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[ISN] Defense Firms Pursue Cyber-Security Work


The Wall Street Journal
MARCH 18, 2009

WASHINGTON -- The biggest U.S. military contractors are counting on 
winning billions of dollars in work to protect the federal government 
against electronic attacks.

U.S. agencies from the Pentagon to the Department of Homeland Security 
have experienced major cyber-break-ins in recent years, even into 
classified systems. Cyberspies also have siphoned off critical data from 
Pentagon contractors, including one breach that cost a major aerospace 
contractor $15 million.

Intelligence officials estimate annual U.S. losses from cyber breaches 
to be in the billions of dollars, and some worry that cyber attackers 
could take control of a nuclear power plant or subway line via the 
Internet -- or wipe out the data of a major financial institution.

Anticipating the demand, defense companies are bolstering training, 
buying smaller firms and hiring former top government officials. The 
move into the cyber-security field could offer new revenue streams for 
the contractors and help offset declines stemming from budget pressures 
on the Defense Department's traditional weapons systems.

Last year the Bush administration launched a major cyber-security 
initiative, and 2009 spending is expected to reach $6 billion. Details 
are classified, but depending on the outcome of a 60-day White House 
review due next month, people familiar with the effort say spending 
could range from $15 billion to $30 billion in the next five years.


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