Presentation to the Cyber Security Finance ForumDavid A. Fastabend, VP & GM: Advanced Information Systems

16 Oct 12 2012

• Who is ITT Exelis?

• What is Cyber?

• Where is this market headed?

• Do we have cyber completely wrong?

• Why is this so hard?

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Agenda

Who is ITT Exelis?

Component producer for the transportation, marine,

industrial and aerospace markets

World’s largest supplier of pumps and systems to

transport and control water and other fluids

Providing Customers With:

The ability to sense and deny threats to manned and unmanned aircraft, ships, ground vehicles and personnel and to provide Warfighters with uninterrupted networked tactical communications

Providing Customers With:

Next-generation imaging that integrates space, airborne, ground and soldier sensors into broader, coordinated systems.

Providing Customers With:

Data fusion, network integration and critical decision support services.

Component producer for the transportation, marine,

industrial and aerospace markets

Mission Systems

Providing Customers With:

A broad range of critical service, support and logistics solutions that enable efficient operations in the most demanding environments.

We will be the most agile C4ISR, aerospace, and information solutions provider by leveraging deep customer knowledge and technology expertise to deliver affordable, mission-critical products and services for our global customers

> Global-base operations and infrastructure support

> Battlefield network communications & information support

> Worldwide logistics & deployment support

> Ground vehicle & equipment maintenance

Information & Technical Services (I&TS) C4ISR Electronics & Systems

Electronic Systems

> Electronic warfare

> Unmanned ISR

> Force protection

> Networked communications

> Radar

> Composite structures

> Reconnaissance & surveillance

> Acoustic systems

Geospatial Systems

> Airborne situational awareness

> Information exploitation

> Space-based satellite imaging

> Weather & climate monitoring

> GPS

> Night vision

> Power solutions

Information Systems

> Information-enabled mission solutions

> High-end engineering services

> Air traffic management systems

> Commercial aviation solutions

> Satellite ground systems

> Spectrum management

> Space, ground and range operations, sustainment, upgrade & modernization

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INFO-ENABLEDMISSION SUPPORT

CYBER-ENABLEDMISSION SUPPORT

CYBER OPNs

What is Cyber?

ITHW & SW

& SERVICES

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Customers buy in “slices” vice“rings”

IT Core is commoditized & consolidated

Niche positions in IT / Core Cyber possible but … Small Businesses are

advantaged

Mission presence leads to cyber opportunity … reverse not necessarily

true

Advantages in this market are inherently

fragile

Where is this market headed?

Budget imperatives are driving network and data center consolidation breaking traditional stovepipes.

• HW & IT services are commoditized, standardized; IT -10%• Consolidation enables integrated security and operations

management • Open Standards seen as key to avoid vendor lock-in• Opportunities in enterprise-capable solutions

Cloud capabilities enable a virtualized, “x as a service,”

infrastructure in both public and private domains.

• Infrastructure IT services like web and email will move toward public cloud providers

• Development of identity , information and security standards are key enablers

• Opportunities in cloud infrastructure, cloud security and cloud-enabled solutions

Digital Natives are driving expectations of anytime,

anywhere data and applications

• End users want “Bring your own device” • Drives platform agnostic thin-client (cloud) solutions• Challenges in identity management and security• Opportunities in location-enabled mission solutions,

mobile-as-a-sensor

The combination of a “Data Tsunami” and cloud-based analytics enable mission

understanding

• It isn’t just the data, it’s the metadata (the Semantic Web) • Data sharing and data tagging are key enablers particularly

for sensitive data• Cyber is a pressing use-case • Opportunities in integrating big data capabilities across

mission space; providing life-cycle data services

Publicized advanced persistent threats, losses in intellectual

property raising awareness of vulnerability.

• Concern moving beyond DoD and critical infrastructure to US industry as a whole; legislation more likely

• “It isn’t if you’re attacked, it is how you respond”• Opportunities in line-speed capable systems and analytics,

security-as-a-service, trusted identity, supply chain

Network Consolidation (IT

Efficiency)

Network Cloud

Mobile Cyber

Big Data Analytics

Nation State Cyber Threats

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MechanicalChanneled

“Information Diffusion in Online Social Networks”

BiologicalDiffusive

Do we have the cyber metaphor completely wrong?

Metaphor: Mechanical vs Biological?

Mechanical BiologicalTRANSPORT:

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MechanicalPositional

BiologicalSurface Matching

Combinatorial docking approach for structure prediction of large

proteins and multi-molecular assemblies

CyberSurface Vulnerability

Do we have the cyber metaphor completely wrong?

Metaphor: Mechanical vs Biological?

Mechanical BiologicalTRANSPORT: Channeled DiffusiveASSEMBLY:

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MechanicalGeometric

BiologicalTopological

CyberNetwork

Do we have the cyber metaphor completely wrong?

Metaphor: Mechanical vs Biological?

Mechanical BiologicalTRANSPORT: Channeled DiffusiveASSEMBLY: Positional Surface MatchingSTRUCTURE:

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Metaphor: Mechanical vs Biological?

Mechanical BiologicalTRANSPORT: Channeled DiffusiveASSEMBLY: Positional Surface MatchingSTRUCTURE: Geometrical Topological

Do we have the cyber metaphor completely wrong?

… and the Metaphor is: Biological• Biology is NOT our “master metaphor”• Effective biological systems use defenses in depth• Machines don’t adapt … but biological systems must• Effective biological defenses are autonomous vice

controlled• Our biological experiences give us the best hints for

the future of cyber

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Why is this so hard?

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“ … the internet may be the most disruptive innovation since discovery of the Western Hemisphere”“ … this was basically an experiment … of which we lost control.”

Every time we have a choice between security vs access and communication … we generally don’t go for securityWe have not yet worked out the “Big Ideas”

So far … the offense is decisively advantaged

Questions?

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• What more can you tell me about ITT Exelis?

• Do you have additional examples of the biological metaphor?

• What are your views on M&A in this market?

• What are your views on the legislation options in front of the Nation?

• What are the key cyber capabilities that ITT Exelis brings to this market?

ITT Exelis Overview

>Top-tier global defense, aerospace and information solutions company

>Large installed base of products>Premier technologies in Space

solutions, Sensors, Networked Communications, Electronic Warfare, Aerostructures, & ISR PED processing

>Recognized global leader in Air Traffic Management (ATM)

>Expertise and technical support with systems engineering for multiple programs of record

>~30% revenue from outside U.S. Department of Defense

StrengthRevenue ($B)

Portfolio Diversification

Information & TechnicalServices

52%

C4ISRElectronics &

Systems48%

2007 2008 2009 2010 2011

$4.2$6.1 $6.1 $5.9 $5.8

U.S. Presence

Exelis Global Reach

Exelis Inc. International Offices IMR/IMC LocationsExelis HQ

International presence in more than 60 countriesFive International offices with 90+ Marketing Reps & Consultants

Investment Aligned with Enduring Needs

Space Sensors & ISR

Information & CyberAir Traffic Solutions Aerostructures

Electronic Warfare Networked Communications

Core Positions: Extend Leadership

Focused Growth: Invest in Capabilities & Scale

Create value through complementary C4ISR capabilities and positions

Providing Solutions to Needs

ITT Exelis products & services align with current priorities of the U.S. military & allies for information-based, networked solutions

Defense Priorities1 ITT Exelis Products and Services

• Troop level adjustments• Force modernization• Security of allied nations

• Battlefield radios• Night vision technologies• Counter improvised explosive

device technology• Countermeasures

• Cyber-warfare• Space

• Intelligence systems• Information warfare• Satellite payloads

• Global reach in the air• Power projection at sea

• Airborne and marine countermeasures• Unmanned surface vehicles• Coastal radar/sonar

• Competitive outsourcing• Base maintenance and mission control• Information integration and operations• Advanced research

(1) As derived from the 2012 Strategic Guidance, “Sustaining U.S. Global Leadership: Priorities for 21 st Century Defense” and “Defense Budget Priorities and Choices” both dated January 2012

Solutions Aligned with DoD Priorities

Needs

Electronic Warfare / Electronic Protection

Autonomy

Data to Decisions

Cyber Science & Technology

Protection of systems and extension of capabilities across the electromagnetic spectrum

Autonomous completion of complex tasks in a reliable and safe manner

Faster and more efficient analysis and use of large data sets

Efficient and effective cyber capabilities across the joint operations spectrum

Priorities1

Exelis Solutions

We enable smarter, faster decisions and efficient, targeted solutions

>PED (EA2, EchoStorm, JagWire, FELCO)

>Gorgon Stare; Vigilant Stare>Large-Data-WAN

>Next Gen EW Jammer>Advanced EW Defensive

Systems>RF Countermeasures

>Multi-level Secure Cloud>Cyber Mission Assurance>Communications and

network solutions

>Sense & Avoid Radar>Tagging, Tracking &

Location

(1) As stated by Secretary of Defense; 4/19/2011 memorandum; Science and Technology Priorities for Fiscal Years 2013-17 Planning

Information & Cyber Solutions And Intelligence Solutions Resources

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Over 625 Cleared Personnel

Over 325 with TS/SCI

30% MS or higher

Intel, Engineering, and Cyber Background

Operational Experience

Named as Top 10 military-friendly employer by G.I. Jobs magazine

Customer Experienced Security Team

Offices located at 15 sites throughout US

Includes, 3 offices near Ft. Meade plus Omaha NB, and Panama City Beach , FL

Secure Areas in most facilities

Secure Communications

Full Suite of HW, SW, RF Tools

Anechoic Chambers

Satellite Communications Test

RF Shielded Enclosures

Satellite Ground Systems

Clean Rooms

Classified PC Manufacturing

Hybrid Manufacturing

Personnel Facilities Capital Reachback

Exelis Organization

Substantial subcontractor access

Development Partnerships

Consultants

Government

Defensive Cyber Footprint

Information Support Server Environment ($107M – 10 year): Develop, deploy and maintain cross domain product that secures information exchange between unclassified and classified networks. End-to-end services including administrator training

for 120 installs worldwide

Joint Network Attack Course and USCYBERCOM Ops Center Support

Technology transition services to Air Force Research Laboratory

DCO, ACE Cyber Bootcamp, 24 AF Aligning ITT Exelis Training to NIST Guidelines Operate ITT Exelis Security Operations Center

Real world events in training curriculum Member of the Defense Industrial Base

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Offensive Cyber Footprint

Information Operations - CNO > CNE/CNA solutions, CONOPS development and

training support> Development and deployment of secure network

solutions

> Reverse engineering and embedded hardware capability

Remote monitoring and command & control (C2) over wired and wireless networks

Embedded Software and Firmware Systems Design

> Custom hardware and software applications

Special purpose data communication systems> Custom as well as COTS-based solutions

ISP 1

Border Firewall(s)

IDS

Email

Proxy

DMZ

Ext

DNS

Web

Proxy

Authenticated

Email Server

File/Print/

Terminal S

rvCollaboration Srv

(Web, S

harepoint)

Internal Svrs

(Act Dir,

DNS,

DHCP,WINS,

Authentication)

CPE

ISP 2(802.16)

WLAN(802.11)

Server Farm

PBX

(POTS/IP)

Modem

Pool

Department

Server/Storage

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Information & Cyber Solutions Focus Areas and Credentials

Enterprise Protection Planning

IT Security Operations and CERT

Cross Domain Services

Technology Innovation, Evaluation, Transition & Lodgment

Premier Education &

Training Services

Achieving Optimum Security Posture Against Adversarial Attack

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