Can IT keep Boeing's growth flying?

Boeing has put its focus on IT to help it weather the current budget crunch. Where is the aerospace giant placing its bets?

The terrain of the federal market became increasingly tricky in 2010, with tight budgets and new policy directions.

Boeing Co. relied on its skills learned from nearly a century of work as an aerospace and defense contractor to make gains in cybersecurity, information systems, satellites and infrastructure services.

A sign of those advances is the high profile of Boeing’s new Information Solutions Division, created five months ago in the Network and Space Systems business of Boeing Defense, Space & Security, the company’s largest public sector unit.

Boeing’s prowess as a prime contractor landed it at the No. 3 spot on the 2011 Top 100 with $8.4 billion in contracts. Its major customers are drawn primarily from the military but also NASA, the Homeland Security Department and the intelligence community. Recent reductions in major Air Force programs have caused Boeing to widen its focus.

The goal for Boeing now is to leverage the breadth and depth of its experience for expansion into key areas of federal contracting, according to John Hinshaw, who became vice president and general manager of Information Solutions in January.

Growth areas include cybersecurity, information management, global security systems, logistics command and control, satellite and ground operations, and infrastructure solutions. Add cloud computing to the list as well, which Hinshaw views as part of infrastructure and data center strategies.

Hinshaw’s own path is an example of the new paradigm: before taking his current post, he was CIO at Boeing in charge of cybersecurity for the company and its huge global supply chain. He draws on that depth of knowledge in helping secure networks for federal agencies.

“One of the first things our government customers say to us is, ‘Can you help us with cybersecurity?’ ” Hinshaw said.

Headquartered in Arlington, Va., Boeing’s Information Solutions unit has about 4,500 employees globally. Hinshaw also leads a companywide program to promote IT lines of business.

“Boeing historically has done a lot with IT, but it is usually embedded in our systems,” Hinshaw said. “Information Solutions was stood up to say that we have the capability to leverage what we have done, to leverage the corporate IT solutions for our supply chain, and to create a domain with our technical solutions.”

An example of domain-building is Boeing’s popular Visual Security Operations Console, used by the State Department for several years. Boeing is working with Honeywell International to expand the platform for a broader group of applications. Boeing’s IT domain expansion also benefited from several acquisitions in 2010, including the cybersecurity firm of Narus Inc. and command and control and combat systems provider Argon ST.

Boeing has an enormous base of military and other federal systems and products that it continues to service. Although its work installing the Homeland Security’s Secure Border Initiative network electronic border surveillance system in Arizona is completed, and the ambitious project has been sharply scaled down, Boeing is hopeful of opportunities in the next phase, which involves multiple solutions. “We are still very much engaged in SBInet. The technology we installed is working great,” Hinshaw said.

As the White House presses agencies for leaner operations and more oversight, Boeing has skills to offer from its commercial side, Hinshaw said.

“We are kind of unique among the major federal contractors because we have the commercial arm,” he said. “We have a broader perspective, which can be leveraged as the federal agencies are looking for efficiencies.”

About 44 percent of Boeing’s defense and services revenues come from military aircraft, 29 percent from networks, and 27 percent from services. “We are not an IT services company, but we have years of experience in networks,” Hinshaw said, adding that networks and services both have much room to grow.

“The U.S. federal market is our largest market so we are going to stay there, and endure there,” Hinshaw said.

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