TOP 100

Lockheed marks last year as No. 1 on WT Top 100

Lockheed Martin Corp. has had a great, long ride a top the Washington Technology Top 100. For the 22nd consecutive year, the company is ranked No. 1 with $11.6 billion in prime contracts.

The company first captured the No. 1 spot in 1994 after it was formed through the merger of Lockheed and Martin Marietta. It was led by the legendary Norm Augustine, who set the company on a consolidation course that continues today.

Through the late 1990s and well into the 2000s, the company made many IT related acquisitions, solidifying its position as the top services provide to the government. It added capabilities in seat management, networking, cybersecurity, IT services, systems engineering, health care and the list goes on and on.

In the last decade, two factors have driven the company to reorient its IT business: First, the government began paying closer attention to organizational conflicts of interest, which led Lockheed and other defense companies to shed business units.

At the same time, the federal IT budget, which had been growing steadily, began to fall and has dropped significantly in the last five years. Margins tightened and competition increased. Lockheed found it harder and harder to compete on price while maintaining the kind of profits that investors wanted to see.

In a nutshell, that brings us to today and to what is likely Lockheed Martin’s last stand as the No. 1 company on the Washington Technology Top 100. The company is selling its Information Systems and Global Solutions business to Leidos for about $5 billion.

Lockheed is shedding the work it does around IT modernization, biometrics, some cybersecurity, cloud computing, health, data analytics and air traffic control.

But the sale to Leidos isn’t a complete exit from the IT world. The company is keeping its Mission IT and services programs. These support the company’s platform business. This likely will be its largest remaining IT work when you consider the platforms the company builds – missiles, missile defense, naval systems, unmanned systems, launch vehicles, etc.

They all need software, cybersecurity, training and supply chain management. IT is embedded into everything they do.

And cybersecurity as a stand-alone technology and services offering will continue to be an important part of Lockheed’s business.

The company also is keeping work where IT is a differentiator and can help it drive higher margin work.

For example, the company has been doing a variety of energy related work over the last decade and now it has pulled all of that business into its own unit called Lockheed Martin Energy. It includes energy management capabilities as well as cybersecurity.

Lockheed Martin might drop from No. 1, but it will still be a force to reckon with in the federal IT market.

About the Author

Nick Wakeman is the editor-in-chief of Washington Technology. Follow him on Twitter: @nick_wakeman.

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