Pete Gaffney, CEO, Integral Systems

VIA SATELLITE: Is there any difference between providing your services for commercial and government customers?

GAFFNEY: The government has longer schedules than the commercial guys, but I think they have the same amount of urgency. We see them trying very hard to meet their Gapfiller schedule, and usually the delays are on the satellite side.

VIA SATELLITE: Have you reached saturation on the commercial side of your business?

GAFFNEY: The growth potential is not as great. In about 2000, we had hit about 50 percent to 60 percent of market share worldwide, and we’re still at that point. We still see good business, but there is not a lot of growth. The growth is definitely on the government side. Moving into the Air Force market with CCS-C worked our well for us, as the commercial market hit a downturn in 2001. In 2002, that’s when we won CCS-C. So while a lot of other companies in our space were suffering the effects of the commercial downturn, we were growing like crazy due to our Air Force business.

Our feeling is that we started out in commercial and saturated that market. Then we moved into the Air Force market and we’ve done quite well there and there is more growth there. The next area we’re moving into is the classified market. We believe everything we’ve done in the commercial and Air Force markets we can do in the classified markets, and that is where a lot of our growth will come from in the future. We won our first classified command and control systems in October and certainly our credibility in the Air Force market helped us.

VIA SATELLITE: Do you see growth left in the commercial side?

GAFFNEY: We do see some growth, coming from there. Mainly it is on our signal monitoring and equipment and network monitoring and control businesses. We see a couple areas where a lot of the network providers when they build out their satellite network systems, there is an increasing requirement for automated monitoring and control of those systems for quality of service for both the ground equipment and the satellite signals themselves. Our Newpoint subsidiary and our SAT subsidiary provide products that address these markets.

There may also be work for the commercial satellites used by the military, which uses commercial satellites to carry 80 percent of its traffic. Military satellites have interference detection systems, but there are few comparable systems on the commercial side for interference detection that include geolocation. We think there are going to be requirements coming from the government for commercial satellites carrying military traffic that they have better interference detection and geolocation, so we think there will be quite a bit of growth in those areas.

VIA SATELLITE: Is there any difference between providing your services for commercial and government customers?

VIA SATELLITE: Have you reached saturation on the commercial side of your business?

VIA SATELLITE: Do you see growth left in the commercial side?

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