Continued success of Government Systems division driven by culture of innovation and technology leadership
Ken Peterman, president of Government Systems at Viasat, is passionate about key technologies and capabilities he says will transform warfighter safety and mission effectiveness. Those include assured connectivity, satellite communications and cybersecurity — all three of which the company has deep expertise developing and delivering to U.S. and international government and military customers.
Along with the technology itself is the need to move past traditional slow-moving government procurement processes, where it can take up to a decade to field new technology.
“The technology is moving at a pace where maybe each generation of technology is coming around every 24 to 30 months,” Peterman said. He added that the challenge wasn’t as great in years past when the government itself was driving first-time innovations.
“Today, technology leadership has crossed over to the private sector, and the private sector is accelerating technology innovation way faster than the government budget and acquisition process can move,” he said.
By working closely with its government customers, Viasat has a clear window into what’s really needed in the field, and an agile development process that can put the needed technology in the hands of warfighters much faster.
Ultimately, Peterman said, giving soldiers the same kind of technology capabilities and ubiquitous connectivity they’re accustomed to in civilian life is the way to make them safer and more effective across the battlespace.
In this podcast, he talks with Alex Miller, editor of the Viasat corporate blog.
Alex Miller: Welcome to the Viasat in Conversation podcast, I'm Alex Miller with Corporate Communications, and with me today is Ken Peterman, president of Viasat Government Systems Division. So Ken, I know it's been a busy time for government services with some impressive contract wins and strong financial results over the last year or so. Thanks for taking the time to catch up with this on the podcast here in. Since it's the first time we've been speaking with you, I thought for starters, maybe you can just tell us a little bit about your role at Viasat.
Ken Peterman: Thank you, Alex. Yeah, it's an exciting time. I think it's an exciting time at Viasat. In large part, it's an exciting time in our entire market segment. What we're seeing is that the key technologies that are going to enable our defense organizations and our customer community, our warfighter customer community going forward are assured connectivity, both line of sight, mobile networking as well as beyond line of sight, satellite communications, because it's that connectivity that is really empowering. And then I think cybersecurity is also the third leg of the chair because the connectivity is important. It needs to be assured, it also needs to be secure. So the organization that I lead at Viasat is deep and has a really a world leading capability in terms of technology in these three market segments of mobile networking, satellite communications and cybersecurity. We have products and services that we bring forward that come from those three technology sectors. And then of course, we have a unique culture at Viasat, a culture of innovation and employee empowerment, where we really seek to enable our employees to unleash their passion in the areas that they really care about. So in our government business, of course, many of our employees are former veterans and wore the uniform and then we have some fantastic engineers and technologists. So a big part of my job is to bring those two together so we can identify the real capabilities and problems that our customers need to solve. And we can put our our technology and our culture of innovation to work to solve those problems in truly innovative ways that are game changing for our customers and create customer outcomes that they didn't otherwise think were possible. And that's an exciting place to be. We're doing great things at Viasat.
Alex Miller: Ok, so speaking of great things, Viasat has been recognized as one of the fastest growing defense businesses in the industry. So I was wondering if you can tell tell us what contributes to that continued success year after year. And I think you alluded to it some, but maybe you can expand.
Ken Peterman: Yeah, well, you know, it's founded in our in our technology strength and in our culture of innovation. But I have to say that the technology sectors we're in are exciting sectors. They're very vibrant sectors to be in right now. Mobile networking, satellite communications, cybersecurity data links are a big part of that. And these technology sectors are fast moving sectors in their own right. But in large part, our growth is driven not just by that, but our growth is driven by the fact that we're able to bring these different technologies together. And they're really companion technologies. We can bring them together to create operational capabilities and enhance the mission threads or the mission effects that our customer community, our defense warfighter customer community is trying to create. So by bringing together mobile networking with satellite communications and link cybersecurity on top of it, we can enable our customers to be able to do things they didn't think were possible before. So we're not just selling products and services in our Viasat government business. We're actually creating turnkey operational capabilities that can be put immediately to work for our soldier customers to be able to do things they've never thought were possible before.
Alex Miller: So kind of following on that with Viasat fiscal year ending March 31. First, what would you say are some of the key takeaways for our government business in terms of successes and then going forward?
Ken Peterman: Well, we have we have successes across the board. We have started to move aggressively in our cybersecurity and information assurance business. And we are becoming and I think are clearly the market leader now in this information assurance cybersecurity area in a defense context. We're bringing forward Type 1 cryptographic gear that moves ... that supports ever faster information exchange rates and is keeping pace with the move from slower data rates to medium data rates to the exceptionally high data rates that are needed for cloud connectivity. And we're able to bring those technologies and those capabilities forward faster than than others in our market segment. As a result it's creating significant increases in market share for us. In the areas of satellite communications, of course, we lean heavily on our commercial ... and in our core technologies of Ka-band satellite communications, which our ViaSat-1 and ViaSat-2 satellites have set all kinds of records in terms of technology capability, of capacity, and that kind of thing. And we're making sure that those satellite technologies can serve our defense customers just as effectively as they can serve our commercial and residential customers. So we're bringing our defense organizations and our military customers satellite communications capability that is more resilient and more capable than ever before. And we're bringing forward new thought-leading concepts -- concepts like the hybrid adaptive network architecture, where we're encouraging defense users to continue to use their military purpose-built satellite communications networks, but also to be able to roam seamlessly onto commercial networks like ViaSat-1, ViaSat-2 and increasingly ViaSat-3, which will have a global footprint, so that they can exploit the increased resiliency and security of roaming among all of these different networks -- just the way your cell phone roams among different networks in civilian life. It provides assured connectivity. It provides security, it provides the ability for our warfighters to take advantage of the cutting-edge technology leadership coming forward from the private sector. And so they're able to experience these new technologies much faster and much more affordably than ever before.
Alex Miller: Right. And I've heard you speak and also write about how, you know, today's young warfighter going into the field who's used to having a, you know, an iPhone with all kinds of amazing capabilities suddenly thrust into a world where that technology is not quite there on the battlefield. And can you speak a little bit to how ... how do you what does that that technology that we're so used to in civilian world, what does that look like translated to the battlefield?
Ken Peterman: Right. Well, see, that's in large part, that's what's that's what's enabling our rapid growth and that's what's enabling Viasat's defense business to outpace others in our market segment in terms of both growth from a revenue perspective, but also growth from a market penetration and expansion perspective into new markets, new capabilities and to move and to scale globally across the U.S. and FVEY countries. So we're moving, we're experiencing growth vertically and horizontally. And it's a challenging time. It's a very rewarding time for us. But to get back to your question with respect to ... you know, a young man or woman in our civilian life in the United States grows up in a connected world, they really don't know what it feels like to not be connected. And they use that connectivity, they leverage that connectivity in a diverse set of ways. I mean, they communicate to their friends. They have a knowledge of the world around them. In fact, they connect to the cloud on a routine basis. And the cloud actually proactively tips and cues them with respect to events that are going on in the world around them that are relevant to them. It doesn't just tip and cue you with respect to a flood of information that might be overwhelming or actually slow down your cognitive decision process, but it has the cloud in our civilian world has the ability to know what information is relevant to you and the time that it is relevant and to push that information forward to you at the right time so that it actually accelerates your ability to understand the world around you and make decisions in a faster way. That's the kind of capability that our warfighter customers, our defense customers desperately need. They need to be able to have the connectivity that's assured to provide them cloud access so that it can clear the fog of war and it can provide the ability for them to execute decisions faster by knowing with confidence and with assurance where their buddies are, where the adversary might be. The types of tactics and procedures that are best suited for the current situation to be able to navigate in that fog of war with the same kind of clarity as they do in the civilian world is what we're about at Viasat. We're about bringing first the underlying connectivity that has the capacity, the speed and the assurance and the security to make sure that our warfighters are connected. That is the fundamental foundation upon which other capabilities are added. But then bringing cloud connectivity, streaming video, those types of things forward to our warfighters so that they have the same capability when they're in the stress of executing a complex, dynamic mission as they have when they're in civilian life. It's important. I think in large part the cognitive decision needs of our young men and women have grown to rely on or become dependent upon this type of connectivity in cloud empowerment. And so we need to make sure they have that same connectivity when they're in perhaps the most stressful situation in their life, when they put on a uniform and go into harm's way, possibly, to serve this nation, we need to make sure they have the same capability there that they've grown to depend on it grown up with. Okay, then that's what we're doing at Viasat. We're passionate about that.
Alex Miller: Right. It makes total sense for, you know, a warfighter on the ground to have, you know, whether it's a handheld device or mobile phone or whatever it is to have that visibility. But, the other side of it is when you've got, you know, airplanes that are connected that can stream live video when you're going into, say, a theater of some sort. You've got a lot better information about what what you're going into than previously.
Ken Peterman: Well, there's an enormous amount of information on the battlefield. I mean, fighter jets are like sensors. They connect enormous amounts of information. And the challenge sometimes is how do you get that information off that aircraft and into the cloud. So the entire battlespace, the entire force structure can benefit of it. And so that additional data, OK, can be part of the processing calculus and the algorithm that sorts out the entire situation and clears the fog of war so we can see with clarity about what's going on and how to be effective in that environment, how to operate safely in that environment, how to protect and avoid collateral damage in an environment, how to avoid fratricide in that environment and still execute the mission effectively and safely. That's the kind of thing that the connectivity can bring. So what we found is that part of our success in our Viasat business has been to partner our veteran uniformed warfighters with our engineers and technologists so that we can put this technology to work in many ways proactively, not waiting for a requirement to be validated through the formal acquisition process, not wait for the acquisition process to put out a request for proposals to offer a solution to something, but actually have the intimacy of our customers' world to know their job as well or better than they do, so that we can proactively bring this technology to work to solve the problem that we know they have before they ask to have it solved. OK. It's a kind of, you know, Henry Ford had this quote that said, all my friend, all my customers ask for faster horses. But in fact, he knew that they had a transportation problem and he brought them an automobile and solved the problem in an innovative way, in fact, a much more better and comprehensive way than faster horses ever could. And that's the kind of thing we're trying to do at Viasat, is we believe that by partnering our veteran uniformed warfighters with our engineers and technologists, we can we get we have a lens now where we have improved clarity of where we can really understand the warfighters' world and we can bring them connectivity and cloud empowerment and package in a way that actually delivers to them a capability that accelerates their decision processes. It brings clarity, it brings higher confidence that they understand the world around them. And fundamentally, that enables them to be more mission effective and enables them to be safer. And that's really important to us. We're passionate about that. But the ability to move proactively in these markets is one of the things that's differentiating our business than others in our market segment that are waiting, waiting for the customer to ask for something.
Alex Miller: Right. And quickly, also, I know you've spoken also about, you know, sort of technology and bureaucracy don't necessarily get along. I mean, by the time some of these these purpose built things on government contracts come to market, they're already obsolete.
Ken Peterman: Yeah. Well, you know, here's the thing. The Institute for Defense Analysis has done some studies, other groups have done some studies. And, you know, the timeline for a formal government acquisition is 8 to 11 years to go from validating that their requirement for a capability to actually put in that capability on contract budgeting, the money to buy it and having a contractor on contract to deliver it. So the timeline from validating that requirement to actually putting first capability or an initial capability into the first soldier-sailor-airman's hands is often an 8 to 11 years. Okay. Well, the technology is moving at a pace where maybe each generation of technology is coming around every 24 to 30 months. So in a situation where the acquisition process is taking four or five times longer than the technology trajectory is moving makes a very challenging acquisition environment. Now, it wasn't this challenging 10 or 15 or 20 years ago because the defense industrial base was inventing these technologies for the first time. Satellite communications, cybersecurity, mobile networking had never been done before until these technologies were invented to empower the warfighter, to be able to have situational awareness and be able to communicate and be able to understand the world around them. But today, technology leadership has crossed over to the private sector and the private sector is investing funds way faster than the government budget process can move. And the private sector is using agile development processes to accelerate the pace at which the technology is being developed. And then the private sector is using what we call a DevOps model, where once the initial capability is fielded, we continue in real time to upgrade the software and enhance the capability and optimize the network performance and improve the cyber defense and those kinds of things so that the fielded technology that might be in your smartphone or might be in a mobile networking cellular network or satellite communications network in the private sector of the civilian world, that kind of technology is constantly being upgraded as you use it. OK, and so then the private sector, we're able to keep pace with this rapid accelerating technology trajectory. In the defense sector, the acquisition process has not adapted as readily in the sectors of mobile networking or satellite communications or cybersecurity. So in those sectors, Viasat's able to move proactively forward and implement these commercial business practices. These private sector speed and agility, we're able to move forward and use those practices which we've proven and have knowledge of and are skilled in in the private sector -- we're able to bring that to the defense sector to the benefit of the warfighter. So we're able to bring a sometimes technology-starved warfighter customer cutting edge technology and then keep it cutting edge by providing this capability as a service or using a DevOps model where we're constantly upgrading it to deal with constantly changing cyber threats, constantly changing missions, constantly changing new concepts of operation where they want to deploy differently or deal with different events that they hadn't anticipated or trained for or bought equipment for just a year or two before. So that's where we're really differentiating ourselves. And I tell you honestly, the culture of innovation and entrepreneurship at Viasat is perfectly suited to lead the pack and differentiate ourselves in this environment. It's just a great place to be.
Alex Miller: All right. Well, kind of following from that, you know, we just had the fiscal year 2020 Department of Defense budget proposal announced. And I was wondering from our perspective, what stood out to you the most about the budget proposal? We know it's going to go through a lot of permutations and congressional approval but ...
Ken Peterman: Well, one of the things I think that I'm very impressed with is the bold leadership on the part of some in our defense community, our uniformed defense community, where they're actually taking the bold step, the unprecedented step to publicly announce that they're going to stop or change or I think in the Army, nearly 100 programs are gonna get stopped and relooked at because what's happened, they've discovered that the acquisition process is moving too slow. The pace of technology is moving much faster. And as a result, that thing which they're in the middle of buying is already obsolete. So in some ways, it is a bold and courageous step to publicly confront that reality and say 'this doesn't make sense anymore and we're going to stop it, and we're going to redeploy the money and we'll look at buying, not only buying something better, that's more current state of the art, but we're going to look at buying it differently, possibly buying it as a service or buying it in such a way that we can ride this continuum of technology trajectory.' So the warfighter is constantly getting refreshed and updated with the latest capability, the latest software, latest hardware, latest cutting edge technology that deals with the cyber threat or whatever it might be, and not just by a point in time on that technology trajectory and then live with it for 30 years. Okay. So I see in the budget ... evidence that leaders are confronting the reality of this technology crossover to the private sector and they're seeking innovative business methods, business models to be able to buy that technology and keep our customer warfighter state of the art and boy, we are totally on board that and partnered with these with these thought-leading government customers in order to to play our role in bringing that transformational change and acquisition to a reality.
Alex Miller: All right. Well, Ken, thanks a lot for taking the time to talk with us today. And I guess we'll we'll see what happens going forward. But it looks like Viasat's positioned really well to take advantage of that kind of new mentality coming from the DOD.
Ken Peterman: Thank you, Alex. It's a pleasure talking to you. You can expect great things from our Viasat organization because our people are the most passionate, innovative and talented that I've ever seen. And we're going to deliver remarkable capabilities to our warfighter faster and more affordably than ever before.
Alex Miller: Alright, thanks again Ken.
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