Big Blue Buys Security Company, File Security Patents to Gain from US Defence Budget
Governments across the world have always been the largest IT spenders simply because the projects they embark upon are of titanic scale. Neither is it very surprising that that the segments within the government that spend the most are usually the internal security and defense departments. This is owing to the fact that an entire nation’s expectations lie upon them and IT helps them stay one step ahead of possible threats at all times.
The US government’s IT spending is predicted to grow from $73 billion in fiscal 2009 to $75.7 billion in fiscal 2010. IBM’s move to acquire National Interest Security Company (NISC) is a way for the company to tap and capitalize on this ever growing stable market by increasing its footprint in its public sector offerings.
NISC, a hitherto little known agency, provides services to various US government agencies including the department of homeland security in areas circling around sensitive technology and high end strategy development. The company has $200 million in revenues and 1,000 employees, 80% of who hold high-level security clearances and mostly work on classified contracts.
IBM is not relying solely on the expertise of NISC, however, to extend its range of services to the government. It has recently filed for dozens of patent applications related to security. These include new algorithms and techniques to beef up security in airports and other public places to counter terrorism.
"IBM's analytic and innovation prowess, combined with NISC's industry knowledge and depth of experience in defense, healthcare, energy and infrastructure management services, will allow us to deliver an unprecedented level of service and support to our growing list of government clients" said Chuck Prow, managing partner, public sector, IBM Global Business Services.
The deal with DC Capital Partners,the current owners of NISC, is expected to close in the first quarter of 2010 and includes the added acquisition of Technology and Management Services, Inc., an affiliate of NISC.
NISC will be integrated with IBM's Global Business Services unit and work with the Big Blue's Business Analytics and Optimization Services for Public Sector teams. The new Washington-based IBM Analytics Solution Center opened in November 2009, specializes in the work of the public sector.
IBM Expanding Public Sector IT Services
With the NISC acquisition IBM intends to move up the ladder from its current 18th position amongst Washington’s top IT vendors. Perhaps they are also looking at benefiting from the government's other key IT spending areas such as providing up-to-date infrastructure, healthcare and education facilities to its citizens through IT delivery channels.
The company is also looking at expanding its business analytics and optimization capabilities and services globally. In 2009 IBM bought business analytics company SPSS Inc for $1.2 billion to better compete against rivals like Oracle Corp and SAP. It has also opened five other analytics solution centers - in New York, Dallas, Berlin, Beijing and Tokyo - and expects to retrain or hire as many as 4,000 new analytics consultants and professionals globally as part of these centers.