The worst of times, the best of times - A 2009 market and technology view

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February 10, 2009

Editor Chris Ciufo shares his perspective on the military market and important technologies for 2009.

Happy New Year.

Doesn't feel that way, does it? On this day in January 2009, we have a new president, but world economic and stateside embedded market events point to a brewing crisis facing our country, our companies, and our personal off-hours lives. Hopefully you are one of the lucky many who are keeping their heads down and staying busy. Perhaps you're one of the unfortunate few who is out of work. For that, I am sincerely sorry.

The Navy uses the expression "Battle stations!" when exigent circumstances threaten the vessel. Immediately all routine tasks and operations stop and priorities change in an instant - galvanizing sailors and officers into protecting the vessel from sudden, unexpected danger. But even amidst shouts of "Battle stations!" by pundits, there are opportunities for many companies that could actually precipitate the best of times. Here are some of my views on the market and on key technologies for 2009. But first a big caveat: No one has ever seen anything like this before, so keep your wits about you.

DoD budget, programs, and funding

You'd be a fool not to recognize that the Bush administration overspent massive amounts of money on defense and prosecuting the Global War on Terror (GWOT) over the past eight years. According to information published by Aviation Week based upon data from Standard & Poor's and Thomson Financial, U.S. cumulative national debt was $10 trillion on Sept. 10, 2008 - a staggering $33,000 per person - and that was before the economic bailout packages. The DoD's budget (excluding plus-ups) has been growing 4 to 5 percent above inflation since 2001. The current FY2009 DoD budget is $515.4 billion with another $70 billion estimated for the GWOT (www.whitehouse.gov/omb/budget/fy2009/defense.html), although it's anyone's guess what President Obama will do to former President Bush's budgets.

Still, it's unlikely much will change in the next 12 to 18 months. DoD budgets have tremendous inertia, and the slope of the curve - up or down - takes several cycles to move. While Obama redeploys troops out of Iraq and into Afghanistan, ongoing operations (O&M) will continue, and any technology that has a quick benefit for war fighters will likely survive. If you have contracts or technology attached to communications, counter-insurgency, ISR, and force protection, you're in good shape in the short and medium term. But many big strategic programs with roots in the post-Cold War era are going to be under pressure simply because our new president has a different set of values.

F-22 - an Air Force favorite not shared by the SECDEF - and DDG-1000 (despite its groundbreaking technologies) are probably too ambitious for now. F-35 is in good shape due to commitments to our allies, and well-established satellite/GPS communications gear will get the green light. Finally, I stand by my oft-repeated assertion that the Army's FCS will prove to be more of an applique-like feature enhancement on mostly existing platforms than an entire vehicle-building exercise.

Step back for a moment, and you'll see that we need to move materiel and fuel so cargo transport, tankers, and ships will get funding. Submarines, UAVs, and C4ISR provide good standoff capabilities, and existing pointy-nosed aircraft (USAF and USN) are probably sufficient for a while. Thankfully, the Marines, Special Forces, and Army finally get their due with better equipment, munitions, survivability, and - thank heavens! - long-needed diplomatic training to meet the necessities of modern urban warfare. Technology can help, big time.

Hot technologies

In fact, almost-certain changes in political direction will affect military doctrine and training, giving us a view of some hot technologies used by the military over the medium term. In situ embedded training will prepare war fighters for rapid redeployment to global hot spots, relying heavily on multimedia digital battlefield comms gear. High-performance pipes using whatever transport layer is available (copper, fiber, and RF) will need encryption, deep packet inspection, compression, and especially information assurance. This all points to VITA and PICMG technologies; SDR, cellular, UWB, and other civilian communications; as well as deploying COTS multimedia gear that has already debuted in your living room entertainment system.

Information assurance and security will require secure operating systems, mission-critical software applications and tools, and increasingly anti-spoof and -tamper techniques to prevent lost or stolen battlefield assets from becoming tools to our enemies. In the embedded space, innovation will be very difficult on the hardware side unless it's in the packaging or power management areas. Software (applications and IP) personalized in FPGAs and ASSPs is where designers need to put their efforts.

Advice to employers and workers

Finally, it's essential that companies realize that last year's company Strategic Plan is pure junk in today's economy. I’m a big planner and always advocate taking a strategic view, but Sun Tzu advocated changing strategy when the game completely changed. That's right now. So stay alert to the changing battle conditions, and you might possibly turn turmoil into the best of times for your company and yourself.

Chris A. Ciufo Group Editorial Director [email protected]