Will These Tech Companies Get Into the Spying Game?

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Late last month the Obama administration launched the Big Data Research and Development Initiative, a program whereby six federal departments and agencies are collectively committing $200 million to administer programs that help corral and analyze boatloads of data being collected every day.

The initiative has a mission of enormous scope: Take the massive amounts of data incoming from satellites, Internet searches, cellphone calls, surveillance cameras, and myriad other sources, and then somehow make sense of it. The purpose is unclear, but the results of these analyses are purported to be of the utmost utility for such areas as education, security, health and welfare, and other fields of benefit to mankind. Although it may sound like a new idea, it actually seems to be an extension of a program first floated by President George W. Bush in 2003. Back then it was called Total Information Awareness, and its main objective was to target terrorist activity.

Americans are sensitive about their privacy, and some parts of big data look a little scary. A recent article on Wired.com described in detail the hush-hush nature of a compound being built in Bluffdale, Utah, appropriately named the Utah Data Center. The facility is being constructed for the National Security Agency for a total of $2 billion. Its purpose is to collect and analyze mounds of communication data -- presumably for threats to national security. Some of these communications, it seems, will be personal emails and cellphone calls. The entire place will be populated with servers, and the building will be off the grid, with its own fuel tanks and generators to keep those machines humming at all times. The article estimates the annual cost of operation to be around $40 million per year -- evidence, it would seem, that the government is taking this program very seriously.


Indeed, it seems no secret that the Department of Defense is serious about using its portion of the big data funds to sniff out what it considers threatening bits of communication, and it wants to be able to use information gleaned from big data to detect cyber espionage. With equipment purchased from private enterprise, the government also plans to do some code-cracking, as well.

The program is upfront about its desire to partner with universities and industry, both to assist with the collection and mining of the available information and to make use of whatever useful bits of knowledge may evolve. Several titans of industry are quite involved in big data already and are sure to be tapped by the government.

Microsoft (NAS: MSFT) has been a big player in this field, and the Center for Medicare and Medicaid Services will soon be using a data system utilizing the company's Hadoop-based platform. The company recently spun off an open-source unit, possibly to avoid legal hassles as it continues to contribute to this type of software. The company has also just recently updated its big-data solution product, Windows Azure, which also uses Hadoop.

IBM (NAS: IBM) bumped up its own towering presence in big data with its purchase of Netezza a couple of years ago, thus acquiring its stable of data warehouse appliances. The company's Smart Analytics System seems an excellent match for the fed's project, as the server-data storage combo unit is particularly adept at helping entities tame disorganized blocks of data. Big Blue has also been snapping up analytics businesses -- 28 since 2005, according to TheStreet.com -- to put the finishing touches on its complete package of software, PureSystems, which collects, stores, and analyzes lots of data. The company has also just teamed up with Rutgers to collect and analyze information in many industries with the goal of increasing the competitiveness of New Jersey's research communities.

Another safe bet is data-storage leader EMC (NYS: EMC) , which has also been buying up data storage and analysis firms such as Greenplum and software development company Pivotal Labs in order to strengthen its position in the big data-storage world. This company has shown strong growth so far this year, reflected in a stock value that has increased by more than 28.4%. Oracle (NAS: ORCL) , the granddaddy of all database companies, would be another heavy hitter here. The company has obviously been getting ready for bigger data requirements: It launched a new big data appliance in October of last year. Though some observers think Oracle's products are a bit pricey, we're talking about government contracts here, so price probably wouldn't put it out of the running.

Lastly, I think Amazon (NAS: AMZN) could also get a piece of the fed's big data pie through its Mechanical Turk crowdsourcing division. Part of the initiative awards $10 million to a National Science Foundation study to be carried out at the University of California, Berkeley, to research how various information-mining techniques, such as crowdsourcing, may be used to pull gems out of the mounds of data the project will be collecting.

Big data means big money, and it will be growing by leaps and bounds, regardless of privacy concerns. I expect that most of the information gleaned will be used for profit, but there's a good chance that some of it will be utilized to improve educational and medical services. No matter how you feel about the big data initiative, it's a good idea to keep an eye on it -- and to know who the players are.

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At the time this article was published Fool contributorAmanda Alixowns no shares in the companies mentioned above.The Motley Fool owns shares of Oracle, EMC, Amazon.com, International Business Machines, and Microsoft.Motley Fool newsletter serviceshave recommended buying shares of Amazon.com and Microsoft.Motley Fool newsletter serviceshave recommended creating a bull call spread position in Microsoft. The Motley Fool has adisclosure policy.
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