BAE looks to draw government cyber work

BAE Systems Program Director Leigh Palmer walks past displays at the Leading Edge Network Operations and Security Center in Columbia, Maryland, May 24, 2010. A team of analysts at a new cyber center run by the North American unit of Britain's BAE Systems are using a wide range of tools to identify potential attacks, correlate data from around the world, and preempt future hits. Picture taken May 24, 2010.

COLUMBIA, Maryland (Reuters) - Threats to sensitive computer networks lurk everywhere and with a few mouse clicks, organized criminals and hackers could shut down vital networks that run the U.S. government, industry and military.

But a team of analysts at a new cyber center run by the North American unit of Britain's BAE Systems are using a wide range of tools to identify potential attacks, correlate data from around the world, and preempt future hits.

"Our adversaries will hide. They have every motivation not to be seen," said Harold Jones, technical director of cyber warfare and cybersecurity for BAE Information Solutions.

Growing concern about cyber attacks is fueling a market valued at around $30 billion a year, prompting new investments by BAE and other defense companies that are keen to offset an expected flattening in spending on more traditional weapons.

BAE is the latest company to open a new cyber center, a $10 million facility in an industrial park about 30 miles north of Washington, D.C., where 20 analysts track intrusions to BAE computer networks around the world, eliminate threats, and try to anticipate potential vulnerabilities.

The center is part of BAE's investment of around $50 million in infrastructure and new tools the company hopes will help it win hundreds of millions of dollars of military and civilian government cyber contracts in coming years.

BAE, one of the Pentagon's top 10 contractors, is also on the lookout for acquisitions to boost its position in the emerging cyber market, said company spokeswoman Sue Cushing.

Cyber security is a growing concern across the government.

The Pentagon this week swore in Army General Keith Alexander as the first commander of U.S. Cyber Command, which was created to better defend the Pentagon's 15,000 computer networks at 4,000 military bases in 88 countries.

BAE hopes to help the military and other government agencies defend and avert attacks from a wide and growing range of enemies, including extremist groups, organized crime, other countries or even individual hackers.

The private sector is also potentially fertile ground. Concerns about cyber attacks escalated in March when Google Inc shut its mainland Chinese-language portal, after suffering a sophisticated cyber attack that it said came from within China.

GLOBAL REACH

BAE, which gained important offensive and defense cyber operations when it bought AlphaTech Inc in 2004, has a core team of over 100 specialists who work closely with 1,000 intelligence analysts across the company. They work in what BAE calls its "home markets" in Britain, the United States, India, South Africa, Sweden, Saudi Arabia and Australia.

Leigh Palmer, program director for the new center, said BAE's global reach, emphasis on strategic perspectives and ability to use actual operational data set it apart from more research-oriented cyber centers set up by other companies.

BAE's big presence overseas gave the company's cyber center access to tools from overseas and a huge operational network linking its 109,000 employees worldwide, she said.

She said BAE's customers were increasingly looking for security products tailored to address the highest-risk areas. "Cybersecurity is expensive. You can't harden everything," she said, adding that BAE was offering more "risk-based security."

The Obama administration and lawmakers are considering regulations that that would mandate cyber security safeguards for companies doing business with the Pentagon -- an initiative that could spark new business opportunities for BAE Systems.

Perry Luzwick, head of cyber warfare and cybersecurity for BAE, said BAE could help smaller companies meet those standards without having to set up their own specialized teams.

He said BAE was also bidding to be one of several suppliers for the Navy's next-generation on-shore information technology system, a multibillion contract due later this year, as well as various cyber contracts with the Air Force, the Department of Homeland Security and several intelligence agencies.

BAE is also exploring partnerships with companies outside the defense sector, and could announce a teaming agreement later this year, Luzwick said.

(Reporting by Andrea Shalal-Esa; Editing by Tim Dobbyn)