March 07, 2007

Defense Technology – Still A Major Source of Commercial Products

I read yet one more notice of one company buying a piece of another, but this one struck me as a bit noteworthy. Nomad Digital, providers and operators of specialist mobility networks, today announced its acquisition of QinetiQ Rail, the commercial rail division of QinetiQ. Most people never heard of the company with the funny Q name, but I recognized them from their Defense business centered in the UK which has recently expanded to the US.
According to the acquirer, “The transportation sector is full of opportunities for a wide range of WiMAX broadband and narrowband mobile wireless services and it is largely under-served by conventional mobile network operators. …. enhance our offering of value added on-train services, such as live CCTV, train operating system applications, more reliable train-to-shore communications and entertainment services for passengers.” He goes on to add “By retaining an interest in Nomad, QinetiQ has demonstrated its conviction that we have a strong business here."
There are some interesting market dynamics here. Wireless technology is clearly important in the defense community and rail systems are a key piece of the national infrastructure moving large amounts of cargo and sometimes people. Railroads need to insure safe and efficient operation of their rolling stock. Some like Eurostar and Amtrak are looking for ways to make themselves more attractive to passengers, especially those able to afford higher fares and add-on services purchases.
Having recently experience a cruise on the largest cruise ship in the world (Royal Caribbean’s Freedom of the Seas) I’m aware of the demand for entertainment and instant access. Migration of defense technology into the commercial sector will certainly help increase accessibility; I just hope we’re all smart enough to know when to turn it off.

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