Across the Digital Nation: States eye companies with C4ISR capabilities

Homeland security continues to be an important yet underdeveloped market opportunity. Since Sept. 11, 2001, first-responder organizations have been at the center of how the market would develop and mature. However, most new funding for first-responder initiatives has been allocated more to boots, suits and overtime, rather than to complex information technology development. Other than the creation of multi-jurisdiction communication networks and integrated criminal justice information systems, the information technology opportunity has yet to fully materialize.But over the past six months, there has been a notable uptick in interest for more sophisticated services to help first-responder organizations. In particular, state and local governments are voicing increased interest in applying the methods of federal command, control, communication, computers, intelligence, surveillance and reconnaissance (C4ISR). These services draw upon years of extensive application within federal defense, armed forces and intelligence communities. Several states have expressed interest in understanding how C4ISR can be applied most effectively to their organizations, particularly how it can be used to develop more sophisticated emergency operation centers. This would include adapting cornerstone public safety applications, such as computer-aided dispatch and biometrics with video surveillance, sensor technologies, integration with key federal databases and secure communications devices.Concurrently, the funding stream from the Department of Homeland Security has begun to open up. Over the past three months, about $400 million in grants has been allocated to help state and local governments enhance preparedness and response capabilities. Seven states recently received at least $25 million, with Texas and Florida leading the pack at $78.2 million and $62.7 million, respectively. This is on top of approximately $4.4 billion for first-responder operational issues since the beginning of the year.This trend toward a command and control approach to resolving the homeland security issue within state and local government is a potential windfall for traditionally federal-oriented vendors. Given their C4ISR experience with defense agencies, armed forces and intelligence organizations, federal vendors have a unique insight to bring to this emerging issue. Moreover, these vendors have established relationships and proven implementations with federal agencies that represent impressive credentials to state and local government enterprises looking to replicate similar systems implementations.Despite the increased interest in C4ISR capabilities, vendors that traditionally have focused on the federal market may not be able to make significant inroads within the state and local marketplace.Historically, the competitive landscape in state and local government is littered with federal vendors unable to make the proper business alignment with the unique characteristics of this extremely decentralized market. Given a market segmentation of 50 states, 3,200 counties and 19,000 cities, federal vendors will need to develop new business models to be successful with these organizations. Moreover, federal vendors new to the market will need to adapt messaging, sales force deployment and pricing to do business with state and local government organizations. Lastly, federal vendors may need to develop solid partnerships with prominent state and local integrators in order to best penetrate the market.There are some federal firms with a base of state and local government first-responder clients. Companies such as Northrop Grumman Corp., which has a list of prominent clients in this market, are better positioned to translate this increasing customer interest into tangible opportunities. Whatever the outcome, the competitive landscape will certainly be more active over the next six months.Rishi Sood is a principal analyst with Gartner Dataquest in Mountain View, Calif. His e-mail address is rishi.sood@gartner.com.