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IBM's Anonymous Move Into Privacy Software

Consumers who shop on the Internet willingly let their data be housed in repositories on the Web. The problem is, if a perpetrator knows where the information resides, he can access it fairly easily.

Imagine being able to exchange and store data while encrypting personal information from prying eyes.

Jeff Jonas loved this privacy concept so much, he decided to build anonymity software that safeguards people's identities during information exchanges.

IBM loved this technology so much, that it acquired Jonas' company SRD Software and its staff, a little known Las Vegas provider of software that "anonymizes" data so that it can be compared and analyzed without revealing private information.

IBM created the Entity Analytics division to support the anonymization product and released it last May, calling it DB2 Anonymous Resolution.

The software helps customers share records or documents with other organizations while protecting the identity of individuals involved in a data exchange.

The software, which IBM sells along with its DB2 Identity Resolution and DB2 Relationship Resolution precursors, is designed to thwart identity theft or accidental information disclosure. It employs irreversible digital signatures that keep data from being observed in its original form.

"If a backup tape falls off the truck, or someone hacks the system and someone can read the data about your customers, that's a bad day," said Jonas, now chief scientist of the IBM Entity Analytics division. "Our technique allows organizations to share data that has been anonymized first.

"What's unique about it is that normally I would encrypt and send it to you and you would decrypt it so you could use it. In this technique, I encrypt my data and you encrypt your data and all of the analysis is done while it's encrypted, never decrypted. You anonymize data into a form that is not mathematically reversible, kind of like shredding it on both sides."

The technology endured something of a buyer's evolution under the aegis of SRD, Jonas explained.

Casino gaming entities began using the technology to weed out scammers. Then the government got wind of it and started using it. Financial services firms were next.

If IBM can tap into the rest of the world's vertical markets, Jonas said the sky is the limit.

Ideally, this type of technology can help in such areas as privacy and regulatory compliance and in due diligence for mergers and acquisitions, or even in medical fields.

Several companies already sell identity management software, where users are given permission to access certain bits of information. This has become a multi-billion-dollar market led by the likes of Oracle, HP, BMC and IBM.

But Big Blue is the first to offer a full package of identity resolution, relationship resolution and anonymity that retrieves and sends data without leaving consumers' personal information vulnerable in the Internet vacuum.

Wintergreen Research Founder Susan Eustis said IBM has a huge lead on the nascent market and is well positioned to keep it if it can tap into more than just the financial services firms looking for such technology.

"I do think it's too early to say that they will succeed," Eustis said. "The identity parts of the market are small for banks, credit cards and insurances agencies -- $200 to $300 million -- but I think IBM will carry their products worldwide over time and expand their capabilities."

Eustis said Jonas and his team have created some "neat tricks" that enable the software to do real-time database searches. They are not your normal, everyday algorithms, she said. Should customers in other industries decide to buy into this technology, look out.

"Once you can speed up database searches in real-time... woaahh," Eustis added. "Those are $3, $4, or $8 billion markets."

Jonas has been certainly busy, educating politicians on the technology.

He has made several trips to Washington, D.C. to discuss disclosure control with senators. He recently testified on this issue before a Presidential council on privacy.

"I spend 40 percent of time on privacy and civil liberties issues these days," Jonas said. "A privacy strategist works for me. That ensures that the work I'm creating has the highest degree of privacy and civil liberty protections right out of the gate."