Dayton-area defense contractors carve out their own niche

Dayton Business Journal

July 8, 2019

While many defense-related executives say their firms do have competitive advantages and niche markets they serve, many stop short of sharing anything to tip off trade secrets.

John Leland, vice president for research at University of Dayton, said the university’s Research Institute has a leadership team which continually improves and refines its “certain competitive advantages over other entities.”

“You should understand what your competitive advantages are; if you don’t know what they are you are probably in trouble eventually,” Leland said.

Leland suggests any budding defense startup remain patient and know that strategies may take a long time to implement.

“Understand what your value proposition is; what makes you different,” Leland said. “I think a lot of people have a misconception that breaking into government-funded R&D is easy. And it’s not. It’s slow.”

Leland said it’s a great time for small businesses with unique offerings, including technology solutions, to break in.

“Funding for small business innovation research is increasing dramatically,” Leland said. “And the Air Force is changing up a lot of the rules to enable companies that do not have a history … they feel there’s a lot of tech in the commercial world that could benefit the military and want access to that.”

Jeff Graley, president of Mile Two, said his Dayton firm’s areas of focus include cognitive systems engineering, design, software and human machine teaming.

“I believe there are benefits to being able to do a lot of things very well which leads to plenty of opportunities,” Graley said.

And the hottest areas for defense contracting right now? Graley said he believes those to be artificial intelligence, big data and cloud-based systems.

At Evanhoe & Associates Inc. in Riverside, executives say the hottest areas for defense contracting also include small business, data capture and cyber security, according to Chuck Evanhoe, president, and Bob Fudge, vice president, Public Sector Business.

“Technology is always advancing and we are keeping our eye on future developments in artificial intelligence, block chain, and internet of things (IoT), as our solutions work directly with all of these,” Evanhoe said.

Evanhoe’s niche in the market surrounds data — something it’s built an international reputation for.

“We analyze customer challenges and solve them with IT solutions that make your data actionable,” Evanhoe said, including IT, RFID/Automatic Identification and Data Capture (AIDC), and Internet of Things (IoT) solutions. “Our current efforts range from redesigning U.S. Marine Corps Item Data systems and processes; tracking everything from laptops at the U.S. Patent & Trademark Office to Abrams tanks for the US Army; and using artificial intelligence and machine learning to predict U.S. Air Force aircraft parts shortages.”

Lea Culver, president and CEO of Creek Technologies in Beavercreek, said his firm’s niche in the market was first established by its core skill set of high-quality IT services.

“From that baseline capability, we’ve expanded into educational support services and Homeland Security solutions, and we’re now leveraging all three strengths to move into adjacent federal markets,” Culver said.

Culver said he believes a successful workforce helps to drive future growth and new contracts. When quality and innovation are high, he says, solutions and performance to benefit the clients are also higher.

“Our success begins with our employees’ subject matter expertise, which is why workforce development is our paramount concern,” Culver said. “That’s our definition of organic growth: grow the workforce, grow the portfolio.”

Culver’s advice for an IT or defense startup would be: to possess some kind of intellectual property that will make it stand out in a competitive and rapidly changing market; lower pricing, if you can afford to; and hire subject-matter experts.

“Unless a small business possesses sought-after intellectual property that differentiates it in a highly competitive market, its service offerings are often downgraded, in the minds of potential clients, from a unique ‘software solution’ to mere ‘commodity service,’ a designation that places any firm on the tail-end of innovation,” Culver said.

At Frontier Technology Inc. in Beavercreek, CEO Ron Shroder says the company’s niche evolved from the founder’s passions and areas of expertise.

“A passion to support our military combined with educations in engineering, data analytics, software and business while we focused on locating in customer areas like WPAFB/Dayton formed the foundation of our company’s future,” Shroder said. “FTI focuses on being the trusted source for using innovation and data analytics to deliver informed, productive &secure solutions for our customers.”

Shroder’s advice for any budding defense startup would be to find your passion and confirm that there’s demand for it from customers in the market.

“Then surround yourself with incredible talent that can help solve clients’ challenges,” Shroder said.

One of region’s newest defense contractors, Tangram Flex in Dayton’s Webster Station, was borne out of years of research on developing reliable software for the Department of Defense, said Matt Farrell, a Tangram Flex executive.

“At a broad level, finding your niche is about being focused on what you’re great at – the team and technology that differentiates you – and an unwavering commitment to those things,” Farrell said. “Any niche, at its core, starts with a deep understanding around the needs of a customer.”

Farrell said a company like Tangram must stay “laser focused” on its mission.

Dennis Andersh, executive director of the Wright State Research Institute, said the Institute’s niche role in the market includes the research, testing, and evaluation of products and services in the human machine teaming technology sectors for the U.S. Air Force, the Department of Defense, and a variety of other organizations.

“A good example is new automobiles have drivers assist option for lane control, speed control, distance control, our focus is how the driver (human) interacts with these new autonomous capabilities,” Andersh said. “Rapidly evolving technology is vital in protecting our nation and our people, here and abroad. Much of our work involves the invention of new and better technologies and, then, improving our ability to successfully manage and control the technology that manages machines – such as drones and drones’ systems, for example – which are dedicated to our safety and security.”

Andersh said it’s smart for any startup defense contractor to listen closely to clients’ needs while watching what your competition is doing.

“Be flexible and collaborative,” he said.

Andersh said Wright State Research Institute is currently focused on supporting the areas of technology that will provide military advantages, as outlined in the Air Force 2030 Science and Technology Strategy by Dr. Heather Wilson, former Secretary of the Air Force. Those areas include autonomy and human machine teaming, artificial Intelligence, machine learning and unmanned aerial vehicles, and data analytics.

“WSRI through the Ohio federal research network is also supporting quantum computing, energy storage and integration, advanced hybrid electric propulsion, unmanned aerial vehicles, personal air vehicles, and additive manufacturing to name a few,” Andersh added.  •

https://www.bizjournals.com/dayton/news/2019/07/08/dayton-area-defense-contractors-carve-out-their.html

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