Lucent Technologies – ProprietaryUse pursuant to company instruction

What Keeps Me Awake

Lucent Technologies – Proprietary

Use pursuant to company instruction

What I will cover Give my perspective of relationships with defence

customers from the point of view of:– A US company (as a non-US citizen)

– A large company

– A company primarily focusing on commercial telecomms markets

What the above means to us

Why it should matter to you, the defence customer

Lucent Technologies – Proprietary

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Relationships – Industry & Defence Paradigm shift to support NEC/NCO Move to COTS inevitable & desirable

– Speed of development

– Cost• Leverage huge market

• Take advantage of ease of update

– Basic existing commercial capabilities far outstrip those of military

Conclusion:– Military must adopt commercial technologies and expend

effort and cost in mitigating perceived weaknesses for military usage

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Relationships Harness capability – but how Hindered by vested interest and old style think Obvious concerns reflect problems of success

– Inability to accommodate reflects defence’s inability to accept risk

– But greater risks remain with defence because of this risk aversion

• Gulf War example

Dinosaurs continue to proliferate and to get their views into procurement documents

This causes new players to hold back and existing industry players to offer less than state of the art offerings

Lucent Technologies – Proprietary

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Industry Concerns (1) Look back into the defence procurement from the point

of view of a company such as mine:– A US company (as a non-US citizen)

– A large company

– A company primarily focusing on commercial telecomms markets

Lucent Technologies – Proprietary

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Industry Concerns (2) – US Company US Company - This itself has become a changed

playing field (*)

– SOX

– Aftershock of IT/Comms melt-down 2001

– ITARs

Result – Risk aversion

– Price hike

* (my view only – I attribute no views to other US companies)

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Industry Concerns (3)

Large Company– Process driven to response in standard solutions

– Margin driven

– Fundamentally different acquisition methods

Lucent Technologies – Proprietary

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Industry Concerns (4)

Commercial Market focussed company– Significant margins

– Little time to divert resources

– Open standards

– Procurement methods

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So What – For Us For us this means that dealing with the military is:

– Frustrating

– Disconcerting

– Bewildering acquisition processes

– Long lead in and little feedback (industry lives off feedback)

Apparent risks – Classic response - price hikes

• Afghan price increase

“Why are we doing business with these guys!”

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So What – For the Defence Customer

Will not get the benefit of commercial companies expertise (pace other commercial companies!)

Solutions will be optimised to reflect the worst case risks of both sides of the contract

Have not really entered into a partnership and have not really absolved themselves of the risks they wish to pass to industry

Late and inadequate comms infrastructure Ultimately the above factors lead to risks that put a

significant breach between companies such as mine and their ability to bring the benefits of modern communications initiatives to defence.

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What Might Improve This? Has to be a mechanism to allow innovative commercial

companies to contribute– UK ESII contract shows some willingness to tackle issue

Improve acquisition processes– Banal observation but need to:

• Improve visibility of requirement and milestones in process

• Greater interaction

• Improve quality

Defence needs to take on more of the risk– Afghanistan contract – who is responsible if an RPG goes

through the comms container

– BAA Experience

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PrologueIf we shadows have offended,Think but this, and all is mended,

That you have but slumber'd here While these visions did appear.And this weak and idle theme, No more yielding but a dream,Gentles, do not reprehend: If you pardon, we will mend.And, as I'm an honest Puck,If we have unearned luckNow to 'scape the serpent's tongue, We will make amends ere long;Else the Puck a liar call:So, good night unto you all.Give me your hands, if we be friends,And Robin shall restore amends.

– Puck, A Midsummer Night's DreamAct V, Scene IIW. Shakespeare