By Geoff Fein
Boeing‘s [BA] recent acquisition of cyber software firm Narus will bring benefits to both companies as the global defense company and the network security provider will gain access to new and expanding markets, Narus’ CEO said.
“Clearly with the Boeing infrastructure and their global and international sales we expect to find ourselves part of larger defense oriented RFPs (Request for Proposals),” Greg Oslan, Narus CEO, told Defense Daily last week.
“We might find ourselves…where we become part of a much larger bid in a country where we individually would never have gone to,” he added.
One of the things that Narus brings to the table is that the company has a large commercial base, internationally, in many countries where Boeing doesn’t, Oslan said.
“They have a defense base where they sold predominately aircraft or parts into those countries, but not much on the commercial side,” he said. “Boeing’s hope is that they are able to leverage our presence on that for getting into the commercial side in those countries so they can leverage some of their other products in there.”
Boeing completed its acquisition of Narus in July.
Today, almost half of Narus’ business is overseas in countries such as India, Egypt, Japan, and South Korea.
Recent events on the international stage have led to more opportunities for the company, Oslan noted.
Following the 2008 terrorist attack in Mumbai, the Indian government mandated that every telecommunications carrier that offers Internet Protocol (IP) solutions must provide intercept capabilities to the government, he said.
“Since [India] mandated that for all the carriers, roughly one-third of the carriers use us to do that,” Oslan said. “A number of the major telecom carriers have RFPs out for solutions which, of course, we are bidding on.”
Along with the significant opportunity for growth in India, Oslan sees the potential for large growth in the Middle East as countries there begin to conduct intercepts and cybersecurity.
Oslan expects to see continued growth in Narus’ existing customer base in Japan and Korea. KDDI, the Japanese telecommunications provider, has been a “phenomenal customer” for Narus, he added.
“The U.S. government has been an accelerating market for us. We expect it to accelerate further for us,” Oslan noted.
Western Europe will be a new market Narus looks to enter as a result of the Boeing acquisition.
“We have not spent an enormous amount of time on Western Europe. That was more of a strategic decision. We are not that large of a company and we have to pick our battles and Western Europe was a difficult area for us to sell in,” he said. “That will be a new opportunity area for us with Boeing that we really haven’t penetrated much. We have a couple of customers but really have not had a large focus.”
As Narus’ business has grown, the recognition of scale has always been high on company officials’ minds, Oslan said.
“Two years ago we made the decision that the way we were going to scale both sales and support was to partner with large system integrators,” he said. “And it happed that the U.S. defense market was the most interested because their customers were demanding that they come to them with cyber solutions.”
The marketplace has struggled for the last several years, and is now beginning to learn that no one particular product or piece of technology is going to solve their cyber problem, Oslan said.
“It is going to be an ecosystem and it will consist of a product or solution of systems similar to Narus’,” he explained. “It will consist of firewalls and Intrusion Detection Sensors (IDS) and Intrusion Prevention Systems (IPS). It will consist of a forensic solution that allows you to store and search specific types of traffic, it is going to consist of a security event manager–something like an ArcSight.”
Narus was not going to put that together, Oslan added.
“We knew the ecosystem and we are partnered with all those types of companies. But a company like Boeing has the opportunity to pull all that together, and they have done just that with the solution they built and will be rolling out to the market sometime next year,” he said.
Boeing provided the ideal opportunity for Narus, Oslan said.
And there was a shared vision and recognition between the two businesses that the Chicago-based aerospace company needed to keep Narus as a separate entity within the big global infrastructure of Boeing, Oslan said, “to allow us to maintain our entrepreneurial spirit…our rapid ability to make decisions.”
“We closed the acquisition last week. We will remain a wholly owned subsidiary within the [Boeing] Network and Space group and it allows us the opportunity, with Boeing’s support and investments, to begin to really grow and scale the businesses globally,” Oslan said. “The entire management team and the rest of the employee base will be staying and we will begin to add people around the globe to grow the business.”
Narus had its own independent plans for growth, he said, but with Boeing’s support that effort will be significantly larger over the next couple of years and over what Narus would have been able to do on its own.
“While we are not talking specific numbers, in terms of percentage, 30 percent plus growth in the employee base over next 12 months or so is fairly likely,” Oslan said.