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L-3 Buys Data Tactics, Enters Big Data

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Defense operator L-3 Communications Holdings Inc. hopes to benefit from the Big Data Analytic revolution by acquiring Data Tactics Corporation. Data Tactics is a provider of Big Data analytics and cloud computing solution services, primarily to the U.S. Department of Defense.

Why Big Data?

The nature of modern warfare has changed over time. Wars are presently being fought in both symmetric and asymmetric environments. In sync with the changing nature of warfare, the U.S. Department of Defense (DoD) is also updating its strategies by putting more emphasis on network-centric platform for dealing with crisis.

Network-centric warfare involves the collection of data from various sources as well as the seamless to and fro movement of confidential information. This strategy involves collection of huge volume of information and analysis of the same to provide the best solution to end users.

Since the launch of Big Data initiatives in 2012, the U.S. government has already invested $250 million in this initiative. Collection of time-sensitive information, proper analysis of the same and most importantly the security of the information will aid the U.S. defense forces big time to secure its shores from adversaries.

What Data Tactics Brings In

Management’s decision to acquire Data Tactics will boost the performance of the National Security Solutions business of L-3 Communication. The company forecasts that the acquired business could generate sales of $50 million for the year ending Dec 31, 2014.

Apart from boosting the top line, the acquisition brings in more than 150 data scientists, engineers, architects and developers, the majority of whom possess U.S. government security clearances.

This talented group of individuals will spearhead cutting-edge research in the field of ultra-large-scale data management and cloud computing solutions.

Our View

The DoD has always been ahead of the technology curve. The ongoing space programs are a classic example of their technology leadership. With time, the volume of sensitive data will keep on burgeoning. It is here that Big Data Analytics will come in handy, providing solutions for proper storage, safety, data mining and easy access to this information from a cloud based structure.

Given the growing importance of Big Data solutions, we believe this acquisition will be a long-term growth driver for L-3 Communications. The company currently has a Zacks Rank #3 (Hold).

Other defense majors like Lockheed Martin Corp. (LMT - Free Report) , The Boeing Co. (BA - Free Report) and Raytheon Co. (RTN - Free Report) are already working on providing data solutions. The ultimate objective of this technology is to help users to capture, manage and analyze big volume of sensitive data, which would lead to prompt decision making.

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