Print
Email
Print Edition StoriesFriday, September 18, 2009
Defense firms reach into cyber security, smart grid tech
By Jackie Noblett
MHT's Efrain Viscarolasaga: Tech companies may have to wait for stimulus funds
MHT's Efrain Viscarolasaga: Preparing the smart grid for more power
MHT reporter Efrain Viscarolasaga on NECN: Green tech brings jobs back to Mass.
The billions of dollars of stimulus and private money being pumped into smart-grid and renewable-energy network deployments has attracted some seemingly unlikely companies to the table, namely large defense contractors.
Earlier this month, Waltham defense giant Raytheon Co. was chosen by Arizona utility Tucson Electric Power to provide security systems for the IT backbone of its large-scale solar project, according to TEP’s grant proposal filed with the U.S. Department of Energy. Raytheon (NYSE: RTN) has aggressively developed its cyber-security business in recent years and announced this summer its intention to hire 150 “cyber warriors” to work in product development by the end of the year.
BAE Systems Inc., the Reston, Va., defense contractor with major operations in Massachusetts and New Hampshire, also is pursuing the smart-grid business, placing advertisements for infrastructure business development staff based out of its Nashua, N.H., facility.
The growing interest in the sector among big defense contractors is understandable, given the questions over the future of the traditionally booming U.S. Department of Defense budget. Like commercial aerospace, cyber security is an area where technology easily transfers between the civilian and government markets.
“More and more traditional defense contractors are trying to diversify their businesses so that if there’s a leveling off of the defense budget, they have additional customers outside the government,” said Donald Quenneville, executive director of the Defense Technology Initiative, a New England defense trade group. “Cyber is of course a domain, it’s not a technology per se, and certainly there is technology there that applies to things like the smart grid.”
Raytheon and BAE Systems have remained mum on the specifics of their smart-grid strategies. Raytheon launched its cyber-security business unit within its Information and Intelligence Systems group last April, taking parts of its internal networking group and combining it with Oakley Networks, an IT security firm it bought in 2007.
Company officials said the investment is tied to growing concern over electronic defense, both inside and outside the government.
“The political threat environment around the world is driving a lot of interest in our areas of strength,” including cyber security, said Raytheon Chairman and CEO William Swanson in a July conference call with investors.
Yet, unlike defense systems and other government networks, the IT infrastructure of utilities and energy generators is a hodgepodge of proprietary software and systems connected by transmission lines. Furthermore, the vulnerabilities of the smart-grid system are poorly understood.
Several groups are working to assess the risks to the smart grid and power markets, including the National Institute of Standards and Technology, a federal technology agency; and the North American Electric Reliability Council, an industry group charged with maintaining system reliability.
“There’s a big difference between federal government networks and control systems like power grids — the primary concern is on integrity and reliability of the system,” said Annabelle Lee, senior cyber security strategist for NIST. “For traditional networks the concern is security.”
Lee said officials at several defense contractors have teamed with her group to develop a systemwide risk assessment. They expect to release a draft road map of the security landscape next week.
But even after the threats are defined, she said it will take time to actually develop standards that work for both old-line power infrastructure and the new network-centric smart grid systems.
The challenge for both Raytheon and BAE Systems in gaining dominance in smart grid is not unlike the challenges in the traditional defense space. Lockheed Martin Corp. (NYSE: LMT) appears to have the early lead in announced smart-grid contracts, such as a $150 million deal with American Electric Power and $38 million smart-grid installation in Harrisburg, Pa., Aeronautics giant Boeing Co. (NYSE: BA) also has expressed interest in providing security technology to utilities.
.
RSS Feeds
Comments
Please Login/Register to post comments.
No comments have been added or approved.