reams of surveillance video. CompuDyne Corp.'s Public Safety and Justice unit, headquartered in Fremont, has sold software to local municipalities like Union City, Fremont and Hayward, which helps dispatch police officers, firefighters and other emergency workers and aid them in analyzing clues and sifting through data.

"That's the only thing holding up new technology, you need to get the infrastructure in place," said Niloo Howe, principal at Paladin Capital Group, a venture capital firm whose roster includes former CIA director James Woolsey and Lt. Gen. Kenneth Minihan, former director of the National Security Agency. Howe, an investor in SafeView, sits on the company's board. "People need to figure out what their plan is. ... The good news is it only needs to happen once."