Vendors struggling with the IT slowdown have a major opportunity in supporting the ‘War on Terror’. In particular, knowledge management vendors, who had been suffering in a commoditized market, are seeing interest from the intelligence agencies. However, dealing with the government requires very different strengths from those found in Silicon Valley.
The US government has dramatically increased its spending on homeland security.
Following the perceived failure of US intelligence to anticipate the September 11 attacks, the federal government has dedicated $10.6 billion to homeland security. It may also relax privacy laws to improve intelligence agencies’ access to emails and other online materials.
Yet security agencies seem to have difficulty controlling and understanding the colossal quantity of data they already have. Federal organizations often do not have access to data held by other federal agencies; nor can they fully search their own data for hidden messages. Legacy systems’ inability to deal with non-European languages makes matters worse.
The combination of need and funding clearly creates an opportunity for knowledge management vendors. Many search vendors, including Excalibur, Autonomy and SER, began by providing technology for intelligence. As private sector revenues dry up (and as Google’s dominance edges them out of consumer searching), mainstream search engines such as Inktomi and CMGI’s AltaVista are joining the fray: AltaVista now gets 25% of its revenue form the government sector.
Verity, meanwhile, recently helped the US Air Force to integrate information from hundreds of USAF websites – the first step in enabling it to communicate with other branches of the military and other government groups.
There is also scope for vendors outside the search engine space. Documentum and Hummingbird can provide their knowledge organization tools to large security organizations, while business intelligence vendors such as SAS and SPSS should find a market for their analytical data-crunching tools.
But while homeland security is a major opportunity in a weak IT market, it is also a challenge. Despite the parallels, the needs of government are different and much more exacting those of private industry. As defense personnel are fond of saying, when we make mistakes, people die.
Selling into government is a new hurdle for vendors used to the private sector, with longer sales cycles and different selection criteria. They may find themselves outsold by traditional defense vendors with a better understanding of the government mindset.