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Booz Allen Invests In Second Front Systems to Speed USG Innovation

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Booz Allen Hamilton (BAH) has announced a strategic investment in Second Front Systems, a corporation accelerating the delivery of mission-critical solutions for the U.S., Europe, Australia, and NATO. The investment supports 2F's Game Warden DevSecOps Platform, a tool that configures, secures, and deploys Impact Level accreditations for software delivery to U.S. government customers, including the Department of Defense. This investment aligns with Booz Allen's business strategy and supports its Chief Technology Office and Digital Battlespace Platform missions.
Positive
  • Strategic investment in Second Front Systems to support the Game Warden DevSecOps Platform
  • Acceleration of software delivery for U.S. government customers, including the Department of Defense
  • Alignment with Booz Allen's business strategy focused on velocity, leadership, and technology
  • Support for Booz Allen's Chief Technology Office and Digital Battlespace Platform missions
Negative
  • None.

Insights

The strategic investment by Booz Allen Hamilton into Second Front Systems (2F) signifies a notable development in the defense technology and software industry. This move is indicative of a broader trend where defense contractors and consultancies are increasingly investing in innovative technologies that can provide them with a competitive edge in the market. The Game Warden DevSecOps Platform, which is at the center of this investment, represents a potential paradigm shift in how software is accredited and deployed for government use, particularly within the Department of Defense.

From a market perspective, the ability of 2F's platform to reduce the time and cost associated with obtaining an authority to operate (ATO) is significant. The traditional two-year timeline and the $1.5 to $2 million cost for software accreditation can be a substantial barrier to entry for many firms. By streamlining this process, 2F could enable a broader range of technology providers to participate in the government IT market, which is valued at over $100 billion annually. This could lead to increased competition and innovation within the sector, potentially affecting market dynamics and the profitability of established players.

Analyzing the financial implications of Booz Allen Hamilton's investment in 2F, it's important to consider the potential for cost savings and efficiency gains in the government IT procurement process. The investment aligns with Booz Allen's VoLT (velocity, leadership and technology) business strategy, which may be a signal to investors about the firm's commitment to integrating cutting-edge technology into its service offerings. The emphasis on velocity and leadership through technology could translate into enhanced service capabilities and potentially higher margins if the Game Warden platform is widely adopted.

Moreover, the investment could have a positive impact on Booz Allen's stock value by positioning the company at the forefront of a niche but critical market segment. The ability to offer a compliant and fully managed production environment for software deployment at an accelerated pace could be a strong selling point for Booz Allen's government contracts, potentially leading to increased revenues and market share.

From a cybersecurity standpoint, the Game Warden DevSecOps Platform could represent a significant advancement in securing the software supply chain for government IT systems. The platform's focus on securing and deploying Impact Level (IL) 1-7 accreditations is crucial as it encompasses a wide range of security requirements, from controlled unclassified information to top-secret data. The ability to provide this level of security in a scalable way is particularly relevant given the increasing number of cyber threats targeting government infrastructure.

By facilitating the entry of non-traditional vendors into the defense market, the platform may also diversify the pool of software solutions available to the government. This diversification can lead to more robust security postures as it reduces reliance on a limited number of software providers, which is a common point of vulnerability. The impact of this investment on cybersecurity standards and practices within government IT procurement could be substantial, potentially setting new benchmarks for the industry.

Investment supports first of its kind authority to operate (ATO) software for day one mission impact

MCLEAN, Va.--(BUSINESS WIRE)-- Booz Allen Hamilton (NYSE: BAH) today announced that its corporate venture capital arm, Booz Allen Ventures, LLC, has made a strategic investment in Second Front Systems™ (2F), a public-benefit corporation accelerating the delivery of mission-critical solutions in the U.S., Europe, Australia, and for NATO.

This investment supports and further powers 2F’s Game Warden DevSecOps Platform, a first-of-its-kind tool that configures, secures, and deploys Impact Level (IL) 1-7 accreditations for companies to deliver software to U.S. government (USG) customers, including the Department of Defense (DOD), enabling a compliant and fully managed production environment. Delivering commercial software as a service (SaaS) and authority to operate (ATO) to government with built-in accreditation, 2F’s Game Warden enables non-traditional vendors and technology providers to innovate at the speed of need to meet Day One mission demands in today’s heightened geopolitical environment.

“The U.S. government spends more than $100 billion annually on information technology to modernize federal cloud infrastructure and deliver mission solutions,” said Julie McPherson, executive vice president at Booz Allen and leader of the firm’s Digital Solutions business. “Accreditation of new software applications typically takes two years and approximately $1.5 to $2 million to obtain an authority to operate. 2F streamlines this process, accelerating the adoption of commercial off-the-shelf solutions for DOD, U.S. government, and key allies in today’s fast-paced environment.”

The investment by Booz Allen Ventures is aligned with the firm’s VoLT business strategy, focused on velocity, leadership, and technology—and supports Booz Allen’s Chief Technology Office and Digital Battlespace Platform missions. “The Game Warden Platform not only accelerates software delivery across our portfolio, but it unlocks an entire ecosystem of promising software products and capabilities that have been out of reach of operational programs and users,” said Booz Allen Executive Vice President Steve Escaravage, executive vice president at Booz Allen and leader of the firm’s Digital Battlespace Platform.

“This is the future of software accreditation to speed innovation for critical missions and U.S. advantage,” added Brian MacCarthy, senior vice president at Booz Allen and managing partner for Booz Allen Ventures. “We invested in 2F not only because of anticipated mission impact, but also mission understanding: Their accreditation solution reduces barriers to entry in a safe, standardized, and scalable way for non-traditional vendors developing real, novel, and needed solutions.”

2F’s leadership team is comprised of veterans with deep military and tech experience—aligned with Booz Allen’s efforts to develop client solutions at the heart of mission understanding and technology expertise.

“As we work to change the relationship between commercial software and national security, collaborating with Booz Allen was the obvious choice,” said Tyler Sweatt, CEO at 2F. “Combining the Game Warden platform with their broad customer and program expertise and insight will allow us to rapidly scale the impact of commercial software in national security and we couldn’t be more stoked.”

Additional investors in 2F this funding round include NEA and Moore Strategic Ventures, LLC.

Since launching in 2022, Booz Allen’s $100 million corporate venture capital arm has made seven strategic investments in early-stage companies and dual-use commercial technologies with focus on four core areas: defense, artificial intelligence/machine learning, cybersecurity, and emerging/deep technology. Previous Booz Allen Ventures investments include Latent AI, Synthetaic, Reveal Technology, Credo AI, Hidden Level, Shift5, and Hidden Layer.

Read more about Booz Allen Ventures.

About Booz Allen Hamilton

Trusted to transform missions with the power of tomorrow’s technologies, Booz Allen Hamilton advances the nation’s most critical civil, defense, and national security priorities. We lead, invest, and invent where it’s needed most—at the forefront of complex missions, using innovation to define the future. We combine our in-depth expertise in AI and cybersecurity with leading-edge technology and engineering practices to deliver impactful solutions. Combining more than 100 years of strategic consulting expertise with the perspectives of diverse talent, we ensure results by integrating technology with an enduring focus on our clients. We’re first to the future—moving missions forward to realize our purpose: Empower People to Change the World®.

With global headquarters in McLean, Virginia, our firm employs more than 33,100 people globally as of September 30, 2023 and had revenue of $9.3 billion for the 12 months ended March 31, 2023. To learn more, visit www.boozallen.com. (NYSE: BAH)

Forward Looking Statements

Certain statements contained in this presentation and in related comments by our management include “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements include statements that do not directly relate to any historical or current fact. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “could,” “should,” “forecasts,” “expects,” “intends,” “plans,” “anticipates,” “projects,” “outlook,” “believes,” “estimates,” “predicts,” “potential,” “continue,” “preliminary,” or the negative of these terms or other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we can give you no assurance these expectations will prove to have been correct.

These forward-looking statements relate to future events or our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. A number of important factors could cause actual results to differ materially from those contained in or implied by these forward-looking statements, including those factors discussed in our filings with the Securities and Exchange Commission (SEC), including our Annual Report on Form 10-K for the fiscal year ended March 31, 2023, which can be found at the SEC’s website at www.sec.gov. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary statements. All such statements speak only as of the date made and, except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

BAHPR-CO – Company-wide release

Media Relations: Amanda Allison-Martini, Allison_Amanda@bah.com

Investor Relations: Nathan P. Rutledge, Rutledge_Nathan@bah.com

Source: Booz Allen Hamilton Holding Corporation

FAQ

What is the nature of Booz Allen Hamilton's strategic investment in Second Front Systems?

Booz Allen Hamilton has made a strategic investment in Second Front Systems to support the Game Warden DevSecOps Platform, a tool that configures, secures, and deploys Impact Level accreditations for software delivery to U.S. government customers, including the Department of Defense.

What is the purpose of 2F's Game Warden DevSecOps Platform?

2F's Game Warden DevSecOps Platform is designed to accelerate the delivery of mission-critical software solutions to U.S. government customers, enabling compliance and fully managed production environments.

What is the focus of Booz Allen's business strategy?

Booz Allen's business strategy is focused on velocity, leadership, and technology, aligning with its Chief Technology Office and Digital Battlespace Platform missions.

What are the core areas of focus for Booz Allen Ventures' investments?

Booz Allen Ventures' investments focus on defense, artificial intelligence/machine learning, cybersecurity, and emerging/deep technology.

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