The future of the aerospace industry lies in information technology and professional services. The aerospace industry has undergone a dramatic change of heart about information technology and professional services -- and that change has permanently realigned the balance of power.

Long considered the dirty work of building and designing systems, IT, as it is known, and not manufacturing has become the central task in building systems that kill or fly. A dramatic decline in orders for hardware also has forced that intent on surviving the ongoing consolidation to shift their focus and resources from manufacturing to software, maintenance and related electronics -- the guts of the weapons systems that really make planes, tanks and ships potent killers. That realization is driving the relentless consolidation in the aerospace industry, say analysts, insiders and observers.

Expertise in information technology and professional services is in various fields - new air traffic control systems, computers for the IRS, or emergency dispatch for the local fire department etc.

The impact of this trend has been to raise the attractiveness of systems integrators and professional services firms. These companies have worked for decades in the shadow of aerospace prime contractors. They have done what was considered dirty work -- and what now is literally becoming the real business of aerospace.

At Farnborough, for instance, the Russians expressed their willingness to sell just about any kind of plane they manufacture. But there are few takers, because the electronics-related integration and software for these planes are so poor. "It's the computers that make these systems lethal," said Schmidt.

So the balance of forces has changed dramatically. The shift has and will continue to be a boon for the industry.

DynCorp, a $1 billion professional services firm in Reston, Va., has purchased 10 companies since 1991, most in information technology. "We're looking for more acquisitions. That is not a secret," said Dan Bannister, DynCorp president and CEO.

Boeing Information Services announced a similar intention. The unit aims to build a $1 billion information technology company in five years, and will probably need to acquire companies with revenues of about $250 million to get there.

This shift in the aerospace business therefore means continued acquisitions -- and plenty of business for investment bankers arranging the deals.

The Svelte leverage:

We help our clients increase productivity, reduce costs and compete more effectively in the changed environment. We bring consulting, evaluation, implementation and maintenance services for a complete range of packages in the area of SCM, ERP and CRM in addition to custom application development and implementation for ensuring collaboration, standardization, integration and visibility across the operations. Our deep understanding and vast experience in the aerospace domain, expertise in IT consulting and services & a proven Delivery model makes it a Partner of Choice for providing end to end solutions in the aerospace industry.