Ken Peterman, the president of government systems at ViaSat, discusses the company’s growth strategy in the UK and Europe, new capabilities and remaining competitive in a changing satellite business with Defense & Aerospace Report Editor Vago Muradian at the DSEI 2019 conference and tradeshow in London. Our coverage is sponsored by L3Harris and Leonardo DRS and in partnership with Clarion Events — DSEI’s organizer — and working with the UK Department of International Trade’s Defence & Security Organisation to bring our audience the best in British defense and security.
Vago Muradian: Welcome to the Defense and Aerospace Report. I’m Vago Muradian covering the 20th anniversary edition of DSEI, one of the world’s truly great defense and security shows here at the Excel Center in London on the waterfront where our coverage is sponsored by L3Harris and Leonardo DRS, and we’re also partnered with Clarion Events, the organizer of this great exhibition that also coordinates a number of different conferences all around the world. We’re working in partnership with the UK Department of International Trade, Defence and Security Organization to bring you the very best of British defense.
We’re over here at the ViaSat stand to talk to my friend Ken Peterman, the President of Government Systems. One of the truly innovative companies in space.
First, Ken, bring us up to speed on where ViaSat-3 is. On each one of the satellites you guys have launched it has been utterly game-changing in the staggering amount of bandwidth and the kind of coverage you guys can provide. ViaSat-3 obviously multiple satellites providing that coverage. Where are we on the program?
Ken Peterman: Of course ViaSat’s a remarkable company with a culture of innovation and employee empowerment that unleashes really creative things. ViaSat-3 should be in place early 2021 with the first one over North and South America. It will bring a terabyte per second of capacity, game-changing. I think right now ViaSat has more capacity on orbit than anyone else in the world and with that first ViaSat-3 satellite we expect to have more capacity on orbit than everyone else combined. So it’s really game-changing.
Then the next two satellites will give us world coverage, global coverage, and those will be about nine months behind the first one.
Muradian: We were just talking, and in a couple of days it will be your 40thanniversary in the space and in the satellite business. I remember you and I talking, it was a long, long time ago where the vision was that the kid on, I think you told me the kid in Seat 38G will have more broadband connectivity than the President of the United States will at the time. Obviously some of those challenges have been addressed in the nearly two decades ago when we had that conversation.
But talk to us about how this game is fundamentally changing. You guys were real innovators. There was resistance from the Pentagon for quite some time to really go to kind of the technology you guys were providing. But now the game itself is changing with more distributed constellations. Talk to us about your guys’ approach and how you’re innovating in this new ecosystem that is fundamentally changing.
Peterman: Well first I think it’s important because we have been in this business a long time and it’s been a really exciting ride.
We saw DoD and the defense industrial base inventing remarkable capabilities and vending technologies on power warfighters to be able to communicate, to be able to be secure, to be safer than they’ve ever been before. Mobile networking, GPS, cyber security, satellite communications. All of these technologies were invented by defense in order to make our warfighters safer and give them the ability to communicate in the really harshest of all possible environments.
That technology leadership’s crossed over now and is in the private sector, and we’re seeing smart phones and we’re seeing companies like ViaSat be a global internet service provider and connect the unconnected with the power of low cost, affordable, high capacity satellite communication.
So I would call it a technology dividend, kind of an untapped opportunity for DoD to move away in these technology sectors, to move away from having to invent technology and really move toward a process of applying and adapting that technology to the warfighters’ use case.
Now for that to be effective the defense community needs to in some ways adapt their current acquisition policy practice and perhaps more so even adapt culture to move away from invention and to assessment in a quantitative and empirical way, be able to assess and empirically measure the performance of these private sector technologies in a warfighter context. Not measure bytes per second, but measure lethality, measure safety, measure mission effectiveness, measure these technologies in the currency that the warfighter measures their mission performance in and then assess it that way.
Muradian: Have you seen a change, I mean obviously every administration wants to do a better job doing this. I started my career covering acquisition reform. I will end my career covering acquisition reform. This administration’s been talking a lot about it. Do you see any of the needles moving? And what’s the advice you’re giving them to break through some of these log jams? Because despite all the positive effort, is the needle moving from the standpoint of a senior member in the industry like you?
Peterman: Well, we’re starting to engage in the conversations with senior leadership and I don’t think any of us knows what the answer is, but we do know the status quo is not the answer. I think that as we move forward and we can demonstrate — in fact think of it this way. The young men and women that are entering the service today and putting on the uniform the way our senior leaders call it, adorning themselves in the cloth of this nation to serve, okay? They’ve grown up in a connected world. They’ve grown up with the power of Siri and with cognitive decision skills, their decision-making has become somewhat dependent upon being connected to the cloud and having that real-time Siri or help in terms of proactive tipping and cueing to let them know what’s going on in the world around them and how to take advantage of it and how to be safe, how to navigate in traffic, whatever it might be.
When they put on the uniform and go into harm’s way and the stakes are so much higher now, they need to have that same kind of capability. They need to be connected in an assured and resilient way. They need to be able to trust the communications and the data that’s being given to them. And they need to have the same kind of proactive tipping, cueing, same kind of cognitive decision-making available to them when they put their lives on the line and serve this nation, as when they go to the movie theater on Friday night with their buddies.
We don’t just have a responsibility to provide them that. We have an obligation to provide them with that. I think that we’re beginning to have the dialogue to measure the power of this capability in a warfighter context, and then to adapt and change the acquisition process so that we can get this technology, the cutting edge, more affordably and faster than ever before.
Muradian: What do you think is the edge that you guys bring to it at a time when everybody is looking at micro sats and smaller sats and broader and broader constellations? There are a number of different guys who are working to do what it is you guys do. What do you think is the element that distinguishes you and is going to give you guys a strategic advantage in an increasingly crowded marketplace?
Peterman: In the defense community we didn’t start out as a satellite provide. We started out as a service provider. So we were buying leasing capacity from other satellite providers in order to stitch together a global capability so that airplanes and ships and military customers could constantly be connected with the best available network. It was from that experience that we developed the capability to design our own satellites, to fill in the gap based on the use case and the sure trajectory that we saw in terms of how they were using the service that we were providing.
So we built GEO satellites that had game-changing capacity. ViaSat-1, as you’ll recall, was launched in 2011 with 140 gigabytes per second of capacity, and state of the art in the market at that time was like 6 or 7 gigabytes for second. ViaSat-2 had twice that. ViaSat-3 will have a terabyte per second capacity, and we will go global with that.
But we think the answer for the military is not to be dependent upon a single network or a single satellite. Certainly not being dependent upon a single military satellite that is easily targetable as a military asset. I think we’ve argued for kind of a Hybrid Adaptive Network, or a HAN, and that military customers need to be able to roam seamlessly between their military assets, their satellites and ground ecosystems, but also be able to roam among commercial assets. GEO, because it offers unprecedented speed and capacity. Perhaps NEO because it has attributes that are a little different than that. And LEO from a low latency perspective. So we’re looking at the ability to be able to roam freely among a hybrid network, a multi-network or a network of networks, and it builds resiliency and assuredness in terms of keeping the warfighter connected in an unprecedented way.
Muradian: Speaking about the warfighter, we’re in the United Kingdom. The British government is looking for options post-2023, Skynet-5 obviously being an important part of their network. We managed to talk to Richard Franklin over at Airbus. Talk to us a little bit about your plans in the United Kingdom, how you guys want to grow, and your sort of Five Eyes vision that you have in trying to forge a sort of bigger global strategic partnership.
Peterman: The acquisition challenge that we just talked about in adapting to be able to apply private sector technologies and keep pace with the accelerated and steepening trajectory that they’re on so this capability can get to the warfighter faster and more affordably than ever before. That’s a Five Eye problem because it’s U.S. companies that are leading in this technology development.
So we have doubled our head count in the UK in the last 15 to 16 months. We’ve added additional geographical locations in terms of our presence in the UK. Because for the Five Eye defense organizations to take advantage of this private sector technology we know we’re going to have to have a sovereign presence with respect to network operations, cyber security operation centers, with respect to logistic support and repair, so that they can take advantage of this technology but yet they can do it with a sovereign presence that actually has economic benefit locally in the Five Eye countries. So we’re doing that in the UK and on the Five Eyes in order to build that sovereign presence so as our ViaSat-3 capability comes on board we have the footprint and the skill set and the talent to support it.
Muradian: And do you feel that there will be any liability as being sort of a heritage American contractor in a market, for example, where an Airbus has been kind of a leading player over the last couple of decades?
Peterman: We’re certainly headquartered in America but we increasingly see ourselves as a Five Eye company with a presence across the Five Eye countries and we’re able to take the technology and apply it in a Five Eye context to create sovereign capabilities in the Five Eye countries to support that.
Muradian: Let me ask you a last question about space vulnerabilities. A much more contested environment. U.S. Space Command is standing up, stood up as we speak. Everybody thinks it’s just a matter of time before the Space Force itself stands up.
As somebody who’s spent four decades in the space business, how is space changing? How are the changing nature of the threats, whether it’s for spoofing or jamming or cyber or even kinetics that are changing how you think about how you deliver capability as a senior industry executive.
Peterman: I think we intend to provide a complement, an augmentation to existing military satellite ecosystems that exist. So if you think of it this way, the entire U.S. DoD use case for satellite communications is about 35 to 40 gigabytes per second of capacity. That’s all in, X-Band, C-Band, UHF, KUKA, leased, owned, everything. If you were to apply that use case to our ViaSat-3 constellation once it’s fielded globally in say 2021 or 2022, that would only be a little over one percent of our three terabytes per second of capacity. So DoD can roam onto these commercial networks and move seamlessly between our network and other networks and do it really affordably. Because fundamentally, you’re only paying for that portion of the network you’re using, and if you’re only using less than one percent obviously that is a significant game-changer. Now satellite capacity is not constrained anymore and roaming among these different assets provides a resiliency and poses a cost and complexity on the adversary’s calculus. Because it’s one thing to target a military asset, a military satellite or a military ground ecosystem. It’s a totally different thing to target a commercial asset, a commercial satellite or ground ecosystem when you’re not even sure that the military’s operating on it at any point time or what portion of it it might be.
So it changes the game and provides a level of assuredness, security and connectivity that’s never been possible before.
Muradian: A number of folks, I feel like I have to ask you this, lasers. I remember being part of the conversation where DoD was saying look, if lasers work out it is going to be game-changing, but if they don’t work out, it’s going to be problematic. It looks like we’re on the cusp of a major revolution when it comes to lasers in terms of increasing the stuff that goes back and forth from satellites. How are you guys thinking about that? How do you employ it? I know you have something to say about this. That’s why I’m asking.
Peterman: When it comes to free space optics, let me think of it in a broader context. When it comes to technology disruption and technology innovation, ViaSat’s culture of innovation, the way that we unleashed and employer employees to find their passion and then chase their passion and release their creative energy to always find a better way for our warfighter customers, that’s going to create enormous advantage for us. So I know I’m not answering your question, but stay tuned because it’s going to be an exciting time.
Muradian: Fantastic. Ken Peterman of ViaSat, the President of the company’s Government Services business. Sir, always a pleasure. Thanks very, very much. And give the big boss a holler out there too when you get back out to California. Thanks very much.
Peterman: Always a pleasure. Thank you.