In some respects, L-3 Communications Holdings (LLL ) is the brains behind the networked war. It makes the high-tech boxes that link ships, jets, and command stations -- everything from the sensors on drone aircraft to the sophisticated systems that enable secure "communications on the move" for a Bradley Fighting Vehicle.
Along with products for military communications, reconnaisance, and surveillance, the New York City company's offerings include military flight simulators, airport security systems, and acoustic undersea-warfare systems. No wonder business has taken off. Started only six years ago by Loral Corp. veterans Frank C. Lanza and Robert La Penta, L-3 is now one of the country's top 10 defense contractors with $4 billion in sales and more than 25,000 employees.
BusinessWeek Associate Editor Diane Brady recently spoke with CEO Lanza about his views on the challenges of the current conflict in Iraq and the future of networked warfare. Edited excerpts of their conversation follow:
Q: Is technology really the key to how this war is being fought?
A:Things have changed dramatically in the last 10 years because of technology. We're able to have a simultaneous air war and ground war. In '91, we bombed for close to two months before we had a ground war. We can now do both at the same time because the command and control and communications on the battlefield are so much better.
We now have more machine-to-machine communications where we can now air-task and plan the battle on a daily basis. Second, with the ability to have smart munitions, you can take out particular installations very accurately and very precise. In the past, you had to spend days and weeks and months taking out targets. That's a major change.
Q: One of the risks of machine-to-machine communications is that a systems glitch or incompatible systems can result in so-called friendly-fire incidents.
A:Friendly fire is one of the risks. It wasn't good in '91, but it's getting better. The Patriot that shot down a British aircraft is obviously some kind of failure. There's no way to shoot down a friendly aircraft with a secure encrypted system.
Perhaps the Patriot didn't interrogate the aircraft, or maybe something wasn't turned on. Something broke. It wasn't a problem with the system. We fixed that problem after '91. Maybe something wasn't encrypted correctly. Maybe they were using their own encryption. I don't know, but something was wrong.
Q: It almost suggests that a multilateral fighting force is the last thing you want to conduct an efficient networked war.
A:It's harder to conduct a networked war with a multilateral force, because if they're not interoperable, the command and control will become very difficult. That was the problem in '91. It took six countries to vote on going against a target. That's not happening now, and the British and U.S. forces are really tied together probably more than any other forces.
If you start bringing in more countries, it can become extremely difficult to coordinate command and control. What's politically expedient isn't always the most efficient, but you often need those allies for political reasons.
Q: What would you describe as the heart of your role in this war?
A:Information is no good unless it's fused together someplace. In many cases, we do that. The Predators and the Global Hawks are driven on the ground by our networks. We enable communications up and down the line. We have very important sensors collecting the radar and communications data.... We have more than 1,000 people supporting special forces.
Q: Some people think of this as Silicon Valley going to war. In essence, the roles have reversed: Where military technology once spawned commercial uses, the private sector is spawning technology that can be adapted for military use.
A:To some extent, that's true. About 15 years ago, we would have to build systems from the ground up. With the microprocessors available now, for example, we don't have to do that. We can buy off-the-shelf high-speed microprocessors, and our software becomes the proprietary part of it.
Why should the military do that when the commercial world already spends billions in developing the computers? For example, we used to have to develop all of our own graphics. But now, with Hollywood and multimedia, we can buy their graphic processors, modify them to suit the needs of an F-16, and spend our time with the operational scenarios to train the pilots.
Q: What are the cost benefits?
A:It cuts the costs dramatically. In 1986, we sold simulators for F-16s for $35 million a piece. Now we can build them for about $2 million to $3 million a piece. Moreover, we can do much more with each one. We used to have to build dedicated simulators for each type of aircraft. Now we have simulators that can train six types of air crews simultaneously.
We built a software program where you can climb out of an Apache and get into an F-16. And, instead of a big dome, we have special helmets that project exact visuals of where you're fighting -- the terrain, the missile strikes -- and you can change everything in real time. They have to learn to fly the planes, but we can take them into the exact battlefield conditions they're likely to encounter.
Q: Has the increased reliance on commercial products increased America's vulnerability in terms of defense?
A:It has made the enemy smarter. For $1,000, I can buy exact images of Iraq's terrain. It tells me where they are. But it also tells the enemy where I am. We spend billions of dollars on proprietary communications systems yet, now, you can get on the Internet to do command and control using a public network, or cell phones, with very little overhead investment. The enemy can go on the open market and buy aircraft or missiles [developed by other countries] for cents on the dollar.
The commercial world has permitted access by rogue nations to some very high technology. Commercially, you can buy some fairly secure encryption software. On each box, it says it can't be exported. But what's to stop anybody from putting it in their bag to take it overseas? How do you control it? So we're giving the enemy secure encryption. Not that we can't break it eventually, but we may not have the time.
Q: So where is all this leading?
A:We're heading toward what is truly network-centric warfare (see BW Online, 1/7/03, "The Network Is the Battlefield").
Q: Isn't that the buzz word of this war?
A:We're not there yet. This war is going to show the possibilities. But to be truly network-centric means tying together all of our radars and war planes.
We went from dumb bombs to smart bombs. B-52s used to drop dumb bombs.... The bombs [we drop now] aren't that different. The jets are the same. What's different is the information we can gather and how we can use it to increase the accuracy of hitting targets. We're not platform-driven now. We don't really need new ships or new airplanes. We need to transform those platforms, so that there's more machine-to-machine communications, more linkages, more information.
Q: As everything becomes more automated, isn't there a greater risk that the enemy can tap the system and turn it against us?
A:The enemy's ability to tap into our machine-to-machine or man-to-man communications is a fear. That worries us on the technical side. We have to anticipate the next stage and build a product ahead of the need.
Q: Does this emphasis on networked warfare change the nature of military recruits and the skill sets they need?
A:It has already changed. If you look at the skill set of personnel in the Army -- because people wrongly assume the Air Force may take some smarts but the foot soldiers tend to be dumb -- they're bright, they're sharp, and they know how to manipulate the technology. You can't be in the military now without have a sophisticated skill set.
Q: Are we going to eliminate human factors altogether?
A:We want to go machine-to-machine and get the person out of the loop because you can't do it fast enough. We used to have 1,000 people do command and control and air-tasking. We've gotten it down to hundreds, and we can do it faster. It takes hours instead of days. With machine-to-machine, it can be faster. A human can't keep track of it. That's the definition of network-centric.
Q: What do we give up?
A:We can't afford to have a breakdown. The mobility factor -- where you move 50 kilometers a day -- requires new technology. We can no longer rely on our friends or allies to give us bases overseas. We've proven that in spades in Turkey and some Middle East countries. We're going to have to develop a war structure through technology that doesn't rely on having overseas bases.
We have to find a way, through technology, to bring more structure in without bases.... Technology has to find a way to make a light brigade that has mobility and survivabilty and firepower. That's the job for the Army in transformation.... Unarmed vehicles (UAV), robotics -- why do I have to send a soldier into a town when I can send a sensor in there to look around before I commit a young person? A UAV can knock out a surface-to-air weapon.
We have sensors that, on their own, can be used as hunters and killers and surveillance. We'll get to the point where we don't need to commit people to unstable situations.
Q: Iraq seems like an ideal forum for this digitized combat, insofar as you can swarm a confused enemy. Would all this technology work well in North Korea?
A:It's totally different. We go into Iraq with clear air superiority. That's not true in North Korea.... All they've got to do is unload on Seoul, and then you'll have 2 million refugees coming down. You won't be able to get a tank up the road. You don't have flat ground. You have caves. We could do it, but the attrition could be enormous.
We're developing weapons in the next 10 years that will take the man out of the equation -- that could save lives. And that's how I measure our success -- by the extent to which we can save lives.