For the first time in company history, Viasat’s Government Systems business moved past the $1 billion annual revenue mark. It’s a milestone that all of us are proud of, and it speaks volumes to the kind of innovative work our team is doing every day to bring game-changing technology capabilities to today’s warfighters.
Our progression to this point has been a natural one, with an accelerated trajectory in the past seven to 10 years. Viasat started out in 1986 delivering products and services to the U.S. Department of Defense (DoD), and as a Small Business Innovation Research (SBIR) awardee, you could say we built the company from the ground up by doing things a bit differently. SBIR allows participants to preserve the intellectual property rights developed as part of these contracts, and Viasat took full advantage of that.
Moving from a provider of increasingly sophisticated communications terminals to networks, data links, cybersecurity and eventually building and launching our own satellites, Viasat came to know our DoD customers very well. And at the same time, the DoD has moved from being the prime inventor of new technology to now increasingly becoming an early adopter of new defense capabilities.
Part of the reason behind this transition has to do with the private sector now leading in mobile networking, assured connectivity and cybersecurity market segments. Today, the pace of innovation in the private sector is simply moving too quickly for the U.S. government to keep up with. In addition, a slow moving acquisition process is causing members of the U.S. DoD to become frustrated with the outdated technology capabilities available for today’s warfighters.
For those in the defense industry, this represents a real challenge, but Viasat saw it as an opportunity. Rather than hinge our success on an acquisition model that is falling behind, we made bold moves to find innovative ways to operate outside of traditional programs of record to quickly and affordably deliver new capabilities to warfighters today — when they’re needed most.
A good example can be seen in our proven track record of bringing first-to-market products forward in the information assurance and network encryption market. Viasat was the first to offer a 100-gigabit-per-second (Gbps) Type 1 network encryption device, known to the U.S. Government as the KG-142. We did this by moving aggressively, in advance of the DoD validating formal requirements for this kind of capability.
Today, we are the only U.S. company that supports NSA Type 1 encryption for both Layer 2 Ethernet Data Encryption  and Layer 3 High Assurance Internet Protocol Encryptor. This has accelerated our growth and dramatically increased our market share in the DoD information assurance market sector that is so vitally important to the security of our customers in uniform.
There are many great examples of Viasat’s success using this agile business model, and the selection of Viasat’s Small Tactical Terminal (STT) for the upgraded Apache helicopter is another one that stands out. We saw a slow-moving acquisition process that would’ve caused the U.S. Army to wait nearly a decade until it fielded the requested Apache technology upgrade it needed to maintain a tactical edge on the battlefield.
Seeing this need, Viasat immediately stepped in to develop a product that delivered connectivity capabilities that went above and beyond the Apache helicopters’ need for an advanced, secure, high-speed communications system. And we developed it for the U.S. Army on time and under budget.
When the U.S. Army acquisition lead reviewed the capabilities of our STT, she stopped the acquisition process and announced Viasat would be delivering STTs to meet the new communications needs of the Apache helicopter. She also calculated the U.S. government would save nearly $250 million by not going through the traditional acquisition process.
Ultimately, the STT was selected by the Army based on its capability, product maturity, reliability and flexibility — plus its ability to provide real-time combat communications and interoperability to mission-specific networks. Based on our extensive customer collaboration and a deep understanding of customer needs, we were able to develop an effective product that allows Apache operators — for the very first time — to fuse the operational picture with fast-moving jets and ground forces simultaneously.
More than anything, our Government Systems business is committed to being one of the DoD’s most trusted partners. We don’t see Viasat as just a provider of new defense capabilities, but as a national asset: a partner that understands the real needs of today’s warfighters and acts quickly to effectively and affordably deliver capabilities that push the boundaries of what’s possible in order to significantly enhance mission effectiveness and improve warfighter safety.
While Viasat jumps up industry lists as one of the top defense companies in the world, and our Government Systems business continues to deliver robust financial results, there is no greater reward than knowing we’re helping our young men and women in uniform stay safe and succeed across the battlespace.
We understand very well that today, the U.S. military is populated by young men and women who have grown up in a connected world and voluntarily choose to protect our nation. Viasat believes we increasingly have an obligation to provide them with the same technology they have grown accustomed to depending on in the civilian world.
As we celebrate our $1 billion milestone, we have our sights set on the future. We are fortunate to have a company filled with veterans, leading technologists and passionate employees who are committed to finding a better way for today’s men and women in uniform. We’re looking forward to making what’s next.
 Pending certification from the National Security Agency