Technology companies see ‘monster opportunity’ in federal shift to Apple, Google phones

November 20, 2011

Citrix Systems and Juniper Networks are among the technology vendors that could benefit from a U.S. government search for ways to secure Apple’s smartphones and tablet computers for the use of federal employees.

Apple’s devices, along with those using Google’s Android software, are drawing interest from U.S. agencies responding to a workforce that increasingly wants an alternative to the Research in Motion BlackBerrys that have long dominated the federal market.

A shift away from RIM could require companies such as Fort Lauderdale, Fla.-based Citrix and Juniper to furnish software and security to support wireless de­vices purchased from other manufacturers.

“It’s got to be a monster opportunity for infrastructure and security vendors,’’ said Daniel Ives, a senior vice president and analyst at FBR Capital Markets in New York.

Systems integrators that work with those vendors, such as Computer Sciences Corp., SAIC and Unisys, may also gain, said Tad Anderson, executive vice president of LRW Technologies, a Baltimore-based mobile-security provider.

Several federal agencies are exploring the use of Android-powered phones, and iPhones and ­iPads made by Cupertino, Calif.-based Apple. The Department of Veterans Affairs issued a query last month for a vendor that could control access and secure data for as many as 100,000 mobile-device users.

Seeking mobile security

An increased reliance on mobile devices may expose government and corporate networks to attacks by hackers, according to a report on economic espionage released Nov. 3 by the U.S. Office of the National Counterintelligence Executive.

Security has been a major selling point of RIM’s products, which operate on encrypted servers, unlike devices produced by Apple or other manufacturers.

“The RIM side has a lot of the security controls already built in,’’ which allows agencies to control the device and access to data, Nick Percoco, senior vice president of Trustwave, an Annapolis-based provider of information security, said in an interview.

Android and Apple products would require custom applications to make them secure enough to handle sensitive government data, Percoco said. Trudy Muller, an Apple spokeswoman, declined to comment.

RIM has been the government’s main smartphone provider since 2001, with at least $395 million in sales over the last decade, including $84 million so far in 2011, based on contracting data compiled by Bloomberg Government. The figures may understate RIM’s actual government revenue, because some sales may not be reflected in contracts with third parties.

President Obama signed a law late last year that directed agencies to develop policies on purchasing mobile devices to encourage telecommuting.

Citrix is the most likely to benefit from any increased government use of mobile devices from other manufacturers, said Steve Ashley, an analyst with Robert W. Baird & Co. in Milwaukee. Citrix makes software that lets employees view applications on office networks through their mobile devices without transmitting sensitive data.

“This means when a device is forgotten at the airport or something, there is no data or company information on it,’’ Ashley said.

The company sells software to several government agencies that centralizes programs such as Microsoft Corp.’s Word or custom built applications in agency data centers rather than on individual computers, said Tom Simmons, the head of Citrix’s government services division, in a Nov. 3 phone interview.

‘A big opportunity’

Federal officials have shown interest in Juniper’s Pulse product, said Pradeep Sindhu, chief technology officer, vice chairman and founder of Sunnyvale, Calif.-based Juniper. The software allows mobile device management and secure connections to government resources from any location. It works with Apple devices and those using the Android system.

“It is a big opportunity, and the reason we picked Apple products’’ for the software is because of their popularity, Sindhu said in an interview. Juniper announced in October that some Android devices from Samsung Electronics would include the security on smartphones and tablets purchased by government and business clients.

Computer Sciences is also interested in competing for such work, Yogesh Khanna, the Falls Church-based company’s chief technology officer, said in an interview.

“I see mobility as one of the key drivers in reshaping how the federal workforce does its business,’’ Khanna said.

As an integrator, Computer Sciences has used products by companies including Citrix and Good Technology, he said.

Good Technology, a Redwood City, Calif.-based mobile security provider, is under contract with VA to provide a secure way for employees to access e-mail on government-owned mobile devices.

Dell worked with Good to develop a way for government users of one of its Android devices to access work documents and e-mail; the system was cleared last month for use by the Defense Information Systems Agency in tests and demonstrations.

Some federal agencies may choose to manage their own networks’ interaction with mobile devices, while others will turn that work over to a big systems integrator, said Anderson, who is a former associate administrator for e-government and information technology in the Office of Management and Budget.

A likely scenario will be “a giant infrastructure contract with the usual cast of characters,’’ including Computer Sciences, SAIC, Unisys and International Business Machines, Anderson said.

“They would win the contract and start filling in all the parts of the contract,’’ with mobile device management and data security companies, he said.

Eric Engleman contributed to this report.

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