Sunday, September 6, 2009

How Team of Geeks Cracked Spy Trade

Via -

From a Silicon Valley office strewn with bean-bag chairs, a group of twenty-something software engineers is building an unlikely following of terrorist hunters at U.S. spy agencies.

One of the latest entrants into the government spy-services marketplace, Palantir Technologies has designed what many intelligence analysts say is the most effective tool to date to investigate terrorist networks. The software's main advance is a user-friendly search tool that can scan multiple data sources at once, something previous search tools couldn't do. That means an analyst who is following a tip about a planned terror attack, for example, can more quickly and easily unearth connections among suspects, money transfers, phone calls and previous attacks around the globe.

Palantir's software has helped root out terrorist financing networks, revealed new trends in roadside bomb attacks, and uncovered details of Syrian suicide bombing networks in Iraq, according to current and former U.S. officials familiar with the events. It has also foiled a Pakistani suicide bombing plot on Western targets and discovered a spy infiltration of an allied government. It is now being used by the Central Intelligence Agency, the Pentagon and the Federal Bureau of Investigation.

Yet Palantir -- which takes its name from the "seeing stones" in the "Lord of the Rings" series -- remains an outlier among government security contractors. It rejected advice to hire retired generals to curry favor with the agencies and hired young government analysts frustrated by working with slow-footed technology. The company's founders knew little about intelligence gathering when they started out. Instead, they went on a fact-finding mission, working with analysts to build the product from scratch.

"We were very naive. We just thought this was a cool idea," says Palantir's 41-year-old chief executive Alexander Karp, whose usual dress is a track-suit jacket, blue jeans, and red leather sneakers. "I underestimated how difficult it would be."

Technology like Palantir's is increasingly important to spies confronting an information explosion, where terrorists can hide communications in vast data streams on the Internet. Intelligence agencies are struggling to identify and monitor such information -- and quickly send relevant data to the analysts who need it. U.S. officials say the software is also crucial as the country steps up its offensive in difficult theaters like Afghanistan. There, Palantir's software is now being used to analyze constantly shifting tribal dynamics and distinguish potential allies from enemies, according to current and former counterterrorism officials familiar with the work.

"It's a new way of war fighting," says former Assistant Secretary of Defense Mary Beth Long. While there are many good systems, Ms. Long says, with Palantir's software "you can actually point to examples where it was pretty clear that lives were saved."

Palantir's chief rivals are I2 Inc., a 20-year-old software company with offices in McLean, Va., and a handful of defense contractors who have been building software for intelligence agencies for years. I2's general manager, Todd Drake, dismisses his upstart competitor as "the new sexy thing," saying that Palantir won't be able to make lasting inroads in a government market that prizes the stability of established companies. Palantir CEO Mr. Karp says such criticism doesn't trouble him. He says the company is already expanding rapidly.

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