One for the ages

Federal agencies seeking homeland security and other information technologies are finding fertile ground far afield ? in the British Midlands, birthplace of the 18th century Industrial Revolution.Once the stomping grounds of Robin Hood and Lady Godiva, the area that includes the cities of Birmingham, Coventry, Lincoln and Nottingham is in the midst of a 21st-century IT industrial revolution.In addition to hosting top U.S. integrators such as Computer Sciences Corp., IBM Corp., Unisys Corp., EDS Corp., Perot Systems Corp., Northrop Grumman Corp. and Lockheed Martin Corp., the Midlands, a cluster of some 11 counties and large cities about 50 miles northwest of London, is home to more than 7,200 software-related businesses, many of them homegrown. The region also boasts the United Kingdom's first business incubator dedicated exclusively to IT, and the new Technology Centre at the University of Wolverhampton is one of the leading IT facilities of its kind in Europe.Between 1999 and 2004, the number of IT and telecommunications businesses based in the Midlands grew from 14,540 to 15,730, and the technology labor pool increased from just over 75,000 to almost 89,000 employees.Midlands-based integrators and IT developers are not only selling to federal agencies in the United States, they also are buying U.S.-based firms and establishing deep roots on this side of the Atlantic. A British Midlands development office is in Reston, Va.One such company is QinetiQ plc, which in its formative years before World War II developed the world's first radar. The company now focuses primarily on security IT, has more than 5,000 engineers and scientists, has offices near Birmingham and many more elsewhere in the U.K. The company has U.S. offices in Arlington, Va.Bill Brickley, vice president of business development for the Midlands in Reston, described QinetiQ as "DARPA on steroids," referring to the U.S. Defense Advanced Research Projects Agency.Said to be the world's largest single repository of counter terrorist technology, QinetiQ provides IT services to the Homeland Security and Defense departments, principally through its umbrella organization QinetiQ North America and a growing number of U.S. subsidiaries that include Foster-Miller Inc., Planning Systems Inc., Westar Aerospace, Defense Group and Apogen Technologies Inc., which QinetiQ purchased in 2005 for $288 million.QinetiQ signed a definitive agreement in March to acquire ITS Corp., a provider of IT services and solutions to federal agencies. The $80 million purchase, expected to close by the end of April, calls for an additional deferred payment of $10 million subject to ITS' contracts in 2007.The company also recently closed the acquisition of Fairfax, Va.-based Analex Corp., a provider of IT professional services, including aerospace engineering and security and intelligence support for defense, intelligence and space programs.QinetiQ Chief Executive Officer Graham Love said the $173 million purchase will provide "important new customer relationships within the U.S. security agencies, the Department of Defense and NASA as well as broadening our existing service offerings."Ben White, media relations manager at QinetiQ in Britain, said the company has acquired U.S. firms "because it is more difficult for us to work direct from the U.K.""One of the roles of the new [U.S.] chief executive, Duane Andrews, is to draw together and exploit the synergies that exist in the acquired companies," White said. "At the moment, they still operate pretty much autonomously."Andrews became CEO of Arlington, Va.- based QinetiQ North America last June after working at Science Applications International Corp. as chief operatingofficer.Aurix Ltd., based in Worcestershire, England, is another U.K. company targeting the U.S. market. It has developed speech-recognition, identification and authentication technology, called audio or phonetic mining, for the past 50 years, originating within the British government. Spun off as an independent company in November 1999, Aurix is now largely owned by QinetiQ and has about 25 employees in Britain, said James Kirby, Aurix CEO.The company's audio-mining technology can rapidly analyze very large streams of speech to find specific words or phrases, said Martin Abbott, business development manager at Aurix."It is entirely a software-based product that can run on one or a whole set of PCs, depending on how large the system you require is. For example, a large call center might well run the product on several dozen PCs," Abbot said.The software also has homeland security implications, as it can analyze large data bases of prerecorded voice traffic off-line or in real time to search for targeted phraseology. "The software could be monitoring many dozens, if not hundreds," of audio streams simultaneously, Abbott said. That could be in the form of telephone calls, audio or video broadcasts and two-way communications devices, he added.Aurix has a sales office in New York that it is planning to expand. QinetiQ alsoprovides sales support. So far, Abbott said, call centers customers are the biggest U.S. consumers of the audio-mining technology."This is the first market that we have really penetrated in a big way," Kirby said, but he declined to discuss Aurix's federal customers or integrator partners."Three-quarters of our revenues are coming from North America," he said, "which is why we're expanding our sales force in the US. And we're finding a lot of interest in our technology."Kirby said audio mining is really catching on as a technology tool. Aurix sales are growing at about 200 percent annually, in part due to the growth of audio blogs that are joining the airwaves in addition to the traditional broadcasters. "The sky is the limit," he said.