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Not all weapons in the U.S. defense arsenal are manufactured from metal and used on a battlefield. Some are reams of code in software and used on a computer.

That software helps examine mind-boggling amounts of information to find potential threats to national security. The field is called data mining, and it’s a major concern of Essex Corp.’s Melbourne operations.

The Columbia, Md.-based company employs about 60 people locally, primarily in software and in optical and digital signal processing.

Essex acquired its Melbourne presence as part of a series of acquisitions that contributed to growth that Vice President Rusty Topping terms astronomical. Topping became part of Essex two years ago when the company bought Computer Sciences Innovations, a Melbourne artificial intelligence company. CSI formed the core of Essex’s Scientific Systems Group in Melbourne.

It has plenty of company under the Essex umbrella. The company has grown from 35 employees in 1994 to over 760 today. Most recently, Essex purchased The Windermere Group, a Maryland engineering company specializing in video and audio surveillance and information assurance.

Strong organic growth along with that 2005 acquisition helped push Essex revenue to $159.8 million last year, more than double its $70.5 million in sales in 2004. The company expects to increase revenue this year to $210 million to $220 million.

As recently as 2000, the company turned in $3.3 million in sales.

Profit for 2005 was $8.6 million, a 274 percent jump over $2.3 million the year before.
Essex stock trades on the NASDAQ under the symbol KEYW, homage to CEO Leonard Moodispaw’s affinity for Key West. In late April, the stock was trading in the $21 range.
The company relies heavily on Defense Department contracts overall, including in its software work in Melbourne. Essex develops artificial intelligence software for high-end government and financial applications.

The buzzword is data mining, a form of predictive modeling using computers to aid reasoning because of the amount of data involved. Think of the sums of money moving around the world every day, and then imagine a financial institution trying to comply with the Patriot Act by reporting suspicious activity in funds transfers.

“The volume there is just staggering,” Topping said. Data mining software can help recognize patterns that could point to a threat.

A simpler example would be grocery shopping. Some stores hand customers coupons at checkout that -- lo and behold – mirror purchases they just made. Software helped identify items that customer would be likely to return and buy. Or, data mining can help an insurance company determine how much to charge for flood insurance in specific areas, based on claim history.

Essex focuses on specific problems, often dealing with national security. “We tend to address things that are on the high end of the spectrum,” Topping said. The company distinguishes itself, he said, by honing a solution to address more of the problem -- known as getting more lift out of the answer. “Sometimes that little bit of lift is worth a lot of money,” Topping said.

Also in Melbourne, the Commercial Communications Products Division (CCPD) develops products for the commercial and government optical telecommunications market. The division makes digital telecommunications components that convert electrical signals and send the data optically, increasing the amount and speed of data transmitted.
The division is participating in worldwide telecommunications standards organizations that will determine the future of optical communications networks. “We drive standards instead of sitting back and seeing what someone else is going to do,” said Mark Koontz, vice president in charge of CCPD for Essex in Melbourne.

The facility, on Evans Road, includes a small Special Projects Group charged with coming up with new uses for proprietary technology developed by the firm.

Toppings expects the three groups to grow, and Essex is ready. The company has planned space to the north of its building to accommodate a need for expansion.