General Dynamics has acquired federal cloud solution provider Network Connectivity Solutions Corp. (NETCONN), a sign that the federal cloud market is heating up.
The financial terms of the cash transaction were not disclosed. The value is expected to be accretive to General Dynamics' earnings beginning in 2012.
NETCONN offers cloud computing services and enterprise IT services to U.S. Department of Defense agencies, including the Defense Information Systems Agency (DISA). General Dynamics said that Hagertown, Md.-based NETCONN supports net-centric IT operations, including data center infrastructure, value engineering, information assurance and edge computing.
The two companies said that Network Connectivity Solutions will become a part of General Dynamics Information Technology, a business unit of General Dynamics based in Fairfax, Va. General Dynamics Information Technology is a systems integrator, systems engineer and professional services wing of General Dynamics aimed at the defense, intelligence, homeland security, health, federal civilian government, state and local government and commercial sectors.
"NETCONN's capabilities and relationships will bolster General Dynamics' strong portfolio of services and solutions aimed at helping the Defense Department cut costs and increase efficiency while meeting large-scale, enterprise IT requirements," Dan Johnson, president of General Dynamics Information Technology, said in a statement. "NETCONN provides IT support to the DoD organizations responsible for enterprise services and cyber security; this includes serving as a prime contractor on DISA's ENCORE II contract."
DISA's ENCORE II contract, which NETCONN was awarded in 2008, is an indefinite delivery/indefinite quantity, multiple-award contract for use by military services, the Department of Defense, the intelligence community and other federal agencies.
NETCONN has also participated in all aspects of DISA data center design, implementation and operation as a prime contractor since 1997, and is supporting the DoD in preparation for the Federal Data Center Consolidation initiatives, through which the federal government plans to eliminate 100 federal data centers this year and 800 by 2015 in a bid to chop $18.8 billion annually from the federal IT budget.
General Dynamics' move to the cloud comes as federal agencies eye cloud computing infrastructures to cut costs and boost agility. The federal cloud is bustling activity, mostly due to outgoing federal CIO Vivek Kundra, his embracing of new technologies and his promoting a "cloud-first" approach to federal IT initiatives.