Homeland Security: A Ready-made Market

The Department for Homeland Security has a budget of $38 billion, and companies are lining up to help the government spend it. What are the needs of this market and who is best positioned to serve it? Harvard Business School professor Scott Snook lead this discussion with industry players.
by Julia Hanna

September 11 and the establishment of a Department for Homeland Security (along with a budget of nearly $38 billion for FY 2003) have created immediate opportunities and challenges for the industry, according to HBS associate professor Scott Snook.

Given the realities of this new world, Snook asked panelists at Harvard Business School's Cyberposium 2003 to address the technology trends, developing markets, and pressing concerns of a swiftly developing market.

At this point, panelists agreed little new innovation is necessary. "We don't need new technology; we need to deploy what we have," said Mark Cleverley, a senior solutions executive at IBM.

"The CIA can talk to the INS," agreed Mark Hogan, vice president and general manager at BEA Government Systems, "but there are policy issues that affect the speed of adopting new systems." The workings of the government are mysterious, he added—the making of laws and sausages are two activities better left behind closed doors.

The CIA can talk to the INS, but there are policy issues that affect the speed of adopting new systems.
— Mark Hogan,
BEA Government Systems

The market for homeland security is difficult to define, said Murray Mazer, cofounder and vice president of Lumigent Technologies. "It's about providing IT solutions to a complex, evolving environment," he said, noting that the key technology issues to consider include information sharing across government agencies, protecting data, and reducing complexity.

"We're talking about gathering information about people," Mazer continued, "which raises a whole new host of issues regarding privacy guidelines and accountability."

"After 9-11, there was talk of a national ID card," noted Cleverley. "From a technology standpoint, that's a no-brainer. The question is, do we want or need an ID card? We need to get our act together first on policy and cultural issues."

"I'm interested in creating interoperability between agencies," continued Cleverley. "It's obvious why the dots weren't connected before 9-11; there was no mechanism to do so." Creating change in the government sector, however, requires grappling with a deeply entrenched culture. "Democracy is the worst form of government, apart from all the others," he quipped. "It proceeds slowly, by consensus. There's an enormous chokepoint when it comes to getting the job done."

It's about providing IT solutions to a complex, evolving environment.
— Murray Mazer,
Lumigent Technologies

Even so, the federal government offers enormous growth potential, said Hogan—and it provides a solid source of revenue for companies with an established foothold in the sector.

"This is not a short-term game," agreed Cleverley. "It's a long-term situation that is still unfolding and will become clearer with time."

The Homeland Security panel discussion was held during the Cyberposium 2003 conference on January 18.

About the Author

Julia Hanna is Associate Editor of the HBS Alumni Bulletin.