Is Commercial Innovation Transforming National Security Space?

Transcript:

John Gilroy: Welcome to Constellations, the podcast from Kratos. My name is John Gilroy and I’ll be your moderator. Today, we’re talking with Damian DiPippa, CEO of Auria, about how rapid changes in the space industry are reshaping mission execution, what makes government industry partnerships effective, and what it takes to move commercial technology from early innovation to operational capability. National security space is evolving quickly. Missions are becoming more complex, architectures are becoming more distributed, and governments is increasingly looking to industry to bring new capabilities forward faster. That puts greater emphasis on two things, stronger partnerships across government and industry, and the ability to integrate commercial innovation into government security missions. With that in mind, Damian, let’s start with a few questions.

Damian DiPippa: Absolutely. It’s great to be here.

John Gilroy: So what has changed in national security space that makes partnerships more important today than they were five or 10 years ago?

Damian DiPippa: Yeah, I would say five, 10, even 20 years ago, one of the biggest changes that we see in the market space and in national security space is really the entrance of new users, entrance of new companies that are bridging both commercial and I would say military and national security space. Many of these companies are really focused on innovation in what they’re doing and also very distributed across the companies. You have some like a SpaceX or a Blue Origin or a Rocket Lab that is doing launch, some of which are also doing satellites, others that are focused on strictly communication systems, others that are focused on onboard compute and data analytics, and others that are focused on collection and the sale of collection. And so all of that is a big difference from what we saw maybe a decade or two ago where the government kind of controlled the space economy, so to speak.
And with that, you kind of had single integrators that provided the end-to-end solution from orbit all the way to the ground, they built the single integrated system and then it didn’t really connect with much else than their own integrated system. And now with very distributed users, the commercial market space, that environment has dramatically changed and the pace of technology is dramatically changing in the space environment as well, mainly due to what I would call the whole space ecosystem and the space economy that now bridges the commercial environment as well.

John Gilroy: So putting this in perspective, the last 10, 15 years, so what does an effective partnership between government, traditional defense companies and commercial technology providers look like today?

Damian DiPippa: Yeah, an effective partnership would really be the ability to bring in emerging technologies into an end-to-end mission. I won’t even call it a system, I’ll call it a mission, where the government has to be thinking ahead of, I can’t afford to change the entire system when my requirements evolve or change over time or when the impending threat or the mission itself changes over time as well. The costs are too great, the environment is too expanse and you just can’t afford to replace an entire end-to-end system. So you’ve got to be thinking more as to open architectures, “How do I get away from a vendor-agnostic solution that locks me in over a decade or two decades and doesn’t allow me to evolve the architecture as these things like the technology and the threats change?”
And so the architectures have to be built more open. Those of us in industry who are working in this environment, we have to be thinking about that as, “How do I integrate not only with legacy systems with the new state of the market systems, but then how also will I accommodate new emerging systems that come out later?” And the government has to be thinking that way too, of buying in parts, buying in pieces that integrate together that tie into an overall end-to-end mission rather than trying to buy a single-source solution from end-to-end.

John Gilroy: Yeah. I think everyone will agree that partnerships are important, but there’s trouble here. There’s challenges too. So where do you see the biggest barriers to these partnerships? Is it acquisition, culture, technology integration, security or something I’m missing?

Damian DiPippa: It covers all those to a certain extent, right. The evolution of the technology and being able to ensure that you have technologists that are designing systems that are open and can allow to be vendor-agnostic. On the government side, some of the challenges I would say on the government side is getting used to not owning the end-to-end system or owning all the data associated with it, being able to take into account the fact that, “Hey, I’m the government, but I may not be the primary customer of some of these folks. I’m the secondary customer. The commercial marketplace out there is trumping me and I’ve got to get used to the fact that I can’t have full control over what it is I’m buying from that aspect.” So there are challenges there. And then there are challenges even in the commercial world with some of the developers who are less likely to want to incorporate other people’s technology into their systems, right.
It’s kind of the, “Hey, we want to build it ourselves,” type mentality. And that might not necessarily be the best approach as well. You could get the market faster. Again, you might not be able to own the whole thing end-to-end, but somebody else might be building a better constellation management software package or a better communication spectrum management package, and you should be willing to be able to accept that, take that and license that capability, utilize it in your broader system. That’s the way we work a lot with our customers today, as a matter of fact, where we’re innovators and integrators of command and control systems from orbit all the way to the tactical edge. And then we help to integrate these fragmented systems so that they are able to communicate with each other. But it does require some of our customers, both on the government side and on the industry side to say, “Hey, we’re going to license that from you and utilize you to integrate our two pieces together and not own your piece of this mission.”

John Gilroy: If I put you in a classroom, you can get the whiteboard and write down collaboration and give a good lecture on it. But how do companies collaborate effectively while still competing for many of the same programs and customers? This is a challenge here, isn’t it?

Damian DiPippa: In many ways, this hasn’t changed that much over the past 30 years. We have had many large-scale systems integrators and even smaller companies and many of which I’ve worked with over the years where sometimes we’re the prime and sometimes we’re the sub, sometimes we’re competing. And we even have that today. I think we’ve been working that very well, and I think some of our partners really understand that environment very well because we do have licensable products that we sell. We’re also a prime as a large-scale systems integrator on many programs and we do partner as well. And even your own parent company, Kratos there, in some cases we do compete against each other. We’re a major sub to Kratos on this latest ground mission integration work that’s being done. And then in some cases, Kratos is just licensing our products and not even utilizing our team, but just licensing our products.
And I think that’s just a environment everybody’s got to get used to going forward and you really can’t take it personal in some cases. Sometimes you’re going to team, sometimes you’re not. Sometimes you’re going to compete, sometimes you’re not. And I think that’s just something we all have to be very, very comfortable with. And I think those companies that are really going to expand their portfolios in the future are the ones that are really going to be able to do that effectively and be able to navigate, I would say, this entire competimate market space.

John Gilroy: Let’s dive a little bit deeper into this. It’s a tough one to juggle. So space architectures are becoming more distributed, interconnected. We know that. Does that change what government should expect from these industry partners we’re talking about?

Damian DiPippa: Yeah, we’re even seeing the government move in that direction more and more. Like I said, the government is now asking for things in more of parts versus less of an end-to-end system. Also, the way the government is acquiring is becoming different as they go forward. Many of our opportunities, particularly I’ll say within U.S. Space Force, Space Development Agency, those entities that are tied together there, they are not putting out these large-scale traditional national team RFPs like we’ve seen in the past per se. And we are getting a number of what I would say are multi-phase acquisitions and competitions where the government is first asking for maybe just a short technical description of what you would apply and put into place. And then they’re down selecting from there and then they’re asking for an oral presentation from your technical team. So it’s kind of like let’s eliminate the AI-generated proposals that anybody could put together and really put up the experts and see if they can really describe what it is that they’re doing and talk to it in a live environment. And then from there, they’re down selecting and putting together 12, 18, 24 month kind of prototyping efforts before they then go to a production. And so personally, we love this type of environment because we have actual fieldable, deployable systems and we are innovators and we work in that environment. And I am seeing more and more of that so that the government can kind of try before you buy as you go through. And even within some of these acquisitions, we are now seeing where the government is specifically asking to incorporate commercial technology into that because the pace of change on the commercial side really is outpacing in many cases what the government is able to do with their sponsored R&D type efforts as a result. And the government actually benefits from that. In what we’re doing with some of our constellation management software, our payload spectrum management software for SATCOM, we sell these on the commercial marketplace.So year after year, we’re innovating. We’re using our own investment dollars to continue to evolve these product lines so that we can sell it on the commercial market space. And now when we do a larger-scale integration effort for the government where we take that commercial product and incorporate it into our end-to-end solution, the government really takes the benefit of the fact that we on our own dime have evolved this product in order to be usable and it’s been proven in actual real-world environments and all we have to do is integrate it into their system at that point. And so they really do see that advantage and cost as a result of applying those commercial technologies.

John Gilroy: I’m taking down notes. I’m taking down Space Force, then try before you buy. Try before you buy sounds very commercial and that’s what I was going to ask about this whole commercial aspect of it. And a lot of people can say, “Try before you buy,” but in the national security arena, that gets kind of difficult. So what does it really mean in practice?

Damian DiPippa: I think it falls right in with where the Space Force, for example, has started kind of with their mantra of, “Exploit what you have, buy what you can, then build what you must.” And I think that’s just a smart way of doing it. And then we’re seeing that across the board too. I mean, not just with Space Force, but you see it in NASA. NASA’s using commercial providers now for launch as well as moon landing and other things and applying those technologies out there. You have very innovative companies, Redwire, Intuitive Machines that are out there building things and deploying them so that they can prove in a demonstrated real-world environment, we have this. And then customers like a NASA or a NOAA or a U.S. Space Force can then, or even the intelligence community can then take these capabilities and apply them to their mission space.

John Gilroy: Damian, a CEO sitting in Chicago somewhere is going to say, “Oh, how does this technology, how does it make a difference?” And you’re going to have to defend it. But we’re talking about national security infrastructure here. So how can commercial technology make the greatest difference for national security? Is it speed, cost, flexibility, access to new capabilities or something I’m missing here?

Damian DiPippa: Yeah. In my view, it is going to be two things and it’s going to be speed. That’s one of the definite advantages you have on the commercial market space over, I would say, long-term government contracting of old in that given how you have to evolve your product lines year to year, you can bring technology to market much faster than maybe would’ve been able to have been done in the past as well. So that’s critical. But two, I would say as a industry or commercial provider out there, you do need to ensure that what you’re providing is open. It’s not vendor locked. You get into that type of situation and then you’re audited into these one-off usage kind of areas. And most of our customers aren’t really looking for that as they go forward. They really are looking for solutions that can expand over time, that don’t lock them in.
For example, we do an antenna-as-a-service type capability where we tie in commercial antenna providers through a cloud environment into the satellite control network. And one of the big open things we really want to look at is what if the government wants to use a different type of cloud provider? Maybe it’s an AWS or an Oracle or an Azure cloud. And so that architecture has to be able to be open to account for the different customers that might want to use a different type of cloud solution or security solution or a different type of payload or even a different type of space vehicle that could then apply to that application. So I think we within industry need to keep that in mind into what we’re doing. And then I think too, we do have to realize that it still is the U.S. government when we are working with the government.
They are going to have certain security policy things and they can’t bend on some of those. And so we’ve got to be flexible to incorporate those into our solutions when they ask for them. And so if the design of our solutions aren’t open to account for that, it really does provide kind of a barrier to entry then in working with that customer.

John Gilroy: Yeah. You’ve been around, you’ve seen commercial companies try to go into federal government and fail. And so my question to you is, so how do you take technology developed with a commercial mindset and make it ready for the security resilience and these really stringent operational requirements of the defense mission?

Damian DiPippa: Yeah. You really do need to understand the mission. You really do need to tell the story to those customers as to how the product or the solution that you have really provides benefit within that mission space all the way down to the end user. We love to say, look, we are doing command and control solutions from orbit, all of the tactical, all the way to the tactical edge. When we talk at the tactical edge, we are then talking about that individual mission user, either at an op station or somebody using one of our LPI/LPD radios out in the field for secure communications. What is their environment? What is their mission? And how is it that what I’m providing to that user, that final mission user, beneficial to their mission and how is it quantifiable from that sense as well? And so when we’re doing that, we really do need to speak in their terms and not assume that this customer or this mission user is just going to understand the technology based on the commercial application or the other applications out there within the space economy.

John Gilroy: Yeah. Earlier you mentioned procurement. I’ve got a little question about that. So how should government think differently about buying existing commercial technology versus funding the development of a purpose-built solution?

Damian DiPippa: Right. I think the government does need to think about the openness as well of the architecture and how it could evolve over time in the future. And then two, the government does have to get comfortable as well with this changing environment of they can’t own everything associated with that. They can’t own all the data rights, particularly in some areas. Maybe there are mission-specific or classified pieces of that that have to be partitioned off that that is what the government owns, but there are portions of that that are dependent upon that company’s commercial applications and the government has to get used to that. I won’t say his name, but I was recently in a dinner with one of the senior ranking generals within the Space Force with some other industry leaders and he openly admitted, “Hey, we’re one of the smallest budgets in the U.S. military. If your whole business case relies on the U.S. Space Force, that’s not likely the best business case for you out there. You need to find other applications.”
So they recognize that they’ve got to co-opt other applications for some of these or other customers for some of these tools, and then therefore they can’t really have the exclusive rights to some of this stuff. And I think that’s a big change of what we would’ve noticed, particularly a decade or two ago within the national security space area where it was mostly managed and run by the U.S. government.

John Gilroy: Exclusive rights. That’s a hot button technology today. And so what role do open architectures and interoperability play in allowing government to bring new commercial capabilities into existing systems without starting over?

Damian DiPippa: It’s got to be the primary role. Look, we’ve got space systems sitting up there that have lived well past their design life and that’s a great thing. That’s a great thing, but it also means, for example, in one of the areas we’re working, there are analog systems up there that … And what we’re doing to tie those together, we got to do the analog to digital conversion so that it can tie in with modern systems today as we’re going mostly all-digital from that perspective. And so yeah, openness has got to be a primary factor in all of this as you think about how we go forward and how we tie together these fragmented systems. We’ve got to take into account the fact that, like I said, there’s decades-old technology up there. There’s the current state of the market technology, and then the next generation is already emerging.
And like I’ve said, I’ve never seen the pace of technology change within the space economy like I have now, throughout my entire career. The pace of change is the fastest now that I’ve ever seen. And so it’s important that these architectures be open to be able to account for that. Otherwise, you’re going to end up with a system five years down the road that’s already obsolete. And the threat is changing massively as well. As we think about the various applications of what space data and the space resources are being used for, it’s not just GPS anymore, right. It’s not just imagery.
It’s trying to be able to handle threats such as the detection of hypersonic glide vehicles, swarming UAVs, and how does that data move swiftly from the time it was collected to where a warfighter needs to make a decision in order to counter that threat? That threat’s going to continue to change like we’ve never seen before either. And so if you don’t have an architecture that’s open, you’re going to try to redesign something for a threat today that’s now not going to be the predominant threat five years from now when you actually can deploy a full system.

John Gilroy: We began this interview with you looking back in time. Now we’re going to end with you looking forward in time. So Damian, looking ahead five years, what needs to change in the relationship between government and industry to get useful technology into national security space missions faster?

Damian DiPippa: Yeah. I think some of the change is already occurring as the government is looking to acquire things in parts. What that will mean too is either the government is going to need to hire internally experts that are able to do kind of the oversight of the integration portion, or they’re going to have to hire outside people to kind of be the GC, the general contractor of some of these end-to-end systems, recognizing that they got to pull in multiple technologies from whether it be small garage-built kind of key payload systems to the larger sale ground infrastructures that all has to fit together. So I think they’re going to have to move forward with that kind of thought. And then I think what’s going to have to change as well in order to keep this going is we’re going to have to be thinking more and more beyond Low Earth Orbit and Medium Earth Orbit.
We got to be thinking things of use of the cislunar environment, how we more apply things like the Lagrange points outside in order for parking and staging of applications, you know, as we start going into the moon too, what do we need to do with orbital assets around the moon and that type of thing. So I see this continuing to evolve more and more. And so the technology is going to rapidly move in that direction as well. And so I think we need just to be leaning forward, ready for that, knowing that whatever we’ve designed today has got to be applicable 10 and 15 years down the road as well to integrate with something new.

John Gilroy: Damian, I think you’ve given our listeners a deeper understanding of government industry partnerships. I’d like to thank our guest, Damian DiPippa, CEO of Auria. Thanks, Damian.

Damian DiPippa: Appreciate it. Thank you.