The current topic of illegal surveillance by the government is definitely a topic of concern. NSA and others have been quietly recording everything we do in other ways as well.

The government market has acted at times like the rising tide that lifts all boats. Demand, particularly toward the end of a fiscal year, traditionally buoys technology suppliers. But fiscal 2005 has unfolded somewhat differently. The demand for products and services has been uneven. Some companies report soaring revenue and profits, while others grapple with mediocre, or even declining, sales.

This year's installment of the 10 companies to watch features products and services vendors that have targeted hot niches and have been rewarded accordingly. Storage, security, and enterprise architecture rank among the areas ringing up government sales. BakBone Software, Tumbleweed Communications and Troux Technologies

made this year's list as representatives of this trend. Among services companies, SI International has distinguished itself by being nimble and focusing on mission-critical outsourcing and other areas.

Another shift reflected in the 2005 list: Fewer new companies are entering the government market. The stabilization of homeland security spending and the maturation of once leading-edge technologies -- for example, Web services -- have combined to reduce the flow of entrants.

New companies may be fewer, but some familiar names have recast themselves in the government sector. They include Adobe Systems and RSA Security, both of which made this year's list on the strength of significantly broadened technology charters.

Read on for the stories of 10 companies that have targeted pockets of demand in the government market.
10 hot companies to watch

  Lack of genuine oversight and the lucrative returns of helping out the private sector have allowed the govt-corporate partnerships to monitor us legally. The ability to collect smaller companies and their valuable patents has allowed a concentration of contracts for services in a smaller group of ownership. Owning the patents allows a company to decide what the technology will be that works with it.


In May, the U.S. Patent and Trademark Office installed Tumbleweed's SecureTransport file transfer solution. In June, the Defense Information Systems Agency finished the initial procurement of the company's Validation Authority product. That product will be deployed to more than 1.3 million Defense Department users, company officials said.

Ann Smith, vice president of federal sales at Tumbleweed, identified an Army project as the company's most recent win. That deal, which came via a partnership with a small-business contractor, involves the company's Online Certificate Status Protocol products. In another partnering initiative, Tumbleweed is working with Lockheed Martin to upgrade the Defense Message System.

Craig Brennan, appointed Tumbleweed's president and chief executive officer in July, said he plans to continue the company's pursuit of government-sector business.

"Craig is interested in the federal market and sees that as a very large portion of the way to grow the business," Smith said.

In storage, Xiotech targets midsize departmental deployments, rather than enterprise data centers, where many storage-area network (SAN) vendors play.

This philosophy has generated many government wins. Agencies buying Xiotech storage gear include the Architect of the Capitol, the FBI, the Federal Communications Commission and the Navy. The uptick in federal business has helped fuel a 25 percent revenue growth rate at the company. Powell said the government represents 21 percent of Xiotech's overall business.
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Since late 2004, backup and restore specialist BakBone Software has cultivated customers and business allies in the federal market.

Agencies that have purchased the company's wares include the Agriculture Department, Lackland Air Force Base, the Library of Congress, NASA, the National Institutes of Health and the U.S. Geological Survey.
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As for partners, earlier this year the company unveiled a federal program. Kumar said its partners include CDW Government, FedTek, GovConnection, GMRI and GTSI. BakBone has been tapping the partners to gain access to such vehicles as NASA's Scientific and Engineering Workstation Procurement III and NIH's Electronic Commodity Store III.
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A considerable amount of Troux's government business flows through integrators. The company's most recent integrator ally is Raytheon. Troux also works with SRA International and Blueprint Technologies.
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"You can't do business in the federal market without taking that approach," Motola said, referring to partnerships with integrators.

In other government developments, in April Troux introduced its Department of Defense Architecture Framework. And in September the company plans to open a Washington, D.C.-based sales and customer training center.
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BladeLogic has quickly established a federal foothold for its data center automation product.

The company began building a federal operation late last year. Dev Ittycheria, BladeLogic's president and CEO, said he had little experience in the government market back then.

He also faced lingering cynicism about the viability of small companies in the wake of the dot-com meltdown. "We needed to build credibility in the marketplace," he said.

To that end, BladeLogic banked on its service record with large commercial accounts such as Putnam Investments, Starbucks and Time Warner Cable. The company also forged ties with three large federal integrators.

The strategy produced results within three months. In that time, BladeLogic landed deals with the Air Force Pentagon Communications Agency, the Federal Aviation Administration and a third customer that company officials declined to identify.

After six months, the company had generated more than $1 million in federal revenue.

  Those are just a few that are involved but all of them boast the integration of data management for the government sector. The sharing of information between subsidiaries of larger companies creates a network of accessability that covers nearly everything and everyone.

from 2004 Collaborative surveillance between government and the private sector is not new. For three decades during the Cold War, for example, telegraph companies like Western Union, RCA Global and International Telephone and Telegraph gave the National Security Agency, or NSA, all cables that went to or from the United States. Operation Shamrock, which ran from 1945 to 1975, helped the NSA compile 75,000 files on individuals and organizations, many of them involved in peace movements and civil disobedience.

Big Business Becoming Big Brother

The government is increasingly using corporations to do its surveillance work, allowing it to get around restrictions that protect the privacy and civil liberties of Americans, according to a report released Monday by the American Civil Liberties Union, an organization that works to protect civil liberties.

Data aggregators — companies that aggregate information from numerous private and public databases — and private companies that collect information about their customers are increasingly giving or selling data to the government to augment its surveillance capabilities and help it track the activities of people.

Because laws that restrict government data collection don’t apply to private industry, the government is able to bypass restrictions on domestic surveillance. Congress needs to close such loopholes, the ACLU said, before the exchange of information gets out of hand.
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The ACLU released the Surveillance-Industrial Complex report in conjunction with a new website designed to educate the public about how information collected from them is being used.

The report listed three ways in which government agencies obtain data from the private sector: by purchasing the data, by obtaining a court order or simply by asking for it. Corporations freely share information with government agencies because they don’t want to appear to be unpatriotic, they hope to obtain future lucrative Homeland Security contracts with the government or they fear increased government scrutiny of their business practices if they don’t share.
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These days, the increasing amount of electronic data that is collected and stored, along with developments in software technology, make it easy for the government to sort through mounds of data quickly to profile individuals through their connections and activities.

Although the Privacy Act of 1974 prohibits the government from keeping dossiers on Americans unless they are the specific target of an investigation, the government circumvents the legislation by piggybacking on private-sector data collection.

Corporations are not subject to congressional oversight or Freedom of Information Act requests — two methods for monitoring government activities and exposing abuses. And no laws prevent companies from voluntarily sharing most data with the government.

  The NSA violations are serious but they aren’t the only violation we’re enduring. We need to fix these other problems at the same time.

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