Pre-Merger Raytheon Well Placed in Cybersecurity Market
There are always changes to deal with when your job involves cybersecurity. For Dave Wajsgras, president of Raytheon’s intelligence, information and services division, the relentless ongoing evolution of the threat, and the need to find new ways to mitigate it, will become a subset of his business’s evolution over the next few months should plans announced last week to merge Raytheon with United Technologies Corp. come to fruition.
“Raytheon, as a company today, is going to go from basically five divisions into two divisions,” Wajsgras said when ShowNews asked him the obvious question here at the Air Show. “I run the IIS business; Roy Azevedo runs the SAS [space and airborne systems] business; and Matt Moynahan runs [cybersecurity joint-venture, 20% of which is owned by Vista Equity Partners] Forcepoint. Those are going to converge into one business.”
It is far too soon to get in to detail about how the new division will be run, but Wajsgras is certain about the fundamentals. In particular, the integration of Raytheon’s internal cybersecurity business – which deals with military and government customers – and the commercially focused Forcepoint is already deep and working well.
“The government side of the cyber business today resides in IIS; I also sit on the board of directors for Forcepoint so I’ve been very close to what they have been doing for a number of years now,” he sys. “We’re already doing a lot of things together. Forcepoint provides products into a lot of our solutions that we’re sell. We’ve already got a very, very strong partnership internally, and I think this [proposed merger] will enhance that even more.”
The way Raytheon and Forcepoint have been structured – to work independently but interdependently on cybersecurity programs – has helped the company avoid some of the problems other defense primes have had in this space. Still, there have been challenges.
“There’s a transition going on within our commercial cyber-products business,” Wajsgras acknowledges. “The older legacy product sets within Forcepoint have been on the decline, which is exactly what you would expect. The new products that we have been marketing and fielding are growing tremendously – 10%, 20%, in some cases even more. It’s all very positive and bodes well for the future. You’re going to see a very, very different picture of how successful Forcepoint really is.
“I’m continuing to be very optimistic on the strategy we put in place a few years ago,” he adds. “Granted, things didn’t transition as quickly as we would have hoped; the lack of demand for legacy products was much greater than we anticipated. On the flip side, as we put in these new capabilities and technologies, there’s a meaningful pull demand for what we do there. I would suggest this is going to play out pretty much as we have discussed a few years ago when we got into this. The timing moved to the right a little bit, but not all that much.”
As to what those new products and technologies are, Wajsgras is limited in what he is able to disclose in regard to technical detail, but he is willing to discuss concepts.
“We’re starting to use machine learning and high-end analytics in what we deliver,” he says. “But there’s a tremendous focus on what we’re calling the human-centric side – the insider-threat side of cyber. That is the centerpiece of what we’re doing, in combination with very high-end next-gen firewall systems, intrusion prevention and detection systems, [and] putting all that together, coordinating all that into one offering for very large enterprises, large enterprises, down to medium-size businesses.”
The end result, he argues, is that the business will go in to any eventual merger in a stronger position than many of its rivals when it comes to an ability to offer cutting-edge cybersecurity solutions to both government and commercial customers.
“You’ve got to look at the market as a whole,” he says. “If you look at a lot of the stand-alone large well-known cyber security companies in the space, their performance has been all over the map. Some have extremely high growth rates but have no profitability. Some are making a little bit of money but their growth rates are flat. I think the way we decided early on to manage Forcepoint is exactly the right model for a large aerospace and defense company. It’s a commercial business. It’s outside of our core customer group, has to be managed separately, and we’ve been very effective in doing that.”