War really is going out of style.

At least that’s what Joshua Goldstein, professor emeritus of international relations at American University, and Steven Pinker, a psychology professor at Harvard wrote in a New York Times op-ed piece last month.

Throughout the editorial, Goldstein and Pinker dissect the meaning of “war” today, its various categorizations, and the reasoning behind their sentiment that war has become passé. Among other rationales, the piece cites a lack of monetary gain as a key contributor, as the financial cost of war overshadows any acceptable gain:

“For centuries, wars reallocated huge territories, as empires were agglomerated or dismantled and states wiped off the map. But since shortly after World War II, virtually no borders have changed by force, and no member of the United Nations has disappeared through conquest.”

But is war really going out of style, or is the way it’s fought being changed?

As I wrote in a recent Threat Geek post, war is being redefined, not replaced. The battle for land in previous times has now translated into a fight over intellectual property, with nation states attempting to steal from each other using advanced, targeted cyber attacks. It’s not that war is passé, it’s that the landscape has changed. Land is no longer the primary motivator in global conflict, as the value of intellectual property has become, in many ways, priceless—just think of what China would pay for Pfizer’s next groundbreaking drug before it hits the open market.

Instead of bullets on battlefields, wars are being fought with keyboards over networks at a fraction of the price.

And it makes sense, doesn’t it? Why risk billions of dollars engaging in combat with a nation when you could steal their most valuable assets with the click of a mouse? Why thrust your country into global negative light, when you could be a faceless enemy attacking from thousands of miles away?

The perception that the United States has not been attacked by a foreign government since Pearl Harbor is false. Thousands of times each day, nation states like China and Russia are engaging in cyber warfare, trying to deploy advanced persistent threats (APTs) over American networks to gain access to our most crucial information. The United States has always been upfront in flexing its military muscle as a deterrent against potential threats, but when it comes to our capabilities in a cyber war, we have been secretive.

Maybe that’s about to change.

Recently, four-star General James Cartwright (a retired vice chairman of the Joint Chiefs of Staff) went on record as saying the United States needs to be more upfront about its cyber capabilities.

“You can’t have something that’s a secret be a deterrent. Because if you don’t know it’s there, it doesn’t scare you,” said General Cartwright.

It’s hard to argue with his logic of letting the world know of our offensive capabilities or employing a strong defense as a way to defeat cyber attacks. If a country is going to take a shot at U.S. interests, they are going to get hit back. Hard.

This is where Fidelis Security Systems and several other security companies can help to deal with these types of advanced persistent threats on a daily basis. In a way, network security companies are becoming the defense contractors of the future. What Raytheon and Lockheed-Martin were to the aerospace industry throughout the 1980s, has now been transferred to our shoulders. We can’t win the war for you, but we can equip you with the best weapons to help fight in the cyber war.

General Cartwright estimated that it could probably take hackers two to five years before they had access to disable a large percentage of the banking industry or the U.S. electrical grid. Even a smaller attack could undermine confidence in financial markets. It would appear to me that these threats are cyberspace’s version of the Cuban missile crisis.

Doesn’t sound like war is going anywhere, does it?

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Lexington, MA-based FirstFuel Software is among a crop of experimental energy projects picked to help the Department of Defense curb its energy output across military installations, the company announced yesterday. The startup was one of 27 teams selected as part of the DoD’s Installation Energy Test Bed initiative, a program designed to help emerging energy technologies get to market quicker while also slicing the roughly $4 billion a year the department spends on energy across its 300,000 sites.

FirstFuel’s software enables customers to measure building energy output—and target effective efficiency upgrades—without ever setting foot on site. The technology uses a building’s address, a year’s worth of energy meter readings, satellite imaging, and weather patterns to conduct the audit remotely. CEO Swapnil Shah has previously stated that his company is targeting utilities and government agencies as customers because of their massive reach and their need to cut the costs of pricey on-site audits, which can run between $5,000 and $30,000 a pop. In this case, the FirstFuel technology will be tested out in a pilot of about 100 DoD buildings and then evaluated for use in more sites, said Shah.

The Installation Energy Test Bed program, founded in 2009 as part of the DoD’s Environmental Security Technology Certification Program, has selected other technologies in the building management, energy efficiency, renewable energy, and energy storage arenas. Through the program, the government aims to take on some of the risk as one of the first users to validate the new technology, and “for those technologies that prove effective, DoD can go on to serve as an early customer, thereby helping create a market, as it did with aircraft, electronics, and the internet,” the Installation Energy Test Bed’s website explains. FirstFuel seems to be alongside some heavy hitters for the 2012 pool, which includes projects from 3M, Raytheon, Autodesk, and Honeywell.

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Even though our local economy is far from strong, I am pleased to report that at the Northwest Energy Angels, we continue to see and invest in interesting deals across the spectrum of clean technologies.

In the past year, we’ve seen and closed deals in virtually every segment of the cleantech industry, including more efficient lighting, purer water technologies, and more productive renewable energy. Contrary to the popular press, our shrewd entrepreneurs are doing it with little reliance on special subsidies or government funding.

For 2012, there are several trends that I expect to see emerge and develop in these segments (borrowing the category definitions from the Cleantech Open):

Air, Water, and Waste
For the last few decades we have been wrestling with the need to develop alternatives to fossil fuel reliance and are now clearly on a path to consider water and its shortages in a similar vein. In many respects, the clean water segment is where the energy industry was a couple of decades ago. We will continue to see companies looking to develop ways to use water more efficiently, measure water and its cleanliness more precisely and cost-effectively, and recoup water that was previously thought unusable.

Domestically, vigilance in air quality makes opportunities for dramatic improvement difficult. Obviously, carbon dioxide emissions are a huge exception to this, but uncertainty over government mandates and/or incentives will make CO2 control a market that startups will have a hard time making a dent in.

The area of waste will continue to offer a wide variety of disparate, but valuable opportunities as cost of disposal and potential value of the refuse continues to be recognized.

Energy Efficiency
The Pacific Northwest has been blessed and cursed in this segment. The ethic of the region is very pro-conservation but our energy costs are among the lowest of any region, which gives priority to other faster-paying investments in this economy. As we look at efficiency technologies, the key questions are, first, will it sell in California (and elsewhere) and second, is there any way for a local company to deploy, test and further develop its technology for commercial roll out?

Given recent predictions for climbing energy costs, the second question is most often the decider for investor involvement. As I’ll explain below, I see a very positive trend here and am bullish on this sector for our local companies for the first time in a long while.

Green Building
As in the case of efficiency, our region enjoys quick consideration for new green building products here and enthusiasm for early winners. Status quo materials and practices are, unlike our energy, on par cost-wise with the nation, giving local solution providers an excellent chance to gain early market traction.

Renewable Energy
This segment of the cleantech world is seeing the biggest changes. The sunsetting of many U.S. government incentives is causing entrepreneurs to rethink their prospects. Opportunities will continue for those companies that have a “mine the miners” strategy to help established renewable energy equipment manufacturers to improve their product offerings—especially when products are aimed at the world market, which is expected to see much less retrenchment in 2012.

One area of exception to the slowdown is renewable transportation fuels, aviation fuels in particular. Our region has a leg up with Boeing and military interest in the subject as well as the nation’s largest operating biodiesel producer, Imperium Renewables. While it won’t be built overnight, I do see more and more opportunities for companies that can contribute to the success of this industry.

Smart Power, Green Grid, and Energy Storage
The Smart Power, Green Grid, and Energy Storage category encourages links between information technologies and electricity delivery that give customers greater control over when and how their energy is delivered and used.

In many regards, startups in this space have a chicken-and-egg problem: Utilities and regulators want to see products before using these new technologies at scale, while startup companies (and their investors) want to see buyers ready to write checks before gearing up for production.

Our region is rich in the technologies needed to implement the smart grid and its cousins—we have a tradition of progressive utilities that have implemented its precursors. But I remain skeptical of a fast market uptake in 2012.

Our Secret Weapon
Military installations. The local cleantech community has been sought out by representatives of the Navy (Naval Base Everett) and the Army/Air Force (Joint Base Lewis-McChord) to help them achieve some truly remarkable sustainability goals for waste, water, and energy.

Don’t get me wrong—this isn’t to say that the procurement floodgates have opened. They haven’t. The military is on a downward budget trend and they know it. But what they do have is a long view and a willingness to invest in projects that will pay off over a longer term than most homeowners or businesses would.

These military installations capture a complete subset of our local economy: industrial operations, commercial/office buildings, residences, and more. In some cases there are also financial partners who will step in alongside military sustainability initiatives, to provide funding where others wouldn’t.

Perhaps most importantly for our entrepreneurs, these bases are looking for good, early commercial products to test, demonstrate and embrace to achieve their goals.

The Road Ahead
While I don’t think that cleantech is in for any 1990′s-style boom, I do think we will continue to see a wide variety of clever entrepreneurs with great market insights and technological breakthroughs in 2012. And the Northwest Energy Angels will continue to be ready, willing, and able to fund them.

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[Updated 4:35 pm] Bedford, MA-based iRobot laid off about 55 people last week from its government and industrial robots division, Xconomy has learned. I heard from a source familiar with the company that some of the layoffs came to light because ex-employees posted on social media looking for new positions. An iRobot spokesperson did not immediately respond to a request for comment.

The staff cuts come as the pioneering robotics company (NASDAQ: IRBT) announced its third quarter financial results this afternoon. The press release mentions that the company “implemented a reduction in force” because of “expectations for a reduction in government-funded research in 2012.” There is an earnings conference call scheduled for 8:30 am Eastern Time tomorrow.

The last significant layoff at iRobot was back in 2008, but this one is bigger, according to my source. The latest staff reduction is also notable because it affects the biggest division in the company—the one that houses some of its most famous products, like the PackBot military robot.

I have heard that iRobot has roughly 550 employees, which would make the layoff about 10 percent of the firm’s total workforce. Those numbers are not confirmed, however.

In the past year, Xconomy has reported on iRobot’s progress and expansion in Michigan, among other things. It’s not yet clear in which cities the staff cuts have occurred.

[Updated with comments from iRobot] A company spokesperson just confirmed the layoffs, but with slightly different numbers: “We can confirm that iRobot Corporation has had a reduction in force. This difficult action was taken based on our current view of future defense spending and a shift in program structure. In 2012 we see a significant decrease in our externally funded research and development. This transition from development to production requires our Government and Industrial robot division to reduce the size of its workforce. The reduction accounted for approximately 8 percent of the total workforce.

“We will be addressing this on the call tomorrow.”

[Updated 5:40 pm] iRobot has confirmed that 55 full-time employees were let go from the company’s offices in Bedford, MA; Durham, NC; and San Luis Obispo, CA.

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Some big changes are afoot at an interesting Boston-area laser startup. TeraDiode, a Littleton, MA-based maker of laser systems for cutting, welding, and defense applications, said today it has named Parviz Tayebati the company’s new CEO and board member.

Tayebati, the former chief executive of telecom laser company Azna and photonics firm CoreTek, succeeds TeraDiode’s founding CEO and investor, David Sossen. Sossen is no longer listed on the company’s website as a member of the leadership team, and the firm isn’t taking interview requests today, according to a spokesperson.

Earlier this summer, Sossen told me about TeraDiode’s history and some of its technology’s far-out applications, such as laser weapons that could be deployed on a tank or ship to disable UAVs or blow up incoming rockets. That’s still years away, though. TeraDiode’s present applications include industrial welding, military target illumination, and heat-seeking-missile deterrents.

The company’s technology, based on a technique called wavelength beam combining, was developed at MIT Lincoln Lab to make direct-diode lasers brighter, more powerful, and more focused. In 2009, TeraDiode raised $4 million in Series A financing led by Stata Venture Partners. Last month, the startup said it had secured $3.2 million in new defense-related contracts.

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Here in the Boston area we like hard technologies. We like companies with weird names. We like companies that have vision. Ladies and gentlemen, I present to you: Tenebraex, SiOnyx, and MC10.

They are the micro-cluster of imaging tech companies. They are working on a mix of far-out stuff and closer-in products, with a multiple-focus approach that befits their chosen field. If they were superheroes, Tenebraex would have eyes in the back of its head (panoramic view); SiOnyx would see in the dark; and MC10 would morph into different shapes depending on what it was looking at. Taken together, they just might reinvent the cameras we use every day.

One example: Imagine an ultra-thin camera phone that can take high-resolution, wide-angle photos and video in a dimly-lit bar or restaurant, or outside at night. That’s what combining the companies’ capabilities could do—though, as far as I know, they are not working together.

Several months ago I first talked with Peter Jones, the CEO of Scallop Imaging, which is the fastest-growing division of Boston-based optical tech firm Tenebraex. Why am I telling you this now? One, I’ve been busy. Two, Scallop is about to debut its third camera product in September. Last week, Jones said the upcoming “as-yet-unnamed camera will be the industry’s first multi-megapixel panoramic camera for very low light environments.”

Scallop’s new camera follows in the footsteps of its earlier products: digital and analog versions of a device (see photo below) that stitches together images from five separate camera sensors into a 180-degree, distortion-free, high-res panoramic view, for security and surveillance applications. The advantage over traditional fisheye lenses and pan-and-tilt cameras? Image quality, cost, and convenience, Jones said.

Some recent customers include hotels, museums, retail stores, and the U.S. military. One of the more intriguing applications of the technology lies in robotics. Last winter, a U.S. Army research lab organized a contest at Fort Bragg, NC. A number of teams sent mobile robots into a remote area to beam back images—presumably to check out the surroundings without having to send troops in. The robot that used Scallop’s camera finished in the top two (in terms of meeting its objectives), and it was the only one that didn’t get stuck in the woods, Jones said. He attributed the performance in part to its wide field of view.

My colleague Wade first profiled Scallop Imaging back in 2008. Since then, the division has grown to about 50 people. Tenebraex, its parent company, is no flash in the pan either. The company started in 1992 and is profitable, having invested in Scallop “multiple millions” of dollars in research and development, Jones said. “The majority of our future growth will come from Scallop.”

The company’s upcoming low-light camera overlaps a bit with another local firm. … Next Page »

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Nothing like a semi-serious Steven Chu joke to start your morning.

Speaking at an energy conference in Detroit today, the U.S. Energy Secretary and Nobel Prize winner recalled as a boy in the 1950s the Soviet Union launching Sputnik into space.

“It was very disconcerting. The German rocket scientists living in the Soviet Union were better than German rocket scientists living in the United States,” Chu said, as the crowd snickered.

Chu was referring to how German scientists, not American or Soviet, were responsible for the best rocket technology at the time.

Ironic that Chu referenced the space race between the Cold War foes, as the United States, who one-upped Sputnik by sending men to the moon, recently retired its space shuttle program. In its place, the United States is engaged in a great “energy race” with other countries like China to develop next generation energy such as solar and biofuels, Chu said.

“Despite the fact that times are tough, we have to think about the future,” he said. “If we don’t get moving, we will be importing these technologies instead of exporting them.” The Energy Secretary was also in Michigan to tour lithium battery maker A123 Systems’ new facility in Romulus, MI, made possible with federal stimulus money.

To that effect, Chu announced a new Detroit-based alliance between the U.S. Department of Energy (DOE) and the U.S Department of Defense (DOD) to boost development of cleantech technologies for the military, including lightweight composite materials for vehicles, alternative fuels, and advanced combustion engines.

Detroit makes sense to anchor the partnership for a number of reasons. The city’s Big Three Automakers-Ford, Chrysler, and General Motors-frequently collaborate with the DOE. The U.S. Army’s Tank Automotive Research Development and Engineering Center (TARDEC) is also based in Warren, MI.

The military needs Detroit’s help, DOD officials say. Last year, the armed forces spent $13 billion on energy, … Next Page »

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Marc Andreessen, the Silicon Valley entrepreneur-turned-venture-capitalist, said something interesting in last weekend’s New York Times magazine interview. It wasn’t his “there’s no tech bubble” spiel, or even his prediction that we’ll all be riding around in self-driving cars in 10 to 20 years, thanks to Google.

No, it was that he singled out “wearable computing”—portable devices like a pendant around your neck that record “everything around you all the time”—as a Next Big Thing. (Like Twitter, Facebook, or the iPhone, this could either be the greatest thing since sliced bread, or the downfall of humanity—or both.)

Now one Boston-area startup is taking the mechanics of the idea a step further. MC10, based in Cambridge, MA, is developing flexible (“conformal”) electronics that can bend, stretch, and wrap around to conform to surfaces in the natural world, like the human body. That’s a far cry from the guts of today’s computers, which are based on rigid silicon circuits that are laid out on flat surfaces.

The three-year-old company has garnered increasing attention for its efforts, raising a $12.5 million Series B round led by Braemar Energy Ventures last month. (North Bridge Venture Partners was the original venture investor in 2009.) MC10 also has a deal with Reebok to develop a wearable product that’s very hush-hush (probably electronics integrated into footwear or other apparel for monitoring performance). The startup has also collaborated with Massachusetts General Hospital and other institutions to develop a new type of balloon catheter, equipped with sensors, to assist with heart procedures. Next up: wearable power and newfangled image sensors.

“We’re trying to change the world by reshaping electronics,” says Dave Icke, CEO of MC10. Icke is a semiconductor industry veteran who was previously an executive with Advanced Electron Beams and Teradyne.

The idea of flexible electronics isn’t new. But unlike other approaches over the past decade, such as using organic semiconductor materials or microwires (which tend to be slow), MC10 uses high-performance silicon circuits, which means the devices could be as fast as the computers you’re used to using. The trick is in exactly how the silicon is laid out and combined with stretchy materials. Imagine little islands of silicon linked by springy interconnects—“like a Slinky in between,” Icke says—with the whole thing deposited on a pre-stretched polymer. Depending on the application, the team adjusts the thickness of the islands and the interconnects so as to minimize the strain on the circuitry.

MC10's silicon-based photovoltaic cells could be used for portable or even wearable, personal power generation (image: John Rogers, UIUC)

MC10’s technology is based on research done in the lab of John Rogers at the University of Illinois at Urbana-Champaign, who is a co-founder of the company. Rogers, a former postdoc with chemist George Whitesides at Harvard University, was the winner of the prestigious Lemelson-MIT Prize announced last month. And the glue for the whole team is Carmichael Roberts, the general partner who led North Bridge’s investment; Roberts also worked with Whitesides as a postdoc, and he knew Icke from a previous company. (Icke, for his part, had gone to business school with North Bridge’s Jamie Goldstein.)

That’s all well and good, but making a living as a hardware startup is no easy task, especially when you’re selling a new technology. So MC10 has identified a couple of potentially lucrative markets for the next phase of its growth. One is portable (or even wearable) power generation—a set of projects supported by existing government contracts. Imagine a flexible sheet of solar-cell material that coats or is woven into the surface of a tent or an unmanned aerial vehicle (UAV) to absorb sunlight and store electricity. People have been talking about designing such a material for years, but MC10’s (see photo above) just might be good enough to make it work.

“Instead of having a bolt-on rigid box that gets attached to a roof or vehicle, [people could] integrate those efficient materials into a tent or awning, or into vests and clothing,” Icke says. … Next Page »

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If laser weapons and tools ever become mainstream, it might be because of a quiet little company called TeraDiode.

Sure, there are lots of more imminent (and perhaps more practical) applications for the Littleton, MA-based laser firm—welding, cutting metal, illuminating targets, and so forth—but blowing stuff up is what a laser was meant to do. At least if you grew up watching Star Trek phaser battles, Star Wars dogfights, and other forms of popular but admittedly dorky sci-fi entertainment.

TeraDiode, a two-year-old spinout from MIT Lincoln Laboratory, is commercializing a new kind of laser system, using what’s called a direct-diode laser, that it says is brighter, more powerful, and more focused than its predecessors. The technology is based on semiconductor lasers (which are electrically rather than chemically driven) plus a sophisticated optical system to manipulate individual beams to form a single output beam—a technique known as wavelength beam combining.

The 11-person company raised $4 million in a Series A round led by Stata Venture Partners in the fall of 2009, and is currently closing a second financing round from VCs and strategic investors, says founder and CEO David Sossen. The company has also landed some $3 million in U.S. defense contracts, he says.

Sossen, a veteran of Arthur D. Little and other firms, was a founding investor in TeraDiode, together with Fred Leonberger, a photonics expert from optical-tech firm JDSU. The startup’s laser technology, and its subsequent business development, is the handiwork of a couple of former Lincoln Lab scientists, Bien Chann and Robin Huang (no relation to the author), who both left to co-found the company in late 2009.

Lasers have been used in industrial applications for some 40 years. And the U.S. military has used lasers for decades, but in limited ways, because the devices tend to be bulky, inefficient (not enough power output), and prone to breakdown. To create a “directed energy weapon,” for example, a conventional chemical-based laser would need to be about the size of a building.

Until now, the limiting factors for laser diodes have been power output and beam quality. “We’ve broken through that barrier,” Sossen says, adding that his company’s relatively compact lasers (which for commercial uses are a bit bigger than a breadbox but smaller than competing devices) can output between several hundred and several thousand watts, and in principle up to 100 kilowatts (with a bigger laser)—enough power to do some real damage. And at different wavelengths, depending on the application.

TeraDiode envisions selling lasers “compact enough to be deployable on a tank or … Next Page »

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Cambridge, MA-based MC10, a startup focused on designing electronics that can bend and stretch with the natural world, said today it has raised $12.5 million in Series B financing led by new investor Braemar Energy Ventures. Previous investors North Bridge Venture Partners, Osage University Partners, and Terawatt Ventures also participated in the round. MC10 is working on flexible biomedical sensors and devices, consumer electronics, sports and military applications, and portable (and possibly wearable) energy-generation devices. The company was founded in 2008 based on research done at the University of Illinois at Urbana-Champaign (John Rogers) and Harvard University (George Whitesides). MC10 is led by CEO David Icke.

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We had a great time at our latest Xconomy Seattle event, “Separating Hype from Reality in Alternative Fuels,” held last night at the new Institute for Systems Biology headquarters in Seattle’s South Lake Union neighborhood.

The presenters sketched some meaty ideas about the drive to develop oil alternatives, challenged a bit of conventional thinking, and got the audience to dive in with great follow-up questions. Here are a few of the big themes that emerged as Luke moderated the main discussion with Ned David and Kristina Burow of Arch Venture Partners—two of the co-founders of San Diego-based Sapphire Energy—and Margaret McCormick, the co-founder and CEO of Seattle-based Matrix Genetics. If you want to see some images from the event, check out this Flickr gallery from Vinh Chung of Total Effects Video.

—Biofuels 3.0: David pointed to the U.S.’s last two attempts to develop biofuels—after the 1970s energy crunch and in the mid-2000s, when national policy ramped up the production of ethanol. Neither of those eras, of course, have delivered much in the way of energy independence.

David said the 1970s saw the first big effort to cultivate algae as an alternative fuel source, but that fell short because the technology wasn’t advanced enough to get results. That wrongly led many to believe that algae wouldn’t work, he said.

The ethanol boomlet of the past decade was the 2.0 wave of biofuels for this country, but that hasn’t produced anything like what all those optimistic politicians pledged at the outset. “Forty percent of the U.S. corn crop goes to replacing 8 percent of our transportation fuel,” Burow said. “That is not sustainable.”

At present, David said, we’re in the 3.0 phase of U.S. biofuels. Algae was a big focus of this particular discussion, since all three of our panelists have direct experience with that field. With projects like Sapphire Energy’s drive to put a huge algae-fuel production facility in the Mexican desert, you’re seeing “the first building blocks of world-scale capability” for these fuels.

“I think that microorganisms can solve most of the problems of the world. If you go back, it was alcohol or it was cheese,” McCormick said. “There’s so much potential that can be harnessed out of these microorganisms and the DNA that’s in them, and we can look at them to solve all kinds of problems.”

—High stakes, but no quick fixes: McCormick said the latest phase of alternative fuels work is not purely driven by an economic need to reduce spending on oil, but is also by the need to address climate change and national security issues.

Burow added a fourth factor: “This has got to work. By 2020, we’ll have increased our need for energy by 40 percent as a world. And there’s simply no way to meet that increase without these types of alternative fuels.”

At the same time, Burow said, the cycle for developing such culture-shifting technologies is still much slower than we expect from other areas of innovation. “This isn’t Twitter. This isn’t … Next Page »

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Sometimes what’s bad for companies is good for business. That’s the case for a number of Massachusetts security software firms. These days, the Boston area seems to have renewed its claim as an epicenter of cyber security activity.

In the wake of the recent, much-publicized cyber attack on RSA Security, a division of Hopkinton, MA-based EMC (NYSE: EMC), I thought it would be a good time to check on efforts to meet new cyber threats by some local security companies. RSA classified the attack on its system last week as an “advanced persistent threat”—a phrase used to describe a sophisticated effort to target software applications, sensitive data, or end users—but the firm was vague about exactly how it was hacked, what kinds of data were stolen, and what risks its customers face. (RSA said it is working closely with customers, but security expert Bruce Schneier wrote in a blog post that “the company has lost its customers’ trust.”)

This kind of advanced threat is a far cry from the corporate hacking of the past couple of decades. Companies used to be able to defend themselves from rogue hackers by deploying technologies around the perimeter of their network—such as firewalls and “deep packet inspection,” which detects things like viruses and worms as they enter the network. But advanced persistent threats are what defense and intelligence agencies are used to seeing from nation-states (from China to the Middle East to Eastern Europe) trying to hack into government databases—except now their targets include banks, insurance companies, tech firms (Google, Adobe, and others), and critical infrastructure like energy and chemical firms.

All is not lost yet. In addition to big companies like EMC/RSA (which also includes security technology from Network Intelligence), a number of smaller but established software companies are working on ways to combat the latest security threats. One of these companies is Fidelis Security Systems, a nine-year-old firm in Waltham, MA, that is giving corporations and government agencies the ability to continuously identify and analyze threats from within their networks, down to the level of applications, files, and individual sessions.

That’s apparently crucial for fighting advanced persistent threats, which can take the form of anything from malware embedded in a PDF file to tricking an employee into accessing a website and then exploiting a software bug. “When somebody decides to make you a target, they will persistently and, in a very targeted way, try to infiltrate your network,” says Fidelis CEO Peter George.

One big emerging trend is government agencies working together with corporations to try to thwart such attacks. This increased cooperation was evident at the RSA Conference in San Francisco last month, George says, where a number of forums and panels featured “three-star generals sitting side by side with business leaders.” The U.S. government, he says, is “working in collaboration with the biggest enterprises in the world to show them best practices, to show them how to fight advanced threats.”

All of this points to a major mindset shift when it comes to corporate data security. “Organizations should continue to act under the assumption that the attackers are already inside, rather than dedicate excessive time and resources to securing their perimeter,” says Adam Bosnian, executive vice president at Cyber-Ark Software, a Newton, MA-based security company that specializes in managing privileged users and protecting against insider threats, among other things.

Fidelis and Cyber-Ark are part of a thriving cluster of Boston-area security companies … Next Page »

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Improvised explosive devices (IED) have been the scourge of the U.S. military in war zones like Iraq and Afghanistan. The Pentagon has spent billions of dollars on high tech tools in order to defeat such frustratingly low tech weapons.

East Lansing, MI-based BioPhotonic Solutions wants to add one more tool to the kit. The startup’s founder, Michigan State University chemistry professor Marcos Dantus, along with researchers from the Harvard University, are developing “smart” lasers that can identify chemical molecules—such as those found on IEDs—by measuring their vibrations. The lasers could have applications not only in the military, but in medicine as well.

In the IED example, a soldier traveling in a convoy in Afghanistan aims a laser down the road. The laser spots the unique chemical signature of the explosive TNT or the artillery shells commonly found in IEDs. Dantus says the laser currently possesses a range of 40 feet, though such a battlefield device is still a way off.

In 2005, the company received a $750,000 grant from the U.S. Department of Defense to explore ways pulse lasers can detect explosives and nerve agents. BioPhotonic is currently working on a similar project with the Department of Homeland Security, Dantus said.

In a study published in February’s issue of the journal Nature Photonics, a laser microscope developed by Dantus and his team uses short bursts of energy to excite molecules, creating a unique vibration signature scientists can use to identify the chemical. Differences in vibrations are extremely hard to detect—that’s why the research is so valuable, Dantus says.

The technology offers vast opportunities in medicine. For instance, Harvard researchers envision the microscope as a non-invasive alternative to skin cancer biopsies, in which doctors must cut out a piece of tissue and send it to a laboratory for testing. Smart microscopes could also help doctors measure how the body absorbs drugs by analyzing the hair or skin.

Eventually, Dantus thinks device makers will attach these smart lasers to endoscopic devices, which can scan tumors deep in the human body.

BioPhotonic Solutions, which Dantus founded in 2003, sells technology that measures, shapes, and compresses laser pulses to laser manufacturers like Coherent, Spectra Physics, and Quantronix. The company, which has received Small Business Technology Transfer (SBTT) and National Science Foundation grants, generates gross revenues in excess of $1 million.

BioPhotonic is not the only university spinoff to exploring IED detection from afar. Based in Stillwater, MN, Ascir, a recent spinoff from the University of Minnesota, is developing “microblometers” that convert infrared radiation emitted by gases and chemicals into measurable electrical signals.

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Adaptive Materials, an Ann Arbor, MI-based developer of solid oxide fuel cells for use by the military and in recreational vehicles, has been acquired by UK-based Ultra Electronics Holdings. Adaptive Materials announced in a news released today that it will continue to develop and manufacture its propane-powered fuel cell systems from its current Ann Arbor facility.

Adaptive Materials is considered to be a Michigan success story, having taken its product from a University of Michigan lab to military contracts totaling about $45 million in the last decade, all without taking a dime of venture capital or angel funding.

Michelle Crumm, co-founder and chief business officer, explained to me in a two-part interview last spring (Part 1 and Part 2) that the company’s success was due to a decade of building relationships with military customers and refusal to accept “other people’s money.”

Crumm also told me the company was poised for big growth, moving from hundreds of units sold to the Department of Defense and the U.S. Air Force to thousands, in part because of a need for long-lasting fuel cells for “eyes in the sky” missions over Afghanistan. She told me that Adaptive was having some trouble finding qualified engineers in the area to fill nine vacant positions. Today’s news release says that the company still needs to fill 10 positions.

Crumm and her husband, co-founder Aaron Crumm, will retain their positions in the company, according to the release. Ultra Electronics COO Rakesh Sharma said in a news release that the takeover will allow the company’s Ann Arbor workers more of an opportunity for career advancement. Adaptive currently employs 65 workers.

Ultra Electronics serves niches in the defense, security, transport and energy market sectors.

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A pretty big merger in defense tech this morning. Waltham, MA-based Raytheon (NYSE: RTN) announced it has agreed to acquire Sunnyvale, CA-based Applied Signal Technology (NASDAQ: APSG) for $38 per share—about $490 million in cash. The deal is slated to close in the first quarter of 2011, and is not expected to have a material effect on Raytheon’s earnings.

Defense contractor Raytheon made the acquisition to complement its intelligence, surveillance, and reconnaissance technologies, said CEO and chairman William Swanson, in a statement.

Applied Signal, which makes communications, analytics software, and cyberwarfare technologies primarily for government agencies, will be integrated into Raytheon’s Space and Airborne Systems business unit. Advanced sensor systems will be a particular area of interest for the two companies as they move forward together.

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OK, a flying Humvee doesn’t sound like a very green vehicle—but the U.S. Defense Advanced Research Projects Agency isn’t interested in green.

DARPA is interested in improving the safety and lethality of U.S. troops in dangerous environments. And it is willing to pay handsomely for it—to the tune of a five-year, $65 million research program to develop what it calls a “Transformer” vehicle that works like a Humvee on land, but can also fly.

No, this isn’t an Onion article. The goal is to be able to carry four troops and their gear (1,000 pounds) over a distance of 280 miles on one tank of fuel, by any combination of air and land, the agency says. The vehicle must be able to take off and land vertically—meaning it will fly like a cross between a helicopter and a plane (see drawing above). And, oh yeah, it has to be piloted by an average Marine Corps soldier without any flight experience. In other words, it needs to fly mostly by itself.

If it works—a big if, indeed—such a vehicle could swoop over obstacles or tough terrain, and potentially could help troops avoid ambushes and improvised explosive devices in roads. It could also be used for evacuation or rescue missions where it would be very useful to scan the situation from the air and then drop in at the right spot—in urban combat operations, say—while maintaining some mobility on the ground after landing. (You can read more details and speculation in this Popular Mechanics article.)

A key participant in the DARPA program is Woburn, MA-based Terrafugia. You might know it as the “flying car” company, though the firm much prefers the drier term “roadable aircraft.” Terrafugia was founded in 2006 by five MIT-educated pilots, and has been developing a light sport plane, called the Transition, that can be driven on roads and is slated for testing and production next year. The company declined to comment on its involvement in the DARPA program beyond the information in its press release this week. But it’s clear that Terrafugia’s expertise in combining flying and driving vehicles is valuable here.

Indeed, Terrafugia is “one of the few companies that has experience blending the disparate ground vehicle and aircraft requirements into a single functional concept,” says Stephen Waller, the program manager for the DARPA project, in an e-mail. “This is the primary challenge to successfully develop the Transformer vehicle.”

Terrafugia is one of several companies participating in the program—and a few have connections to the Boston area. Virginia-based aerospace firm Aurora Flight Sciences, which has a research and development office in Cambridge, MA, and technical consulting firm Metis Design, based in Cambridge, both have received small-business research grants to work on the project. For its part, Terrafugia is the largest subcontractor to AAI, a Maryland-based aerospace and defense company owned by Textron, a multi-industry conglomerate headquartered in Rhode Island. AAI is one of the two main contractors on the DARPA project; defense tech giant Lockheed Martin is the other (see drawing on left for Lockheed’s competing design concept).

Meanwhile, Carnegie Mellon University in Pittsburgh has been awarded $988,000 to develop an autonomous control system for the vehicle. Sanjiv Singh, a professor in CMU’s Robotics Institute, is leading that effort. And rocket engine company Pratt & Whitney Rocketdyne is working on the engine and propulsion technology for the … Next Page »

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None of this would have happened 10 years ago. Where to begin?

Last month, I walked into a room of about a dozen robotics experts and technology startup investors. It was one of the sessions at the MassTLC Innovation “unConference” in Boston. The discussion centered around how to build a successful robotics company. But it was some of the newer context around this question that turned the session into a watershed moment I won’t soon forget.

Two main takeaways: First, robotics companies around Boston have come a very long way since 2000, when I was a postdoc in a robotics group at the MIT Artificial Intelligence Lab. That sort of academic research is still going strong, but the bigger story of the past decade has been the business success of robotic vacuum cleaners, bomb-disposal units, and surveillance drones, and how that has helped pave the way for a new generation of companies.

My second takeaway is that the business community thinks there is a new threat to Boston’s competitive position in robotics—and its name is Google. I’m not usually one to fan the flames of Boston vs. Silicon Valley arguments, but in this case the discussion hits close to home, so I wanted to see if there’s much truth to it.

The Boston area, of course, is home to numerous robotics companies—iRobot (NASDAQ: IRBT), Boston Dynamics, Harvest Automation, Heartland Robotics, Kiva Systems, iWalk, and CyPhy Works, just to name a few. Many of those companies were represented in the unConference session, along with investors from CommonAngels, Founder Collective, and General Catalyst. Historically the region has had lots of expertise, both in universities and industry, in key technologies underlying robotics such as sensors, actuators, control algorithms, artificial intelligence, computer vision, and data storage.

Yet 10 years ago, most early-stage investors (angels and VCs) wouldn’t think of touching a robotics startup. The development costs and business risks were too high, and the technology infrastructure—onboard processing power, wireless communication, programmable chips, sensors, algorithms—wasn’t quite ready for prime time. Now things have changed, certainly in investors’ minds, … Next Page »

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Last week, Waltham, MA-based defense contractor Raytheon (NYSE: RTN) unveiled its latest prototype “exoskeleton.” This is a powered robotic suit that a soldier or worker could strap on in the field to enable them to load heavy equipment faster, carry supplies or munitions using less energy, or—let’s face it—just look ultra-cool. Raytheon said in a statement that the new robotic suit is “lighter, stronger, and faster than its predecessor, yet it uses 50 percent less power.” The device is powered by high-pressure hydraulics and gives its wearer some degree of super strength.

In the demo, which took place at Raytheon’s Sarcos subsidiary in Salt Lake City, UT, an engineer wearing the suit (which includes arms and legs) punched through some boards, did pushups, and lifted weights with little effort. The news was reported fairly breathlessly by media outlets including CNET, Wired, Scientific American, and the L.A. Times. And I understand why—it’s a sexy technology that conjures up visions of “Iron Man” and mythical references to superhuman strength. Plus it’s far more accessible than all the top-secret stuff Raytheon does that is actually useful for the military—radar systems, cybersecurity, missile defense, and so forth.

But I wondered how much progress has really been made in exoskeletons—in the fundamental robotics, sensing, control, and energy technologies necessary to make a robot suit powerful, safe, and reliable to move around in. Raytheon declined to be interviewed for this story, but I did some digging around.

After all, I’ve been following the field since 2001, when I worked in the old Leg Lab at MIT, which was home to robots that could walk, run, hop, and keep their balance. Back then, the main problems with designing a robotic exoskeleton were how to make it powerful without being clunky, how to control it safely, and how to supply enough energy to it.

In 2002, I attended a private meeting of the U.S. Defense Advanced Research Projects Agency program on “exoskeletons for human performance augmentation” (from which I still sport a nifty backpack, though it doesn’t give me super strength). The program manager was Ephrahim Garcia, a professor at Cornell University, who later handed it off to engineer John Main. At the time, about a dozen universities and research groups were competing to build exoskeleton technologies for DARPA, and Sarcos had one of the designs that eventually won out. A couple years later, I visited Sarcos (which Raytheon acquired in 2007) and got a tour of the Utah lab and an early demo from its leader, Steve Jacobsen, for a photo essay in Technology Review.

My first impression from the demo last week was that not much has changed in the field in the past decade. That’s a bit surprising, since other kinds of robots—Predator aerial drones, PackBots, Roombas—have become increasingly sophisticated as they’ve been commercialized and deployed by the military. As it turns out, though, my first impression of the Raytheon device was not entirely correct.

“They’ve clearly demonstrated increases in strength,” says Hugh Herr, a professor who leads the biomechatronics group at the MIT Media Lab, which works on things like smart … Next Page »

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At Northrop Grumman’s unmanned systems development center in suburban San Diego, some folks are describing a $33 million contract that was announced today as “DARPA hard.”

DARPA is an acronym for the Pentagon’s Defense Advanced Research Projects Agency, and the two-year contract awarded to Northrop Grumman calls for demonstrating the feasibility of using one high-altitude unmanned Global Hawk aircraft to refuel another. The UAV-to-UAV in-flight refueling is to be completely autonomous, with the robotic aircraft using GPS navigation and optical tracking systems to approach, link up, and complete the refueling procedure. If successful, the first unmanned aerial vehicle (UAV) air-to-air refueling will mark a historic milestone—for both aviation and robotics.

UAV-UAV aerial refueling (photo illustration)

While mid-air refueling has been done with piloted aircraft since 1923, it remains a tricky and hazardous maneuver that requires extensive pilot training. In the case of two robotic aircraft, both UAVs must automatically adjust to turbulence and other environmental uncertainties while maneuvering in the thin air of high altitude (the Global Hawk’s cruising altitude is 65,000 feet).

“So this one definitely fits” the category of DARPA hard, says Mark Gamache, the San Diego-based director of advanced concepts for Northrop Grumman Aerospace Systems. In a telephone interview, Gamache tells me DARPA hard “means they only like to work on projects that nobody else would do.”

The Global Hawk was itself the product of DARPA-funded development during the 1990s, with the first seven aircraft built in … Next Page »

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Just because I’m not going to be Seattle editor anymore doesn’t mean I won’t miss these roundups. In the past week, we’ve seen some very interesting deals news from Northwest companies in the fields of energy, materials, and software. Here were a few of the top highlights.

—Nuclear-power startup TerraPower, based in Bellevue, WA, raised a whopping $35 million in venture funding from Charles River Ventures and Khosla Ventures. OK, $35 million might be chump change to Bill Gates and Nathan Myhrvold, who are also invested in TerraPower, but it could make a big difference in the company’s ability to develop a working prototype of its traveling wave reactor, which promises cleaner, cheaper, safer, and more plentiful nuclear power. Don’t expect that to happen before 2020 though.

—Polaris Venture Partners, which is based in the Boston area and has a Seattle office, closed on $233.8 million of a planned new $400 million fund, as Ryan reported. Polaris is known for its investments in companies like Alnylam Pharmaceuticals, Akamai Technologies, and GlycoFi, as well as for starting Dogpatch Labs, a community program to support entrepreneurs in San Francisco, New York, and Cambridge, MA.

—Luke previewed Bellevue, WA-based mobile software firm Motricity’s impending initial public offering this week. The IPO could net more than $85 million, according to investment bank Renaissance Capital. Motricity’s biggest stockholders are Advanced Equities, billionaire investor Carl Icahn, Technology Crossover Ventures, and New Enterprise Associates. The company was founded in 2001 in Oklahoma and moved to the Seattle area in late 2007, when it acquired the mobile division of Infospace for $135 million.

—Has there ever been a less-talked-about $1.4 billion deal in Seattle? That’s what … Next Page »

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