In early 2016, TSG IT Advanced Systems was jointly acquired by Israel Aeronautics Industries (IAI) and Formula Systems, in equal shares. This acquisition has enabled TSG, for the first time in many years, to revise their business focus. On the agenda: focusing on exports, mainly of intelligence and C2 products; spin-offs of content worlds and associating with strategic partners for the purpose of establishing new subsidiaries and acquiring other companies in order to complement and develop additional fields of activity. "Our vision is to become a world leader in the field of C2 and intelligence. How many companies do you know, worldwide, that develop C2 systems for the military like our 'Tirat Ha'Agam' system? Very few indeed," says Michael Zinderman, TSG's CEO.
"Under the previous ownership, we were not allowed to develop. Company growth depended mainly on investments by IMOD's Directorate of Defense Research & Development (DDR&D, aka MAFAT). Since we were jointly acquired by IAI and Formula Systems more than a year ago, things have changed. Formula Systems helps us to acquire other companies, and IAI contributes with their international marketing layout. Our Company has 450 employees, and recently we have been awarded a major project of setting up a server facility for the IDF, along with IAI and Leidos. We are responsible for 'migrating' the systems to the new environment. Within a limited number of years, all of the systems should be relocated to the new server facilities."
Don't you expect to overlap some of the existing divisions within IAI?
"A government company such as IAI can normally acquire up to 50% of other companies," explains Zinderman. "That means that our latitude is expected to remain unchanged. All of the considerations regarding the TSG Company are purely business considerations."
Along with some degree of overlapping with existing divisions within IAI, the combination of these companies offers a total that is greater than the sum of its parts, owing to the unique technologies being developed by TSG, like the aerial C2 system the Company had developed, which is used by the Israeli Air Force.
"The air-defense C2 (system) used by the IAF is our development," says Zinderman. "It all started with the Hughes Aircraft Company, which provided the C2 systems to the IAF. We were their sub-contractor in Israel, under the name 'Techem.' That was how our people got to study the world of aerial C2. In the 1990s, following the massive wave of immigration from the former USSR, we developed our own system. That was the new generation which constitutes the foundation for today's systems. We won a tender in Finland with this system and subsequently in Israel as well. That was how it all started. Recently, a major tender has been won in the UK with Rafael as the prime contractor. In effect, the core of the aerial C2 system over there is our system. The IDF Navy also incorporates our system in its vessels and coastal stations.
"For overseas clients, we offer turnkey projects that include all of the system elements, including construction and sensors. In these projects, IAI is our first-call partner as the supplier of sensors and systems that complement ours. That is the advantage of their acquisition."
Since the acquisition more than a year ago, TSG has been searching for ways to expand its overseas operations, mainly through the acquisition of complementary companies in such content worlds as tactical communication, sensors and so forth, or companies that would provide it with a foothold in 'anchor' countries. "The objective is to find companies that can also help us enter new markets. In some countries, you cannot sell unless you have a local partner," explains Zinderman.
Can IAI veto an acquisition if they already possess that capability?
"That will depend on the financing. If I can acquire a company using the resources I have at TSG or bank financing, it will be less complicated," says Zinderman. "But even then I will require the authorization of the Board of Directors that includes representatives from Formula Systems and IAI. If I need IAI to invest money, that will be more complicated. In any case, the authorization of the Board of Directors will be required, with the considerations being objective in favor of TSG."
Systems for Intelligence
TSG leads several knowledge centers for IMOD's DDR&D, mainly around the worlds of software. One of them is the Big Data world. The Israeli defense establishment maintains data pools containing unstructured data that have to be analyzed. These could be data from social media, conversation transcripts, video files and so forth. TSG developed engines and technologies capable of structuring and tagging those data. "Our Company develops large-scale intelligence systems. We developed the intelligence system for the Israel Police. Other developments include dedicated systems for analysts in the intelligence world," says Zinderman.
Another field in which TSG is involved is monitoring the spectrum. On the modern battlefield, real-time dynamic management of the spectrum is the 'Holy Grail.' This capability will enable the IDF to employ all of the technological capabilities available in order to utilize its firepower to maximum effect. During Operation Protective Edge, some events alerted the forces as they had generated false alarms. At TSG they want to solve that problem. "We are currently deploying an infrastructure of sensors along Israel's borders for the purpose of monitoring, studying and analyzing the entire spectrum," explains Zinderman.
TSG is also involved in the cyber field. Among other things, TSG won a tender for the establishment of the sectoral CERT of the Ministry of Energy. The CERT was established in Beersheba and every month, an additional electrical company is connected to it. In the future, gas and water utility companies will be connected to it as well. The CERT, which consists of about 20 operators, coordinates alerts from SCADA infrastructures. Once the alerts have been analyzed, the CERT issues processed alerts to the Ministry of Energy. TSG also offers SOC-as-a-Service for various organizations. One of the clients is the Municipality of Tel-Aviv. "This is a remote cyber center that connects to the municipality's networks and provides real-time monitoring as a service," explains Zinderman, "We are trying to sell this capability to overseas clients, too."
Another system developed by TSG is the C2 system for field teams of the Israel Electric Corporation (IEC), designated "Migdalor" (= Lighthouse). "In the winter of 2013, when the snow storm hit Jerusalem, the system was in use by IDF Home Front Command. The people of the Israel Electric Company saw the system in operation and wanted the same system for themselves. We had the system adapted, and since then they have been working with it. The entire malfunction control and repair management activity of IEC is based on that system," says Zinderman.
The Company's business plan for the next three years includes spin-offs for some of their products. Zinderman's goal is to bring in strategic partners who would help develop the products overseas. One of the products on the list is the precision map-reference system TSG had developed for the IDF. This system produces an accurate map reference when the user "pin pricks" a point on a still or video image, and is regarded as one of the world's most advanced systems.
Identifying a Terrorist
Owing to the fact that TSG serves as a knowledge center in the field of C2 for the intelligence world, it must remain in the forefront of technology at all times. This reality compels TSG to conduct itself like a startup company and continuously test new technologies. One of the fields in which substantial resources have been invested recently is video analysis.
"About ten years ago, IMOD's DDR&D came to us with Professor Amnon Sha'ashu'a (back in those days he was not famous yet), with an idea for the development of a system that would be able to identify a terrorist according to behavior patterns. His vision was the ability to identify an individual suicide bomber within a crowd of people. DDR&D provided funding and we started developing a solution designated 'The Sixth Sense,'" explains Zinderman. "Sha'ashu'a left at some point to pursue other developments, and we continued to develop the system on our own. The development process led to the establishment of our video analysis laboratory for IMOD's DDR&D.
"At this laboratory, we test every new technology that emerges in this field. For the trials, we installed cameras at several locations around the country, to enable us to test the capabilities using real-life data. The system learns the normal, routine behavior for the area and, along with the security officers of that area, we specify and program irregular behavior patterns that should cause the system to generate alerts.
"We developed the ability to perform video analyses opposite cameras installed at junctions in the Judea and Samaria district. We linked these cameras to our laboratory and embarked on a video analysis experiment. The system can also identify/recognize license plate numbers (LPR = License Plate Recognition) as well as other parameters of the vehicle, like model and color. If an incident occurs, the system – which is deployed at all of the junctions – will be able to monitor the movements of specific vehicles, provided they pass through those junctions. This is a capability the security forces did not have in the past. The Israel Police wants this system too, for places like Temple Mount. We added a facial recognition capability to the system.
"Such systems may be used in the context of safe city projects overseas. These projects involve hundreds of surveillance cameras that transmit their data to a control center where dozens of operators attempt to identify irregular behavior. After an hour monitoring the screen, they are no longer able to identify anything. This is where an automatic alert system, like our system, should come in. We cooperated with the Municipality of Tel-Aviv in the context of their smart city project. We also won a tender in India – at a suburb of Mumbai."
Another worldwide demand trend involves naval intelligence systems for military applications, fishery management, energy, counterterrorism and so forth. TSG developed a system that collects intelligence from the maritime theater using such data sources as maritime AIS (Automatic Identification System), satellite imagery, C2 systems, Radar systems and so forth. This system has already been sold to clients in Africa and Asia.
"Border monitoring is another field of activity in which we have been investing substantial resources recently. We have recently reached the final stage of a major project in one of the NATO countries. All of the other Israeli companies failed to reach the final stage," says Zinderman. "Most of the world's countries use sensors – not fences. A client wants intelligence regarding the border area, so you deploy Radars, UAVs, optical surveillance measures and so forth. The objective is to control drug trafficking, smuggling goods and prevent illegal immigration."
Zinderman explains that the Company's business goal is to become a world leader in the field of C2 and intelligence systems. Systems by his Company provide solutions for the air, sea and land theaters. They include capabilities in the field of video, audio and data and machine learning engines that automate various processes. "To become leaders, we must win (tenders for) major projects overseas," he explains. "Our clients are mainly military and HLS organizations. The civilian activity is not yet in our focus. We know how to integrate systems to provide a unified picture of the sky, including Radar and weapon systems. We have a massive database of protocols associated with Radars around the world, in countries where we were involved in projects. We specialize in analyzing the Radar, understanding the protocol and linking it to the C2 system. Radar manufacturers do not share this information with their clients. It is a major advantage that enables the client to keep the existing infrastructure and upgrade it at the same time. Without a doubt, the change of ownership has provided us with a 'tailwind' that enables us to expand overseas, and that is our goal," concludes Zinderman.