Ian Reid

Managing Director, Space Division, Qinetiq Group Plc

The space division of Qinetiq Group of Britain cannot be accused of placing its chips on a single technology or market sector. The company has products that help satellite operators pinpoint the source of ground-based jamming — intentional or otherwise; ion-electric propulsion systems for satellite onboard propulsion; a demonstrated capability in small and autonomous satellite systems; and technologies to determine space weather and the radiation exposure of satellites.

As if that were not enough, Qinetiq also has developed a database on satellite in-orbit performance that is being used in the satellite-insurance business.

Division Managing Director Ian Reid says the common thread binding all these initiatives is the need to guide them from research-and-development status into profit centers with recurring revenue.

Qinetiq also might be considered an indicator of whether cross- border mergers of European space hardware manufacturers can be made to work despite the geographic-return rules that largely require that work to be conducted in the nation that funds a project. Rules that make it tough to eliminate duplication and streamline a multinational enterprise.

Reid spoke with Space News staff writer Peter B. de Selding about Qinetiq’s strategy.

Qinetiq said after its purchase of Verhaert Space of Belgium in late 2005 that it would be hunting for new acquisition targets in Europe. Is that still the case?

That remains the objective and it is a key part of my role here. Where we can accelerate the growth of Qinetiq’s core technologies with acquisitions, we intend to do so.

Is the Verhaert acquisition taking longer than expected to digest because of the geographic-return rules that regulate government space spending in Europe?

We are well along the way to integrating the business, but it is true that some aspects, including geographic return, require that we be prudent in dealing with operations duplication, for example. It requires a lot more thought than might be the case otherwise. So our initial focus has been on sales and marketing integration. Overall, the performance of Verhaert since our acquisition has been very acceptable. It has proven to be a good strategic fit for us.

So the Verhaert purchase has not soured you
on further European space-sector deals?

Not at all. It has confirmed what we thought before we undertook it.

Qinetiq recently announced that it is purchasing Analex of the United States, whose business includes ground systems and technical support for NASA at the Kennedy Space Center and Cape Canaveral. How does that fit in to your space division strategy?

I can’t say too much about this until the sale closes. But Analex will be run from our North America division, which is separate from the space division, and we have proxy structures to put into place [as a non-U.S. company]. Analex has some space activities in the United States but it was not the space business that drove the acquisition, it was more related to defense.

Qinetiq’s space division has a wide range of expertise for a company of its size. What is the organizing principle?

Our strength is in taking technologies and finding applications for them in downstream markets — something that we have been successful at doing. Right now you can see us as focusing on four areas: electric propulsion for satellites; radiation monitoring in orbit and related technologies on satellite health; and our jewel in the crown, which is developing, managing and operating genuinely low-cost satellites, which is what we have done with Topsat, for the U.K. Ministry of Defence.

You oversaw the Topsat project and used a platform provided by Surrey Satellite Technology Ltd. As you look toward possible export sales, will you be proposing a Surrey platform?

Our Verhaert purchase gave us access to Verhaert’s Proba 2 and, soon, Proba 3 small-satellite design work, whose specialty is in-orbit autonomy for small satellites. We think this technology has applications in areas such as formation flying for science missions, and in what is referred to in the United States as operationally responsive space. We expect to deliver the Proba-2 technology satellite this year.

As we look to exploit our expertise in small, autonomous satellites, we don’t rule out any platform — Surrey, Verhaert or a U.S. platform supplier if the customer was in the United States.

Topsat, carrying a 2.5-meter-resolution optical imagery, was launched in October 2005. What is its status?

The satellite already has exceeded its scheduled design life and we continue to operate it, doing trials for the Ministry of Defence on areas that include increasing the speed of tasking the satellite. There are also some outside potential users who have asked to be able to task the satellite to test it. This expertise is one of the technologies we will try to bring to the United States as it looks to operationally responsive space requirements.

Qinetiq has maintained an expertise in ion-electric satellite propulsion and has won contracts with the European Space Agency. A similar expertise exists in France, and in Germany. Given the size of the European market, is three suppliers at least one too many?

Consolidation is inevitable. We believe we are very well-positioned, especially given that we have an end-to-end capability to design, develop and test these systems in-house. Some of our competitors developing similar technologies actually use us to test their systems.

What does Qinetiq expect of its association with the British insurance company, Sciemus, which is licensing your Space Risk Assessment Tool, or SpaceRAT, and has signed satellite-fleet operator Inmarsat as a customer?

This is an example of what we are trying to do in taking in-house technologies and developing downstream applications.

Building on our expertise in radiation monitoring for satellite programs, we developed a tremendous amount of historical data on launchers, satellites and satellite onboard systems. We now own 10 percent of Sciemus and they have licensed SpaceRAT to provide insurance coverage.