StreamBase fills sails with In-Q-Tel investment

In-Q-Tel, the private venture capital firm created by the Central Intelligence Agency, made a strategic investment this month in StreamBase Systems Inc., a provider of high-performance complex event processing software.

The investment gives In-Q-Tel of Arlington, Va., an equity stake in Lexington, Mass.-based StreamBase, said Bill Hobbib, StreamBase vice president of marketing. For StreamBase, the infusion of funding will make it possible for the company to gain ground with other federal customers like the Homeland Security Department.

The two sides agreed not to release any specific financial details, but In-Q-Tel's executive vice president for technology, Troy Pearsall, said the firm traditionally invests between $500,000 and $3 million in a technology company.

The CIA and its Directorate of Science and Technology founded In-Q-Tel in February 1999 to locate and support leading edge commercial technologies that could aid the intelligence community's work. The idea behind In-Q-Tel was to build a bridge between the government agency and commercial technology innovators.

In-Q-Tel became acquainted with StreamBase through the software firm's work with various agencies and integrator partners, Hobbib said. Financial talks leading to the investment took about a year, he said.

Real-time analysis

Complex event processing, or CEP, software is designed to instantly analyze rapidly moving data without having to collect it first, Hobbib said. "Traditional data base management and architectures can't actually keep pace with the volume and the speed of data that comes into modern intelligence systems," he said. CEP "analyzes it right on the fly, as it is whizzing past," he said.

For example, if foreign hackers tried to break into a bank system by flooding its network with a large amount of incoming traffic from many different IP addresses, the instant the CEP software detects the anomaly, "it triggers an alert that will shut them out of the network," he said. "The data is actually being analyzed in real time, on the fly, when milliseconds or seconds matter."

Hobbib said the instantaneous response also can be integrated with stored hacker profile data to analyze the attack's characteristics and take further actions based on those patterns of behavior.

StreamBase's earliest customers were financial markets, telecommunications and IT networking firms. One of them, Vision Systems and Technology Inc., a certified 8(a) small IT business with 50 employees in Ellicott City, Md., determined that the software was also suitable for rapid intelligence analysis.

Carol Lunquist, senior scientist at VSTI, said the company understands what intelligence agencies need because it has been involved with the community for quite some time. "A couple of years ago we started a policy of trying to find what new emerging technologies would be suitable for these sorts of problems," she said. StreamBase was one of the companies whose technology VSTI tested in its lab.

"We do a lot of our own research and investigation of these products to figure out how do they work, how do they function, what are their limitations, how can we integrate them with other products?" she said.

Bryan Harris, chief technology officer at VSTI, said he believes that StreamBase's CEP technology gives VSTI a competitive advantage when the company goes after contracts in the intelligence community. "We don't resell their technology at all," he said. "We work with them jointly where they're a fit" so both companies will profit.

Versatile apps

CEP has applications for intelligence, intrusion detection and network monitoring, and in the battlefield, Hobbib said, "all the places where [solving] these kinds of problems are key to national security."

In-Q-Tel determined that CEP was a new critical tool for rapid intelligence gathering, so investing in the company made sense from an intelligence perspective as well as commercially, Pearsall said.

"We're looking to accelerate [CEP] capability in the marketplace," he said, but In-Q-Tel will let StreamBase develop its own marketing strategy. "We're just going to be as supportive of them as any investor would be," he said.

With In-Q-Tel's backing, StreamBase expects to gain a foothold into other agencies that deal with surveillance, RFID sensor networks and geospatial information such as DHS. "They will benefit by the endorsement of In-Q-Tel, and they'll benefit by the new features that we're building especially to meet the needs of government," Hobbib said.

Hobbib said the agreement has several aspects. In addition to In-Q-Tel's financial investment, the CIA-funded firm has asked StreamBase to also provide some undisclosed intelligence functions. "There is a work agreement in place where we are delivering specific new features needed for the government and the intelligence community," he said.

As part of the agreement, In-Q-Tel will cite StreamBase as the preferred vendor of those technologies in its dealings with the intelligence community and the systems integrators that work in the intelligence field.

Pearsall acknowledged that In-Q-Tel might make a second investment in StreamBase if more funding is needed. "The reality is we just completed this transaction," he said, "and we're just happy to be working with them, moving them forward to deliver their platform."

Associate editor David Hubler can be reached at

About the Author

David Hubler is the former print managing editor for GCN and senior editor for Washington Technology. He is freelance writer living in Annandale, Va.

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