TOP 100: Raytheon broadens tech offerings as market shifts

Raytheon Co. has reorganized and streamlined to be more efficient at the same it has broadened its technology offerings in areas such as missile defense and cybersecurity.

Whether a threat is kinetic or cyber, or comes from a terrorist group or a rogue nation, Raytheon offers the technologies to provide the U.S. government and other nations with the technologies to alert them to the threat and enable them to take action to neutralize the threat.

A NATO report identified terrorists attacks, ballistic missile attacks and cyberattacks as the top three threats facing governments around the globe, said Jack Harrington, vice president of cybersecurity and special missions within Raytheon’s Intelligence, Information and Services (IIS) business.

“Those threat environments are key, and Raytheon is well positioned in all of those,” Harrington said.

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Raytheon took a number of steps in recent years designed to increase its technology offerings in those and similar areas, and it enabled them to weather the U.S. federal government’s budget crisis with only a slight dip in annual sales last year.

“The company forecasted headwinds for some time,” Harrington said. “Everyone could see the budget constraints coming, [although] we didn’t see the government shutdown coming.”

The company had reorganized to become more efficient in 2013, expanded its international sales and even continued to invest in key U.S. defense technologies despite the implications of sequestration.

In January 2014, Raytheon reported 2013 revenue of $23.7 billion, which was down from $24.4 billion in 2012.

The company is ranked No. 3 on the 2014 Top 100 with $5.5 billion in prime contracts in fiscal 2013.

Harrington said that the company’s overall strategy is to continue to win new business in areas where it is a proven leader at home and abroad.

The company landed a $279 million contract in July 2013 for the Navy’s Next Generation Jammer program, as well as a $385 million contract in October 2013 for the Navy’s Air and Missile Defense Radar. 

“Both were programs we went after hard, and in the midst of the [budget] turmoil we invested in the technology regardless—and we won,” Harrington said.

Raytheon in March 2013 streamlined its operations by reducing the number of its business units from six to four, which are Integrated Defense Systems, Missile Systems, Space and Airborne Systems, and IIS.

The reorganization has produced substantial cost efficiencies, improved alignment with customer missions and enhanced cross-collaboration among units driving new sales, Harrington said.

As proof of its ability to win international contracts, Harrington noted that 39 percent of the company’s first quarter 2014 revenue of $5.5 billion came from international contracts.

“We’ve been in that game for decades with key customers, building those relationships and continuing to build from that,” Harrington said of the international market.

The company’s Missile Defense group continues to garner sales for the Standard Missile-3. For example, in March 2014 Raytheon won a $350 million contract from the U.S. Missile Defense Agency to increase production of the SM-3 Block IB missiles from eight to 44.

Raytheon IIS delivers cyber solutions to both domestic and international customers, and also is in the process of expanding its Big Data offerings through key acquisitions such as the purchase of Frederick, Md.-based Visual Analytics in June 2013.

As for cybersecurity, the Raytheon has a significant portion of the Defense Advanced Research Project Agency’s Plan X program, which was established to give defense components the cyber warfare capabilities needed to protect their network operations, Harrington said.

What Raytheon also brings to market is various commercial-off-the-shelf products designed to address a wide range of cybersecurity requirements, such as insider threat detection, analytics, and other needs. In the realm of Big Data, the company’s RTN Analytics and Intersect Sentry products are designed to help defense and other government agencies sift through large volumes of data and extract the most relevant data to support their intelligence or security needs.

“We see a lot of opportunity in cybersecurity,” Harrington said. “Customers come for the COTS solutions and also for the expertise we have regarding how to put in place a security operations center, how to put in place an emergency response team and how to protect critical infrastructure. There’s a lot of opportunity across the board in those high-threat segments.”