Raytheon pushing for more IT security deals

By Andrea Shalal-Esa

WASHINGTON (Reuters) - Raytheon Co (RTN.N) announced on Tuesday a drive to expand its already substantial work securing government computer networks and to respond to growing commercial demand for cybersecurity services.

"There's some very large dollars at stake here," Raytheon's Steve Hawkins, head of the new venture that will be part of its intelligence and information systems division, told Reuters in an interview.

The Bush administration recently requested a 73 percent increase in cybersecurity funding for fiscal 2009 to $7.3 billion, and Hawkins said Raytheon could eventually bid for about 40 percent of that amount. Fiscal 2009 begins on October 1.

In addition, Raytheon is keen to capture a stake of the growing commercial market. Analysts estimate that big U.S. companies are likely to spend over $1 billion to add more protection against network attacks as well as the misuse and theft of insider information.

Raytheon already sells cybersecurity services to the federal government, but this will be its first serious foray into the commercial sector, driven in part by its acquisition last fall of Oakley Systems.

"We can bring our knowledge of the threat from the defense and intelligence side ... and bring that knowledge and the technology to the commercial side," Hawkins said. Raytheon is also keeping its eyes open for more acquisitions to respond to the needs of a variety of new market niches.

Raytheon already provided information security for one of the nation's big intelligence agencies, but Hawkins declined to name the agency, as much of that work is classified.

Hawkins gave no details on Raytheon revenues from the area of cybersecurity.

The Waltham, Massachusetts-based company has 530 information security engineers, about 10 percent of all those certified by the federal government. "We're a significant player," Hawkins said.

Derek Smith, president of Raytheon Oakley Systems, said Raytheon was "uniquely positioned" to protect commercial information networks given its decades of experience in the government sector.

Raytheon Intelligence and Information Systems is a leading provider of information and intelligence solutions to the government, while the overall company has annual sales of $21.3 billion.

Corporations throughout the world are paying more attention to security, in particular to the protection of communications network and data as criminal rings develop sophisticated software tools for hacking into computer systems.

(Reporting by Andrea Shalal-Esa; editing by Gunna Dickson )