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CNF Technologies growing into a DoD cyberscurity powerhouse | #hacking | #cybersecurity | #infosec | #comptia | #pentest | #ransomware


The military’s push to increase its capabilities in cyberwarfare by partnering with private contractors is nothing new for CNF Technologies.

One of San Antonio’s largest and fastest-growing cybersecurity companies, it’s been in lockstep with the Defense Department for two decades, aggressively pursuing deals to expand its presence in a new era of cyberwar.

That continued last month, when the private company won a five-year contract worth $135.65 million to research and develop digital technologies for the Marine Corps. It’s the third in a trio of Pentagon contracts worth about $263 million reeled in by CNF in the past two years amid a push to build collaborations among military branches, federal agencies and private technology firms.

“The federal sector, and especially in the DOD, has really come to realize that they just have historically never had access to innovation,” said Steve Barish, the company’s chief strategy officer. “They’re putting a lot of energy and money into trying to find ways to reap some of the rewards of what private industry is doing.”

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That’s reflected in the explosive growth at CNF, which generated about $50 million in revenue last year — up a whopping 878% since 2015. To keep up, its staff has been growing, too. Its current head count of 110 represents a 200%-plus leap in the same time frame.

Contracts like the one it landed last month are driving those numbers, which put CNF atop its cybersecurity peers in San Antonio.

“We are honored and humbled to be awarded this contract,” said Freddy Ramirez, chief executive officer. “It is a great opportunity to showcase what CNF is able to do, and it expands our footprint outside of San Antonio.”

It also showcases how far the company has come from its mom-and-pop roots stretching back to the old Kelly AFB.

The shift

Ramirez’s father, Fred, a former civilian cybersecurity worker at Kelly, founded the company in 2005, about four years after the base closed. His mother, Roxanne, a former public school teacher, was chief executive officer.

Over the next decade, it operated like many other small firms started by employees and veterans who worked with clients on Security Hill they knew from their days on active duty or in civilian service. It had one main customer in the cyber wing that would become the 16th Air Force at Joint Base San Antonio.

Like other small companies, CNF struggled due to cuts in military spending stemming from the 2013 debt ceiling compromise.

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Barish helped introduce a shift in business strategy when he joined the company in 2015. Before moving to CNF, he served on active duty for four years in the Air Force cyber wings on Security Hill at JBSA-Lackland and worked as a federal contractor for over a decade.

“After talking with Fred, we moved from on-site services to a more advanced research and development prototyping and solution development,” Barish said. “We were focused still on cyber, but more focused on developing technology and technical advantages than deploying subject matter expertise.

 “We shifted from a consulting role to a real research and development solutions and that has made a huge difference.”

‘Meteor growth’

CNF Technologies has profited from diversifying its client list, especially as the Defense Department increasingly sought help from private technology to ramp up efforts to build power in cyberspace.

“Fred knew that to grow the company over 10 years, we had to go out and reach new customers,” Ramirez said. “That’s when Steve joined and the joint mentality between the two of them paid off.”

In 2018, CNF Technologies became one of five groups to share a five-year contract worth up to $950 million from the Air Force Research Laboratory, the primary scientific research and development center for the U.S. Air Force. The contract called on the company to serve cybersecurity customers in the Defense Department and intelligence communities.  

“One of the biggest challenges our DOD customers face is getting access to innovative technologies fast enough to make a difference,” Barish said at the time. “In the cyberspace domain, threats and vulnerabilities change so quickly traditional acquisition cycles of a year or more just can’t keep up.”

The Air Force Research Laboratory began solving that problem with the 2018 contract.

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“Now, DOD and intelligence community customers can identify a cyber need and have CNF experts engineering solutions to the challenge underway in weeks,” Barish said.

Ramirez said that contract also marked the time the company began expanding its cybersecurity services to include software development. CNF’s new business strategy would garner multiple federal contracts that year with a ceiling of $220 million.

In 2019, the company generated revenue of $38 million, up 726 percent increase from $4.8 million in 2015. By 2021, its revenue reached $48 million.

“We experienced meteor growth,” he said. “What goes along with that kind of growth is the need to develop systems, back-end support, and regulatory compliance and procedures to be able to continue to operate efficiently.”

The clientele 

CNF Technologies expects to continue to grow from an expanding client list.

The U.S. Cyber Command, which runs the military’s offensive and defensive operations in cyberspace, accounts for about 40 percent of its revenue. The Defense Advanced Research Projects Agency, which oversees emerging technologies for the military, is about 25 percent.

The 16th Air Force, which has reportedly pursued signals intelligence, surveillance and cyber operations relating to Ukraine and Russia, remains a prime customer, Barish said, accounting for about 16 percent of CNF’s revenue. And Space Force, the newest branch of the military, generated 15 percent. The remainder is made up of smaller projects through Air Force Research Labs.

“We are no longer a monolithic entity,” he said.

The Marine Corps contract it won last month is expected to become a bigger part of its revenue in coming years.

It calls for 90 percent of the work to be done at the home of the Marine Corps Systems Command in Quantico, Va. The Virginia-based command is the lead contractor that oversees weapons and information technology for the Marines. The remainder is expected to be done at the company’s office at Port San Antonio. 

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The objective, the Marines said in the report, is “to research, develop, integrate, and purchase software, firmware and supporting hardware to enable commanders to disrupt, deny, degrade, or destroy targets in cyberspace.”

And as the company wraps up work on the five-year contract it won in 2018, it’s preparing to move forward with two other contracts from the U.S. Air Force Research Laboratory that were announced last month.

CNF won a $100 million, five-year contract to serve cybersecurity customers in the Defense Department and intelligence communities. The company was one of five small businesses called “in support of rapid research, development and prototyping of cyber capabilities.”

“This contract allows us to offer our current customers continued access to the technologies and domain knowledge of CNF and our teammates, in addition to providing another avenue for potential customers to do the same,” Ramirez, who replaced his mother as chief executive officer in late 2021, said in a statement.

The second contract for $28 million has not been publicly announced, Barish said. He declined to speak about the classified work it calls for.

The niche

The Pentagon traditionally had been slow to adopt new technologies and first sought technology experts from longtime private partners — giants like Lockheed Martin, Raytheon Technologies and Northup Grumman  — to develop digital tools needed for national security.

As a smaller company, CNF Technologies found its niche in being able to move quickly in the growing cyber military market.

“We’re nimble,” Barish said. “We may not have the ability to have the financial resources of the big companies, but we have the right talent base to come up with really innovative solutions.”

As the company has expanded, it’s moved beyond working mostly in defensive cybersecurity operations, which aim to safeguard U.S. assets.

“Now, maybe half of the work we do is projects of that nature where we’re either developing or integrating capabilities to defend the nation’s enterprise,” Barish said. “The remainder of our business is focused on extending that into counterintelligence, where you might need to know if people are nefariously using the assets to access information. We do a lot of offensive cyber operations, and we do a tremendous amount of work in industrial control systems working with the power grid to try to secure those.”

Among its enterprises, CNF is developing artificial intelligence-powered cybersecurity technologies and taking on expanding threats of radio frequency attacks on computer networks.

“It’s quite a different focus from the company we were in 2015,” Barish said. 

Employee growth

CNF Technologies now is discussing a new business strategy hinging on the size of its workforces in Texas, Maryland, Colorado and Virginia.

Ramirez, who worked for nearly a decade as an assistant district attorney in Bexar County’s Public Integrity and Cyber Crime Division, last month spoke with military veterans who attended a job fair hosted by the U.S. Chamber of Commerce Foundation’s Hiring Our Heroes, JBSA and Port San Antonio.

About 80 percent of CFN’s employees are military veterans who work often work on top-secret and secret contracts, he said. He wanted to recruit military veterans who might have security clearances or certificates showing they have entry-level cybersecurity skills. At the time, the company had about 25 job openings, of which 17 were on the  Port San Antonio campus.

It wants to grow its workforce, and that means expanding the company enough to provide career paths for its employees to stay.

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“We treat it like a family,” Barish said. “You can’t have talented people stay in a static position. So, we have to grow to grow opportunities.”

Barish said he believes the company’s “sweet spot” is about 500 workers.

“We definitely intend to continue aggressive growth for the foreseeable future,” he said. “But I don’t see us trying to become a 3,000-person company. I think we want to stay nimble enough to really continue to attack smart problems that a lot of companies can’t.”

Ramirez echoed those goals.

“Being able to hire the talent and perform like larger companies while maintaining the flexibility and agility of a small local firm is the sweet spot,” he said. “We never want to get to a point where execution suffers.”

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