Information technology and services giant Logica is a multibillion-dollar company employing some 40,000 people internationally. Unlike many information technology companies that have sought profit in space, Logica still has a space division and it appears to be doing well.
Space Division Director Stuart Martin expects the division to be growing revenue by around 10 percent annually in the coming years as several new European programs enter operations.
Foremost among these are the Galileo timing and navigation project, where Logica is competing for two of six main contracts and is already working on a preliminary Galileo phase; and Europe’s Global Monitoring for Environment and Security (GMES), a broad Earth observation program. Both are managed by the 27-nation European Union’s executive commission.
As is the case with numerous companies in Europe, Logica has divisions in multiple European nations and is able to describe itself, for European government contract work, as a local business in Germany and the Netherlands, among other nations.
Logica is also taking a central role in what the British government says is a key review of the way it approaches the space sector, which is increasingly seen as a vector for growth — something governments everywhere are eager to stimulate. Martin spoke with Space News staff writer Peter B. de Selding
How big is Logica’s space division and is it growing?
We are about 350 people based in the United Kingdom, Germany and the Netherlands. In 2008 the space division revenue was about 40 million euros ($56.4 million at the time). We are certainly growing at this point, quite strongly, with a lot of projects in our pipeline. The space industry’s public-sector markets are holding up, and for many of these projects funding is committed over several years.
What are your biggest contracts now under way?
We have two programs that are far larger than the others. The first is the Skynet 5 British military satellite telecommunications project, which generates about 30 percent of our revenue. We delivered and support the service management system that prime contractor Paradigm Secure Communications uses to deliver the Skynet service. The contract runs through 2018.
Another 30 percent to 40 percent of our revenue is from the Galileo In-Orbit Validation program, where we are delivering five major components to the Galileo ground system in the areas of encryption key management, satellite control and signal integrity mission management. It’s a big contract for us.
The rest of our revenue is from a wide variety of contracts in such areas as Earth observation, satellite telecommunications and satellite control. We perform ground control work for the European Space Agency’s Esoc space operations center in Darmstadt, Germany, where we have about 50 people working, and we do ground-facilities work for commercial satellite fleet operators Inmarsat of London and Eutelsat of Paris. For Eutelsat, we are performing work that should permit them to reduce their operating costs.
Where are the biggest likely sources of near-term growth for you?
Galileo is certainly the biggest, and the GMES program is another big focus for us. We also think there are opportunities in getting the utilities and financial sectors to take better advantage of satellite telecommunications. They are just waking up to the possibilities. Also, the fact that GMES will offer long-term Earth observation data continuity will offer opportunities worth investigating.
What growth rates can you maintain?
For the near term, we think we’re pushing double-digit annual growth in revenue. The market may not be growing that fast, but we think we will be growing our market share.
Does a big information technology company like Logica view a space division as core to its business?
I believe we are indeed the only major IT services business in Europe that does have a space division. Our parent company has always been very supportive of us. During the telecom boom, we were seen largely as part of the telecom industry. We kept that bedrock business going, and it has grown. Space is seen as an opportunity for growth by governments looking for high-technology areas that can stimulate the broader economy.
You are bidding to be prime contractor for two Galileo work segments: Your Dutch division is competing with ThalesAlenia Space Italy for the System Support contract, and your British division is up against ThalesAlenia Space France for the Ground Mission System contract. What is the status and the contract value?
Galileo is a complex program and its many delays are a matter of public record. It’s not certain that the prime contracts for all six Galileo work packages will be signed this year. As far as the two contracts for which we are bidding, the System Support contract is valued at about 100 million euros to 2013 and we think there is a good chance a winner will be announced this year.
The second contract, Ground Mission Support, is valued at 300 million to 350 million euros, also to 2013, and this may slip into 2010.
The program really needs to get the System Support contract signed, so that the prime contractor is then available to help with the other work.
British Science Minister Lord Drayson in June kicked off a six-month study to evaluate how to stimulate space sector growth and created an Innovation Growth Team for Space, or Space IGT, to do the work. Logica Chief Executive Andy Green is heading the group. Is it realistic to expect concrete proposals?
Our chairman is on record saying he doesn’t want this to be just another addition to the library of space policy studies. We at Logica are contributing five of our people full-time to this, plus several others part-time, as part of a team of about 80 people working on it. Because of the way this was created, the government is compelled to react to it, to respond to it one way or another.
Across the spectrum of government agencies people are realizing the impact of space technology on our critical national infrastructure. They are looking at new ways to preserve and protect national assets. There is also a realization that the space technology industry in the U.K. has been performing rather well despite the broader economic troubles.
What areas are you looking at in this six-month evaluation?
We’re looking at the regulatory environment; at the industrial landscape and how industry is organized; how government spends its money — it’s a broad look.
There has been a lot of debate on whether the British National Space Centre, which is funded by multiple different agencies with very different mandates, should be abolished in favor of a British space agency with its own budget. Your view?
There are two schools of thought here. Some think having small pots of money available in different places is sometimes quite helpful. Others say the current organization is unable to look at a given space investment and judge the totality of its value. The example of a large GMES contract that Britain missed a couple of years ago is well-known.
The main goal is to get the balance right between technology push and market pull. Early stage projects cannot depend on market pull. As a service or a technology matures, it should be able to find financial support from the communities it is designed to serve. We tend to swing from one extreme to another, and the Space IGT study will address this. I think the best way of achieving the necessary balance is through a centrally funded agency which has control over policy, implementation and budgets.
The preliminary report is expected before Christmas, with a final report 2 to 3 months later.