Lucent Technologies – Proprietary Use pursuant to company instruction What Keeps Me Awake Lucent Technologies – Proprietary Use pursuant to company instruction

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 Use pursuant to company instruction

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 Lucent Technologies – Proprietary Use pursuant to company instruction

Lucent Technologies – Proprietary Use pursuant to company instruction 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 Use pursuant to company instruction

Lucent Technologies – Proprietary Use pursuant to company instruction 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 Use pursuant to company instruction

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) Lucent Technologies – Proprietary Use pursuant to company instruction

Lucent Technologies – Proprietary Use pursuant to company instruction Industry Concerns (3) Large Company Process driven to response in standard solutions Margin driven Fundamentally different acquisition methods Lucent Technologies – Proprietary Use pursuant to company instruction

Lucent Technologies – Proprietary Use pursuant to company instruction Industry Concerns (4) Commercial Market focussed company Significant margins Little time to divert resources Open standards Procurement methods Lucent Technologies – Proprietary Use pursuant to company instruction

Lucent Technologies – Proprietary Use pursuant to company instruction 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!” Lucent Technologies – Proprietary Use pursuant to company instruction

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. Lucent Technologies – Proprietary Use pursuant to company instruction

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 Lucent Technologies – Proprietary Use pursuant to company instruction

Lucent Technologies – Proprietary Use pursuant to company instruction Prologue If 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 luck Now 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 Dream Act V, Scene II W. Shakespeare Lucent Technologies – Proprietary Use pursuant to company instruction