Identity crisis
Firms vie for share of biometrics pie
By Robert Weisman, Globe Staff, 4/5/2004
The biometrics gold rush has begun. And the prospectors, such as Massachusetts chief executives Bernard Bailey of Viisage Technology Inc. and Joseph J. Turek of Biometrics 2000 Corp., are panning in Washington.
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With the US government preparing next month to award a border control contract that could be worth up to $10 billion over the coming decade, biometrics companies nationwide -- including a New England cluster working on face recognition, fingerprinting, and other identification technologies -- are vying for a slice of the pie.
Viisage, a Billerica provider of facial-recognition hardware and software, tripled its presence in the nation's capital last month when it acquired Trans Digital Technologies Corp., an Arlington, Va., company that supplies passport technology to the State Department. And the timing of the deal could not have been better for Viisage.
The acquisition "gives us more visibility," said Bailey, who commutes between homes in Massachusetts and the Washington suburbs. "It puts us right in the middle of border management."
That's the sweet spot sought by other companies, too. Turek hopes his testimony before government panels as chairman of the Security Industry Association's biometrics committee will give his Springfield company a boost when a systems integrator is named by the Department of Homeland Security's US-VISIT program. The integrator will distribute contracts to vendors selling biometric technologies that can be used to identify foreign nationals at air, land, and sea borders.
"This is potentially worth multimillions for us," said Turek, whose company sells fingerprint readers and software that converts fingerprints to digital form. While biometrics will represent only a portion of the US-VISIT allocation, that yet-to-be determined portion almost certainly is "going to be the largest biometrics contract ever awarded," Turek predicted. "And even if they divide it up among many companies, it will still be very lucrative for whoever gets a piece of it. . . . You could have 10 to 20 companies looking at $100 million or more."
Biometrics is the science of measuring and analyzing biological data. For Homeland Security purposes, the goal is to deploy technologies that can use physiological or behavioral features, such as a photo or a voice pattern, to identify potential terrorists seeking to slip into the country.
The Homeland Security Department last week expanded the US-VISIT program to include the fingerprinting and photographing not only of foreign citizens arriving in the United States with visas but also of millions of travelers from countries such as Great Britain, France, Germany, and Japan, for which visas are waived for short visits.
After issuing their request for proposal last November, Homeland Security officials now are weighing the proposals of three companies -- Accenture, Computer Sciences Corp., and Lockheed Martin Corp. -- competing to be systems integrators, in effect prime contractors, for US-VISIT's sweeping border management initiative. The department expects to choose a systems integrator in late May. Roughly 40 percent of the second-tier subcontract dollars should be disbursed to small businesses, under a Homeland Security Department goal.
"We're trying to build a 21st-century border management system based on biometric technology and other technologies," said James A. Williams, director of the US-VISIT program.
Each of the systems integrator candidates has lined up top-tier subcontractors. Accenture, for example, has tapped defense giant Raytheon Co. of Waltham to manage the program's biometrics technologies, some of which have yet to be proven effective. Most small to midsize vendors, such as Viisage and Biometric 2000, are talking to all three candidates as well as to Homeland Security officials, and will pitch their technologies once a systems integrator begins assembling an infrastructure for border management.
A tightly integrated system is deemed key to the success of the endeavor. "If you're going to put biometrics to use at the borders, you have to deal with the practical issues of finding core technologies that have a consistent look and feel so you can have standardization in training," said Dennis Carlton, director of Washington operations for the International Biometric Group, an industry consulting firm.
Carlton's firm estimates the fledgling industry will see aggregate sales of just over $1 billion this year. But with the boost from Homeland Security, it projects those sales could quadruple to more than $4 billion by 2008. "That's pretty strong growth," Carlton said. "It's certainly enough to float at lot of boats in the biometrics industry."
Dozens of companies have sprung up in the biometrics field, devising ways to measure characteristics to consistently identify human beings. Among the most frequently employed technologies, and those thought to be favored by US-VISIT for early deployment, are fingerprinting and facial recognition. But while fingerprinting has been around for decades and is widely used in law enforcement around the world, face recognition is still overcoming technological challenges. Though it has proven effective in controlled situations, such as photographing visa applications or people who have been arrested, its ability to scan passersby and match photos in a database is suspect.
In a study at Boston's Logan International Airport last summer, facial-recognition technology furnished by Viisage and a Minnestoa company, Identix Inc., failed to match identities of a test group of Logan employees in more than a third of the cases. Since then, Bailey said, Viisage has upgraded its technology and improved its performance, largely through its January acquisition of ZN Technologies AG of Germany, to address these issues through hierarchical graph matching, a technology based on frequency changes across an image.
Other biometric technologies have been similarly advancing, from iris matching and retinal scanning to voice recognition, hand geometry, and handwriting analysis, and some might be incorporated into the US-VISIT border management system down the road.
Biometrics, once a low-profile business preoccupied by privacy concerns, changed after the terror attacks of Sept. 11. With fear of terrorism overwhelming privacy qualms, "biometrics overnight became an acceptable security solution," Carlton said. The new respectability, coupled with renewed interest from government agencies, corporations, and sensitive security sites such as nuclear power plants, has been a spur to the industry. And New England companies have been jumping on the bandwagon.
An Ingersoll-Rand division in Bristol, Conn., that supplies hand geometry systems to airports and nuclear power plants is trying to interest Homeland Security officials in the technology. A West Kingston, R.I., company, American Power Conversion Corp., is peddling a fingerprint scanner for laptop passwords to the Homeland Security Department and other government agencies. Akoura Biometrics Inc., which does its product development in Wellesley, will seek to sell its fingerprint-based authentication software to the government.
And pair of ex-Viisage executives, working out of a home office in Brookline, founded a company called ID One Inc. and applied for a patent for a technology that will convert two-dimensional photos to three dimensions, correct for lighting and angles, and convert them back to two dimensions. The process is meant to address some of the problems that have bedeviled the industry and tripped up the Logan test.
"I don't believe it makes sense for them to implement facial recognition until the issues of light and position are adequately addressed," said Marc A. Hodosh, founder and chief business officer at ID One, whose advisory board includes such heavyweights such as inventor Dean Kamen, Apple Computer cofounder Steve Wozniak, and face-recognition pioneer Alex Pentland of the MIT Media Lab.
Not all of New England's biometrics players can expect to be part of the US-VISIT program, but the US government and its far-flung branches are a key market for most of them. Last week, for example, Viisage announced it had won a Pentagon contract, valued at $6 million to $10 million, to support a "smart card" program for identifying Department of Defense employees and granting them varying degrees of access and privileges. The program will employ technology from Trans Digital Technologies, the company Viisage recently acquired.
But no other agency award is likely to rival US-VISIT.
In January, even as it was fielding proposals from would-be systems integrators, US-VISIT began rolling out limited biometrics technologies at 115 airports across the country, including Logan. Customs officials at those airports are using finger scanning technology provided by Cross Match Technologies Inc., a Florida company, as well as taking digital photos of foreign nationals arriving with visas. Williams described the current system as temporary until an integrator puts together a more comprehensive one that also will be used as seaports and land crossings, where the vast majority of people enter the country.
"Certainly biometrics is a key component of the US-VISIT system, and will be for the life of the system," Williams said. "So there's certainly going to be an opportunity here."
Robert Weisman can be reached at weisman@globe.com.
© Copyright 2004 Globe Newspaper Company.
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