BAE Systems, the UK engineering and defence giant, says sales from its Cyber and Intelligence division will shrink in 2013.
This is in spite of the strategic focus that BAE has placed on cyber security. "The group’s strategy includes growing its positions in the cyber and intelligence services markets for governments, and pursuing organic growth opportunities in commercial cyber and security applications and systems," the company said in its annual financial report today.
In 2012, the Cyber and Intelligence division grew by 16% to £1.4 billion, as overall sales shrank 7% to £17.9 billion.
This year, however, "Cyber and Intelligence sales are expected to be marginally lower than those in 2012".
The Cyber and Intelligence division includes UK security unit Detica but also sells large military and government information systems.
The company said that "efforts to reduce the US government’s budget deficit are likely to impact all areas of government spend" and that "the US market is experiencing delays in procurement awards … as US government agencies look to reduce IT budgets.
BAE Systems does not break out revenues for Detica specifically, but said that the company "expects growth in cyber and intelligence, both in the UK and overseas government markets, with increasing demand for products and services in commercial markets to manage cyber threats, counter financial fraud and improve compliance, including next-generation security for mobile device".
It pointed to the recent five-year contract with Vodafone as evidence of its penetration into the private sector market.
It also said that Detica's UK Security Operations Centre became "fully operational in 2012, providing services to detect and remediate advanced cyber attacks for clients".
The company's annual report gave an insight into some of the large IT programmes that BAE Systems is currently working on.
These include providing secure IT equipment and a desktop virtualisation environment for the US Defense Intelligence Agency. It is also develop a new image storage and management systems for the US National Geospatial-Intelligence Agency.