GMM Panelists Share Tips on Strengthening Cybersecurity

Cybersecurity gained prominence as a topic of discussion at ICI’s General Membership Meeting (GMM), held last week in Washington, DC. “Hugely important,” said Mary John Miller, the Treasury Department’s under secretary for domestic finance, in her GMM remarks. Likewise, Securities and Exchange Commission Chairman Mary Jo White told GMM attendees that addressing online vulnerabilities must be “a constant focus for both the regulators and the broader business community.”

That focus also was on display May 3 at the Operations and Technology Conference, where a panel of technology experts explored the origins and implications of cyberattacks. Panelists also provided the audience with cybersecurity advice, including the following pointers.

1. Check Every Link in the Chain

“Any of your service providers could be attacked and could leak data,” said Stewart A. Baker, a partner at Steptoe & Johnson LLP. Baker, who helped formulate U.S. cybersecurity policy as assistant secretary for policy at the Department of Homeland Security and as general counsel of the National Security Agency, urged attendees to get assurances from all service providers about data security arrangements.

Panelist Avivah Litan, vice president and distinguished analyst at Gartner Research, agreed that understanding the security of service providers was essential. “We’re only as strong as the weakest link,” she said.

Full story at ICI Viewpoints

Beltway Bet: iRobot

Since an initial public offering three years ago, iRobot’s stock price has steadily dropped. The Burlington, Mass., company, whose machines can vacuum your floor or help soldiers sniff out roadside bombs, went public at $24. Recent price: $9.

By certain metrics, the stock looks tempting. Its latest 12-month price-to-earnings ratio is a modest 15, while the company’s enterprise value, market capitalization plus net debt, stands at just 0.6 times its 12-month revenue of $316 million. The latter multiple is in line with a big defense contractor like Lockheed Martin and well below that of a comparable niche technology company like AeroVironment, whose enterprise-value-to-sales multiple is 2.5.

Full story at Forbes.com

Pentagon Worries About Chinese Chips

Washington, D.C. – At a conference in Washington, D.C., this week, a Department of Defense official sounded a startling alarm.

“The defense community is critically reliant on a technology that obsoletes itself every 18 months, is made in unsecure locations and over which we have absolutely no market share influence,” said Ted J. Glum, director of the DoD’s Defense Microelectronics Activity unit.

“Other than that,” he cracked, “we’re good.”

Glum addressed his comments to a crowd of defense officials and industry execs gathered for the 2008 Common Defense Conference, or ComDef, an internationally focused event held annually in Washington.

This year, threats to computer networks were front and center. But Glum underscored that the Pentagon has hardware headaches too, particularly when it comes to microprocessors. Ninety percent of the department’s obsolescence problems, he said, are related to electronics.

Full story at Forbes.com

Solar Entrepreneur To Feds: Step It Up

At the upcoming U.S. political conventions, it’s a safe bet you’ll hear more than a little bluster from Democratic and Republican parties about the need for federal “investment”–don’t call it a subsidy–in renewable energy technologies such as solar, wind and so on.

A lot of hot air? It won’t be for Frank van Mierlo, co-founder and president of Lexington, Mass.-based 1366 Technologies. The young company has raised $12.4 million in venture money in support of its mission to make solar power cost-competitive with coal by 2012.

Key to that mission: a more vigorous role for the U.S. government. “There is no way that we can change the energy resources in our society without real leadership from the government,” says van Mierlo. “The current administration, it’s sad to say, has not provided that leadership.”

Full story at Forbes .com

Political Risk Watch: Nanotechnology

In print and online, Forbes has chronicled the amazing potential of nanotechnology, or the ability to see, manipulate and manufacture things that are as small as one-billionth of a meter.

At a Wednesday event in Washington, D.C., a panel of experts didn’t play down that potential.

“The future of nanotechnology is extraordinary,” said J. Clarence Davies, a former Environmental Protection Agency (EPA) official who now serves as a senior adviser to the Project on Emerging Nanotechnologies at the Woodrow Wilson Center in Washington. “When you start crossing it with synthetic biology and artificial intelligence and so on, science fiction looks very pale in comparison.”

Lately, however, the market has not shared in the enthusiasm, at least when it comes to pure-play nanotechnology stocks. In the table below, we show four that have dropped more than 45% from their respective 52-week highs.

Uncertainty stalks these companies. Altair Nanotechnologies (nasdaq: ALTI – news – people ), Nanophase Technologies (nasdaq: NANX – news – people ) and Nanosphere (nasdaq: NSPH – news – people ) have never turned a profit, and security analysts project that all will lose money for their current and upcoming fiscal years.

Another source of uncertainty, although not necessarily a negative, is regulation. Thicker red tape surrounding nanotech is practically inevitable, say Davies and colleagues, who have released a 28-page regulatory agenda for the next administration.

Full story at Forbes.com

Mining Government Tech Dollars

WASHINGTON, D.C. – Silicon Valley entrepreneurs are infamous for complaining about the burden of government regulations. But as Splunk, a San Francisco-based data analytics and search company, has discovered, there can be gold in red tape.

Splunk’s software organizes and tags unstructured, computer-generated information such as Web server access logs, configurations and alerts. Splunk users can then search that indexed data, via a browser-like interface, to troubleshoot network problems, monitor security and track trends such as Web surfing behavior.

Four years ago, Michael Baum and two colleagues founded Splunk to help data center administrators diagnose problems across a server system. Their cheeky marketing material got our attention with its use of terms like “borked” and snarky catch phases like “Take the ‘sh’ out of IT.” The company’s moniker is a play on “spelunking,” a term coined by IT specialists to describe sifting through mountains of machine data.

Splunk’s technology and Silicon Valley hipster shtick caught on quickly with a stodgier crowd: government bureaucrats. This was an unexpected turn of events, says Baum, but one the company is eagerly exploiting.

Full story at Forbes.com

Beltway Bet: Advanced Micro Devices

Washington, D.C. – Advanced Micro Devices, the Sunnyvale, Calif., semiconductor concern, is in town this week for FOSE, an annual public-sector technology trade show that attracts 20,000 buyers, sellers and hanger-ons to the nation’s capital. At exhibition booths, breakfast speeches and in its own sponsored meeting room, AMD is making its case before the Beltway crowd.

In doing so, AMD (nyse: AMD – news – people ) certainly can’t tout its recent stock market performance. The company’s shares have slumped 62% from a 52-week high, versus a 14% decline in the S&P 500 index. At six bucks, AMD goes for 0.6 times sales–less than one-fifth the 3.3 price-to-sales multiple for shares of bigger rival Intel (nasdaq: INTC – news – people ).

AMD shareholders have been suffering for some time; two years ago the stock stood at $43. Will it rebound to those heights? We haven’t a clue. But we can say that AMD’s success in the public sector provides some support for the case made by AMD bulls.

Full story at Forbes.com

The Pressure Is On For Ceramics

WASHINGTON, D.C. – In the early 1980s, buzz grew loud around the use of ceramics in motor vehicles. Given advances in the technology, certain experts argued, it would not be too long before entire engines could be mass-produced from the hard, heat-resistant material.

Those experts were wrong. “The performance characteristics of an ‘all-ceramic’ engine are not that attractive, really,” says John Heywood, a professor of mechanical engineering at the Massachusetts Institute of Technology.

Still, as automakers struggle to go easier on the environment, more ceramics will end up in cars, particularly for emissions control and cutting the weight of components. Publicly traded participants in the ceramics business, notably Ceradyne (nasdaq: CRDN) and Japan’s Kyocera, stand to benefit.

Full story at Forbes.com

Zero To $2.5 billion In 18 Years

Washington, D.C. – World Wide Technology, a technology distributor ranked 199 on our most recent list of America’s largest privately held companies, has chalked up some impressive recent sales stats.

Over the past three years, the St. Louis company has averaged annual revenue growth of 25%, thanks to business from blue-chip tech customers such as Cisco Systems (nasdaq: CSCO – news – people ) and Dell (nasdaq: DELL – news – people ). WWT has worked for the latter company since 2003 and now has 100 folks on the account. Those employees forecast and monitor demand for computer components at Dell factories. A network of WWT warehouses replenishes those factories with trucks, loaded up with gear from dozens of suppliers, that arrive every 45 minutes.

Contrast WWT’s sales growth with its publicly traded competition in the table below–the average three-year revenue growth number is 10%. Only two companies, Brightpoint (nasdaq: CELL) and Nu Horizons Electronics (nasdaq: NUHC), beat World Wide Technology on this metric.

And WWT tells us that it doesn’t owe its top-line growth to mergers and acquisitions. “It’s been organic,” says Joseph Koenig, 43, WWT’s President. “Five years ago, we put together a plan of where we wanted to be, and it’s really execution of that plan.”

Full story at Forbes.com

Beltway Tech Stocks: Bottom’s Up?

Washington, D.C. – Working from BB&T Capital Markets’ northern Virginia office, stock analyst Michael Lewis has spent the last six years building up a network of government and defense contacts.

“I tell investors that, at the end of the day, it doesn’t matter what our ratings are, what our price targets are,” says Lewis. “Our value proposition to the investment community is what we’re hearing at the Pentagon and on [Capitol] Hill.”

At an event hosted last week by the National Defense Industrial Association, a trade group, Lewis heard from high-level budget personnel at the U.S. Army, Air Force, Navy and Marine Corps about their 2009 priorities. One conclusion Lewis drew from the event: Funding threats to information technology projects, which have dogged several big tech services stocks, may be diminishing.

Lewis tells us that none of the military’s budgeters on the panel explicitly said cuts to information technology projects were off the table, but at the same event a year ago, there was talk of scaling back on technology in favor of immediate concerns (like fighting two wars). Not this year.

“[Information technology] wasn’t even brought up,” says Lewis. “That was very surprising.”

Full story at Forbes.com