Accelerating Innovation Through Cyber Pilots Fifth Annual IT Security and Entrepreneur’s Forum March 15, 2011

Public-Private Gaps in Cycle Time and Investment 2 IR&D as percent of Revenue IT Product Cycle (months) $32B: Commercial Software/Internet R&D 1 $22B: Aerospace and Defense R&D 1 Investment and Cycle Time  Commercial IT R&D exceeds all aerospace and defense R&D  Commercial IT cycle averages 24 months 2  Defense IT cycle averages 81 months 2 Sources: 1 Booz and Company, 2 DepSecDef Lynn, 3 PricewaterhouseCoopers, 4 National Science and Technology Council Access to Innovation Private investment in new technologies, business models, and markets is 10x Unclass USG R&D $5.6B: Later-Stage Investment 3 $1.7B: 515 New Startups 3 2Q08-1Q10 Private Investment in Internet = $7.3B FY10-FY11 USG Unclassified Cyber R&D = $721M 4

Proprietary At RSA, DepSecDef Lynn Highlighted Need for Public-Private Partnerships 3 “…the government cannot protect our nation alone. Cyber defense is not a military mission, like defending our airspace, where the sole responsibility lies with the military. The overwhelming percentage of our nation’s critical infrastructure—including the internet itself—is largely in private hands. It is going to take a public-private partnership to secure our networks.” “To help spur this effort, the Department of Defense will add half a billion dollars in new research funds for cyber technologies, with a focus on areas like cloud computing, virtualization, and encrypted processing. Through our “Cyber Accelerator” pilot, we are also providing seed capital for companies to develop dual-use technologies that serve our cyber security needs.”

Proprietary What is Cyber Accelerator Concept? 4 Investor –Source emerging commercial technologies; Incubator –Accelerate product roadmaps through strategic investments; Integrator –Combine technologies through channel partnerships to produce commercial capabilities that can satisfy DoD needs Benefits –Leverage market-based incentives –Produce capabilities under commercial business models –Protect private intellectual property First demonstration: end-to-end identity/trust in the cloud

Current Status and Next Steps Current Status First cyber pilots funded through FY10 supplemental Six-month accelerator pilot ends in March –Provides project roadmap for cloud security, mobility, trusted identities, analytics, infrastructure Ongoing “trust-in-the-cloud” demo runs through Aug Other pilots ending this Spring/Summer Next Steps Evaluate overall utility of pilots Share results across DOD and with Congress Determine how best to move forward –DOD Cyber Strategy –Governance –Funding 5

For More Information… Dr. Irv Lachow 6