[ISN] Study: CIA's In-Q-Tel 'worth the risk'

From: InfoSec News (isnat_private)
Date: Wed Aug 08 2001 - 01:40:55 PDT

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    Forwarded by: William Knowles <wkat_private>
    August 07, 2001
    WASHINGTON -- The CIA's private-sector IT research and development
    firm, In-Q-Tel Inc., faces significant hurdles in breaking through the
    agency's secretive culture, but by most industry standards the
    two-year old start-up has "a good track record" and is "worth the
    risk," according to a report (download .pdf) released today by an
    independent panel of experts.
    The report by the 30-member Independent Panel on the Central
    Intelligence Agency In-Q-Tel Venture, called for by Congress as part
    of the fiscal 2000 Intelligence Authorization Act, concluded that
    In-Q-Tel's business model "makes sense," but stopped short of
    recommending that the firm's charter be expanded to other agencies.
    "It is unrealistic to expect such a venture to have produced strategic
    change at this point, but In-Q-Tel has achieved significant early
    progress," the report concluded. "To date, In-Q-Tel has reviewed
    hundreds of business plans, made more than a dozen investments,
    brought five technologies and services to the Agency for use or
    demonstration, and has implemented three pilots since its charter was
    signed in July 1999. By private-sector standards, this represents a
    noteworthy accomplishment."
    The Washington-based think tank Business Executives for National
    Security (BENS) managed the panel's work and development of the final
    report. The panel was comprised entirely of industry representatives,
    including Kenneth Novack, vice chairman of AOL Time Warner Inc.;
    Thomas Wessels, vice president of Merrill Lynch & Co.; and Raphael
    Benaroya, chairman and CEO of United Retail Group Inc., among others.
    The CIA created In-Q-Tel in February 1999 with $28 million in venture
    capital. The goal was to tap into the private sector's technology
    expertise and deliver new commercial technologies to the CIA more
    rapidly. In-Q-Tel does that by investing in cutting-edge technology
    firms that normally wouldn't do business with the government.
    Just last month, Computerworld reported on an internal agency memo
    that questioned the CIA's usefulness, concerns that In-Q-Tel is
    partially aimed at addressing (see story).
    Gilman Louie, In-Q-Tel's CEO, said he's very pleased with the report,
    which credits him with expanding In-Q-Tel's outreach to firms
    developing innovative technologies.
    "The value proposition to the agency is clearly the technologies,"
    said Louie. To date, In-Q-Tel has created more than 60 major venture
    funds with private IT companies, "70% to 80% of which the agency has
    never had contact with," he said.
    That exposure has led to the injection of five major technologies and
    services into the CIA's IT architecture. Of note has been the
    Presidential Information Dissemination System (PIDS), an electronic
    briefing tool used by analysts to brief the president-elect during the
    transition period from one administration to another. In addition,
    PIDS serves as the basis for the CIA's iWeb program, which aims to
    develop a Web-based portal for analyst groups.
    Although PIDS doesn't currently have a commercial use, In-Q-Tel is
    working with Fairfax, Va.-based SRA International Inc. and Fuji Xerox
    Co. to commercialize portions of the system, according to the BENS
    In-Q-Tel's commercial partners credit the firm with not only fueling
    technology innovation in the market, but also creating a new "seal of
    approval" for firms to attach to their products.
    For example, in February, In-Q-Tel commissioned SafeWeb, a leading
    privacy technology developer based in Oakland, Calif., to create an
    Internet privacy and security product to protect confidential
    communications. Jon Chun, president and co-founder of SafeWeb, said
    his company's relationship with In-Q-Tel has been critical to its
    technology development.
    "It has put SafeWeb and our technologies through the rigors of the
    CIA's stringent review process, which far exceeds those of the
    ordinary enterprise client," said Chun. "This is a very significant
    seal of approval."
    "In-Q-Tel wants us to be successful in the commercial market with
    really solid technology for the future," said Mahendra Vora, CEO of
    Intelliseek Inc., a Cincinnati-based firm that has used In-Q-Tel
    funding to develop future Web-based intelligent agent and knowledge
    discovery technologies. "That was my No. 1 attraction," said Vora. He
    added that the initial development meetings with In-Q-Tel officials
    presented him with "the toughest technical due diligence I've ever
    been through."
    While that seal of approval can be difficult for vendors to achieve,
    In-Q-Tel has also found it difficult to convince some CIA employees
    that there is a benefit to opening the agency to the private sector.
    Some view the CIA's funding of In-Q-Tel as a tax on CIA funds,
    according to the BENS report.
    Members of the CIA's 13-member In-Q-Tel Interface Center (QIC), which
    is responsible for marketing In-Q-Tel-developed technologies within
    the agency, told the panel that they have run up against "resistance
    to change" and the "not invented here syndrome" among some agency
    "Every agency has its own culture," said Louie. "But what breaks
    through those walls is success. Every time we put a technology in the
    agency, word begins to spread."
    The BENS report recommended to Congress that another review of
    In-Q-Tel progress not be conducted until the end of its initial
    charter in 2004.
    "Communications without intelligence is noise;  Intelligence
    without communications is irrelevant." Gen Alfred. M. Gray, USMC
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