CACI International Inc (CACI)

[investor911]

Northrop Joins With Academics For Cybersecurity Work

By Ann Keeton
Of DOW JONES NEWSWIRES

CHICAGO -(Dow Jones)- Northrop Grumman Corp.(NOC) is joining with several U.S. universities in a consortium to address near and long-term Internet security.

The Los Angeles company will invest millions of dollars a year for the next five years, and likely beyond, to partner with Carnegie Mellon University, Massachusetts Institute of Technology and Purdue University to find ways to secure computer hardware, software and systems that support information sharing around the globe.

At a press conference Tuesday, which was webcast, Robert Brammer, chief technology officer of Northrop Grumman Information Systems, said each institution will work on several projects that play to its strengths in cybersecurity research. Revenue and patents resulting from the work would go to the institution, or Northrop, or be split, according to how the work is done, according to mutual agreements.

Northrop is a major provider of cybersecurity support for U.S. defense and intelligence, and to civil governments in the U.S. and elsewhere. Brammer said the collaboration will speed up research with ideas that can be incorporated in contracts coming up soon as well as explore pro-active ways to protect information in the public and private sectors.

Security problems are growing as global Internet use is expected to increase 10 times to 15 times by 2015, Brammer said.

The group didn't discuss specific Internet security breaches that have been in the news this year, including hacked information on the Joint Strike Fighter, the Pentagon's biggest defense program.

Gene Spafford, head of the center for education and research in information assurance at Purdue, said warnings on Internet security have been ignored for decades.

"Problems have only been addressed after they've occurred. They could have been prevented," he said.

Adrian Perrig, a professor at Carnegie Mellon, said the Internet gives users the freedom to use any name they want, making them hard to track. But he said technology now exists to identify hackers by backtracking groups of IP packets, or segments of digital information traveling on the Internet, to a source.

Computers don't know right from wrong, said Howard Shrode, a top computer scientist at MIT: "The solution is to tell the computer more about what it is doing in real time." He said that developing "meta data" gives computer hardware the ability to block information.

The Obama administration this year said protecting the nation's computer networks is a top economic and national security priority. Analysts expect that some $30 billion will be spent on Internet security initiatives. That's in addition to security costs already embedded in government IT contracts.

For investors, analyst Howard Rubel at Jeffries & Company said it may be hard to get a handle on specific technology breakthroughs, because they could tip the hands of hackers.

Still, government cybersecurity contracts will be awarded; at the Pentagon, Defense Secretary Robert Gates is keen to hire some smaller niche contractors, which in some cases could unseat bigger incumbents, said Scott Sacknoff, who manages the SPADE Index of Defense stocks. For small companies, a single contract might mean a lot more to the bottom line than it would to Northrop Grumman and its peers, he said.

Some possible winners include CACI International Inc. (CACI), SAIC, Inc. (SAI), and Symantec Corp. (SYMC), Cogent (COGT) and Stanley Associates (SXE).

-By Ann Keeton; Dow Jones Newswires; 312-750-4120; [e-mail]