Lockheed: Networks, not just aircraft

Lockheed Martin may be known for products such as its F-16 fighter jet, but the top U.S. defense contractor is staking its future more on the advanced computer networks than on aircraft, a recent Reuters report said.

According to Reuters, Lockheed chief executive Bob Stevens recently outlined for reporters the Bethesda, Md.–based company's evolving business strategy in a board room featuring models of its aircraft, including its latest contract win, the U.S. presidential helicopter.

Over the past 12 months, the company has won several contracts based on its ability to link communications systems, sensors and weapons.

"As we think about the future ... we're increasingly focused on the power that information provides, particularly information that can be assembled in an increasingly collaborative environment," said Stevens in the Reuters report.

It took time, management changes, and a few high-profile losses to Boeing to put Lockheed on its new business path, the report said. However, Lockheed now is forecasting sales of $36 billion to $37.5 billion for 2005 after $35.5 billion in 2004.

Analysts said that Lockheed's pursuit of network-related business could be fruitful.

"There's an awful lot of value in data networks and information architectures," said Richard Aboulafia, analyst with the Virginia-based Teal Group, in the Reuters report. "It's a universal value; you can apply to it a variety of military systems."

According to the Reuters story, Stevens said Lockheed Martin's primary markets for systems based on this "powerful dimension of information technology, situational awareness and enhanced collaboration" were traditional defense agencies, homeland security, intelligence agencies and, increasingly, civilian government agencies.