The international shift continues to gain momentum, particularly among the major defense players.
Lockheed Martin and Northrop Grumman have both announced actions in the last week that highlight how important international markets have become to them.
Coincidentally both of the announcements involve Australia, which looks like it’s become the launching point for a lot of activity in Asia.
Last week, Northrop Grumman’s Australian business unit completed the acquisition of Qantas Defence Services. The business provides integrated logistics, sustainment and modernization support. Most of its customers are with the Australian government.
The Australian Associated Press reported that the deal was worth $80 million and that the business had about $100 million in revenue last year.
The business has been renamed Northrop Grumman Integrated Defence Services and is now a unit of Northrop Grumman Australia, which itself connects back to the parent’s Northrop Grumman Technical Services.
“We expect this to be an important platform for international growth in our key focus areas of unmanned, cyber, C4ISR, and logistics and modernization,” said Ian Irving, Northrop Grumman chief executive for Australia, in a statement.
This week, the Australia Defence Science Technology Organisation announced a 10-year alliance with Lockheed Martin Australia for joint research projects in areas such as predictive logistics, trusted assurance, the Aegis combat system and other areas.
Raydon Gates, chief executive of Lockheed Martin Australia, said in a statement that the alliance will provide “important direction for future strategic investments in Australia and enable us to be more responsive to emergent customer requirements.”
Lockheed isn’t the only company to sign such agreements. The DSTO also has recently signed alliances with companies such as BAE Systems, SAAB and IBM.
Australia by itself is strategically important, just from the fact of how many shipping lanes pass near the country. Gaining situational awareness of that region is critical to international security and commerce.
And as Northrop said in its announcement, Australia is a great platform work throughout the region.
That companies such as Lockheed and Northrop are making investments in the region isn’t surprising, but what I wonder about is whether this activity will open more opportunities for other U.S. companies, particularly the next tier down.
Right now the international play is dominated by defense opportunities, but will we see that expand to more civilian operations?
If it will, companies will likely need to follow the pattern similar to Maximus, which has gone global with its social services expertise.
Maximus has an expertise that translates to nearly every country on the globe – building and managing systems that countries need to administer social services programs. Every country has a need here.
That’s the key for international expansion: Identify your expertise and then match those capabilities with needs in other markets. It could be cyber, financial management, modernization, data center consolidation. It’s a long list.
Stage two is identifying the specific countries to enter and how to enter them. You also need to identify who is providing those services today. They are your competitors and your possible takeover targets.
Stage two is well beyond my skill set, but we’ll be watching this international trend and who follows Lockheed’s and Northrop’s lead.
Maybe it’s time for road trip down under.
Posted on Mar 03, 2014 at 9:15 AM0 comments
Tom Simmons, the leader of Citrix’s federal team, knows what one of the next big things in the federal market will be. It is just starting to peek out over the horizon, but it still three or four years away.
A virtual desktop is where applications, the operating system, storage and everything else that now resides on your PC is housed in a data center – or several data centers – and is served up to your device when you log on. It is the long-talked about promise of the thin client and the concept of buying everything as a service.
The potential is there, as Simmons describes it, to save money, increase efficiencies, and improve security. Mobility and the need to access applications from any device and location also are driving the push for a virtual desktop.
It will enable organization to take advantage of the bring-your-own-device trend without sacrificing security. It can be a new line of business for systems integrators.
“It’s a transformational technology,” Simmons told me.
The virtual desktop allows for more centralized management of devices for activities such as patch management and roll outs of new applications. Controlling access is also easier and more efficient.
As a company, Citrix is betting that by 2015, the virtual desktop will have reached the same level of maturity in the commercial markets that virtual servers and storage enjoy today.
But it will take a bit longer to reach that level of maturity in the government market, Simmons said.
There are several challenges; the return on investment calculation is tough the first year because to the infrastructure needs to be built to support a virtual desktop platform, he said.
And unlike virtual servers and virtual storage, which basically only changed how those technologies were accessed, a virtual desktop is much more complicated, Simmons said.
“A virtual desktop is a platform,” he said. “You have to take into account all of things that go into your desktop environment.”
This includes managing applications, printers, storage, resident applications, virtual applications, the operating system, the server infrastructure and the network infrastructure.
“You have to get of all that right,” he said.
The approach to desktop virtualization is critical to its success. “If you treat it as a platform, the results are good,” he said.
Simmons points to the intelligence community where virtualization allows analysts to use a single computer to access multiple networks that isolated from each other. “They have 70,000 users on a virtual desktop environment,” he said.
“But when you treat it as just another applications, that’s when there is trouble,” Simmons said.
Systems integrators have been slow to jump on board because a virtual desktop has the potential to turn their business models upside down because it potentially changes how you bill customers and what you bill them for.
There are also issues to be figured out on the software licensing side of the equation.
He singled out Computer Sciences Corp. – a Citrix partner – as an example of a major systems integrator that has established a practice that specializes in virtual desktops. The company is providing virtual desktop services, known as workplace as a service to the Homeland Security Department.
CSC also is rolling the technology out internally, Simmons said.
More systems integrators will make similar moves as agencies look to buy more technology as a service, he said.
Adoption will gain momentum as success stories come out of DHS, as well as with projects underway at the State Department and what DISA is doing with its enterprise email offering (which is a step toward a virtual desktop platform), he said.
The General Services Administration also is taking a leadership role in this area, Simmons said.
Citrix, of course, faces competition for delivering this technology, primarily from VMware, and to a lesser extent, Dell. Amazon Workspaces also is a very basic form of desktop virtualization, he said.
“But our biggest competitor is the status quo,” he said.
Posted on Feb 28, 2014 at 11:30 AM0 comments
Justified or not, a lot of abuse has been heaped on CGI Federal for its work on the HealthCare.gov website.
In early January, the Centers for Medicaid and Medicare Services announced it would let its contract with the company expire at the end of February. No options would be exercised on the contract for the Federally Facilitated Marketplace.
A CGI spokeswoman at the time said it was a mutual decision, but many interpreted it as a firing.
But as February comes to a close, CMS is backpedalling a bit. It seems they still need CGI after all.
The agency has awarded CGI a $4.8 million contract extension to continue working on the health insurance exchange through the end of March – and the end of open enrollment -- to assure a smooth transition to Accenture, the new contractor.
CMS also has the option to award two more extensions to CGI, if needed, according to the agency.
The current extension includes a provision for CMS to have access to certain CGI experts through the end of April.
The award came on Feb. 21, but negotiations apparently got underway shortly after CMS decided to not continue with CGI and turn to Accenture.
The company has said little about the extension. When contacted, spokeswoman Linda Odorisio issued the statement that “CGI remains committed to its ongoing business relationship with CMS and the success of the federal health insurance marketplace.”
A source forwarded me a memo from James Peake, the new president of CGI Federal, written to employees on Feb. 24: “CMS’ request to extend our support of this program speaks to the deep knowledge and expertise of our CGI members.”
He went on to say that “our team has played a key role in improving the site’s performance, enabling a rapid response to the tens of thousands of concurrent users in their quest for health insurance. It is a level of effort of which we can all be proud and our ongoing support reflects our customer commitment.”
CGI isn’t taking a victory lap with this news, and it shouldn’t, but Peake is right to use this as an opportunity to repair employee confidence and boost morale.
Posted on Feb 28, 2014 at 12:47 PM1 comments