White Paper

w w w. m r c y. c o m WHITE PAPER 2 A Business Model To Deliver Value Discussing the specifics on how to get to flexible, affordable, open and interoperable building blocks to deliver EW solutions that fit the needs of today's world is clearly important. However we believe that the critical missing element within the defense industrial base is a business model that can effectively design, engineer, develop and test those building blocks. That is why Mercury Systems has pioneered a next generation business model to do this. To get a full view of how this model works you can go to our website, mrcy.com, and download a pdf of our white paper; Driving a Next Generation Business Model in Defense Electronics. We believe we've built an approach that, based on commercial busi- ness principles, rests primarily on innovation, taking intelligent risks on behalf of our customers, leading in the development and deployment of open systems architecture solutions, and operating- with eyes wide open- in an environment of tough but needed defense acquisition reform. On top of that we have built specific elements of our business, in an in- tegrated way, to deliver value each step of the way, with the end result of an open, affordable, interoperable, standardized EW solution. Mercu- ry has 30+ years of embedded processing, packaging, and high perfor- mance compute capabilities. In addition, we have deep domain digital processing capabilities as well as best of class manufacturing with our Advanced Microelectronics Centers. Our two scalable, redundant, AMC facilities allow us to engineer, develop, manufacture and test advanced RF, Microwave, and digital technologies from prototype to production, all here in the USA. Finally, our Mercury Defense Systems business has the ability to take advantage of our key building blocks. Mercury Sys- tems leverages our best of class manufacturing facilities and adds on top of that over 30 years of deep domain expertise in EW technologies and techniques. Mercury has worked hard driving true integration of the business on behalf of building leading EW solutions. We have a name for this integration. We call it One Mercury. One Mercury isn't just a Electronic Warfare- A Focal Point Within Defense Today's Electronic Warfare, and EW subsets that include Electronic Attack (EA), Electronic Protection (EP) and Electronic Support (ES) are critical to holding a strategic advantage for the modern warfighter. Early EA systems focused on denying an enemy's use of electronic systems deployed to detect personnel, aircraft and warships. To gain a defensive advantage, modern EA systems have moved toward decep- tive jamming to fool an enemy's system into misinterpreting the elec- tronic environment. Today's irregular or "asymmetric" threats call for deep and hardened technologies that are at the same time flexible and fluid in their ability to adapt to adversaries with highly sophisticated defense strategies and tactics to those with more modest capabilities but nonetheless deadly intentions. All of this has created a renewed focus for the United States DoD as well as those of our allies. This however is happening while the DoD, in its latest procurement directive, Better Buying Power 3.0, has asked us all to show the ability to "Do more without more." The technologies, solutions and tactical weapon systems that fall within the EW domain will need to be mindful of the difficult opera- tional and budget realities we all work under while also recognizing the US defense industrial base has access to unprecedented resources, talent and innovations. As Ash Carter said when being sworn in as our 25th Secretary of Defense: "…as technology and globalization revolutionize how the world works, and also as the Pentagon's budget tightens, we have the opportunity to open ourselves up to new ways of operating, recruiting, buying, innovating and much more. America is home to the world's most dynamic businesses and universities. We have to think outside this five-sided box and be open to their best practices, ideas, and technologies." We believe we have an approach that can help support Secretary Carter's call for thinking outside the "five-sided box" and introduce a workable roadmap on how to build EW innovations that are in step with the DoD's need to do more without more and tap into organiza- tions that can solve tough problems. All while accepting the realities of budget constraints, political uncertainty at home, and constant geopolitical instability around the globe. "All the advanced technology in the world means nothing unless someone can apply a process and discipline to effectively manage design, development, and integration of EW systems. I'd like to see someone who takes process seriously but isn't a slave to it." "EW has been around in one form or another for generations. The way EW solutions get built isn't what it needs to be to meet current and future challenges."

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