EXEC INTELLIGENCE: Hardware security is back. Here's why it matters.

🎯 THE QUOTE

"Running these processes and hardware is inherently more secure than software solutions."

— Brian Faith, CEO, QuickLogic

Not a software vendor. A chipmaker. Talking about cybersecurity for strategic and tactical weapon systems.

When defense contractors bake security into silicon instead of relying on software patches, that's not a trend. That's a verdict.

WHAT'S ACTUALLY HAPPENING

Intrusion shipped 230 critical infrastructure units to the Department of Defense in Q3.

CEO Anthony Scott on deal economics: "These tend to be bigger sales. $100,000, $200,000 above kind of opportunities."

Compare that to traditional endpoint security. Same customer profile. 10x the ACV.

QuickLogic is expanding work with a Defense Industrial Base company on weapon system security.

CEO Brian Faith: "We will soon announce the expansion of our involvement with a DIB that specializes in cybersecurity for strategic and tactical weapon systems. This DIB designs secure system-on-chip processors that leverage the enhanced security that only eFPGA can provide."

Scott on why hardware matters now: "The OT environment is probably the biggest area of underinvestment from cybersecurity perspective. And it also happens to be one of the biggest targets for nation state actors who in anticipation of some sort of aggressive activity would love to take out water systems and the electrical grid and communication systems."

What changed: OT security moved from underfunded to board-mandated with DoD validation. Lead with hardware security, close with software integration. The inverse loses.

THE QUANTUM URGENCY YOU MISSED

Infineon Technologies became the first manufacturer worldwide to receive Common Criteria certification for post-quantum cryptography implementation on a security controller. They're also shipping quantum processors to customers.

CEO Jochen Hanebeck on the timeline: "Powerful quantum computers will be able to break established encryption methods within a few years, an enormous security risk. In particular, durable products with long development cycles are at risk. That's why we are already supporting our customers today with solutions for post-quantum cryptography based on the principle of protecting data today that must remain confidential tomorrow, so in the quantum age."

Viasat CEO Mark Dankberg on current demand: "The very first application is in what people are calling quantum-resistant cryptography... So one of the highest priority objectives in any secured infrastructure is making them quantum-resistant. So that's driving a big refresh in secure systems especially in the U.S., but globally as well."

On data center drivers: "All this stuff is driving demand for data center cryptos... as well as the speeds that are needed as well as the quantum resistance as well as other cybersecurity threats that are also evolving along with the quantum threat."

Translation: Post-quantum crypto isn't 2030 planning. It's current-quarter procurement for financial services, healthcare, and defense. If you're positioning this as "future-proofing," you're already behind.

BY THE NUMBERS

37% — Tinexta Cybersecurity revenue growth, driven entirely by defense division

71% — Tinexta EBITDA growth in defense-focused security

100,000+ — Users on Ask Sage's FedRAMP High platform (acquired by BigBear.ai)

16,000 — Government teams using Ask Sage

30+ — Frontier AI models deployed across DoD via Ask Sage

$15B+ — Annual U.S. consumer cybercrime, growing double-digits (Gen Digital)

50% — Gen Digital's consumer fintech division growth YoY

First-day impact: Mastercard + Recorded Future took down hundreds of fake merchants on launch

THE MARKETPLACE STRATEGY

BigBear.ai acquired Ask Sage specifically for its production scale and accreditation.

CEO Kevin McAleenan: "Ask Sage is currently one of the only model-agnostic gen AI platforms holding FedRAMP high accreditation with over 30 frontier models deployed across DoD and national security customers. Ask Sage already supports more than 100,000 users on 16,000 government teams and hundreds of commercial companies, which means we're not only buying an idea, we're buying a turnkey platform that's in production today at scale in the environments that matter most."

Intrusion launched Shield Cloud on AWS Marketplace in Q3.

CEO Anthony Scott: "We're really excited about the launch of our Shield Cloud offering on the AWS marketplace, which we believe will help drive long-term growth for our business."

Azure launch coming Q4 or early Q1 2026.

Why this matters: FedRAMP High + marketplace listing = pre-cleared vendor status. Deal cycles compress from 9 months to 90 days because procurement uses existing cloud contracts. If you're not marketplace-ready with security certifications, you're not competing for federal deals.

THE SOVEREIGNTY PLAY

Secunet Security Networks grew 12% on NATO defense spending and German federal budgets.

CEO Marc-Julian Siewert on positioning: "We wake up every single day to secure Europe, to secure Germany, and we are going to move further into European markets, positioning ourselves as the guardians of Europe's digital freedom."

On what sovereignty means: "Sovereignty in that sense does not mean to close ourselves off, but to make it secure and have secure stacks and sovereign solutions, especially for the most important secrets that we need to deal with."

On the budget environment: "We can obviously see substantial developments with a NATO target of 5% of GDP, with the special funds on infrastructure and defense in Germany."

Your European angle: European buyers want regional alternatives, but they're choosing architecturally sovereign solutions, not inferior tech. Partner with regional cloud providers. Demonstrate data residency. Position as "sovereign-ready infrastructure with global scale."

THE AI AGENT SHIFT

Globant won Natura's S/4HANA migration against traditional SAP implementers.

CEO Martin Migoya on how they differentiated: "This quarter, we announced that Globant will lead their S/4HANA migration, chosen for our ability to seamlessly integrate innovation and AI into SAP methodology, development and testing while enhancing traditional implementation efficiency. Together with SAP's Joule, our AI agents and platforms will accelerate delivery, reduce time to market and support the clean core strategy by anticipating deviations and suggesting real-time corrections."

FIS CEO Stephanie Ferris on AI agent deployment: "We've deployed a ton of work in our AI agents, and that's been more around how do we help our human agents serve our clients better. That's been really successful."

The distinction: These aren't chatbots answering questions. They're agents executing tasks and completing workflows. Can your AI complete a task without human intervention? If not, you're selling features while competitors sell headcount reduction.

THREE QUOTES THAT CLOSE DEALS

On AI adoption velocity:

"I've never seen banks adopt technology faster in my entire 25 years. They typically don't adopt technology quickly. They've adopted this technology faster than I've ever seen."

— Stephanie Ferris, CEO, FIS

Use when: CFO says "we need 12 months to evaluate AI integration." Your response: "Banks—the most risk-averse industry—are deploying AI agents in production quarters ahead of their original timelines. The risk shifted from moving too fast to falling behind competitors who already moved."

On hardware security:

"Running these processes and hardware is inherently more secure than software solutions."

— Brian Faith, CEO, QuickLogic

Use when: Selling to critical infrastructure, manufacturing, or OT environments. Lead with hardware-based security validation for weapon systems and critical infrastructure, not software-only approaches.

On quantum and data centers:

"All this stuff is driving demand for data center cryptos... the quantum resistance as well as other cybersecurity threats that are also evolving along with the quantum threat."

— Mark Dankberg, CEO, Viasat

Use when: Selling to cloud providers or enterprises building AI infrastructure. Position around data center security requirements driven by quantum threats and AI computational demands, not just perimeter defense.

THE AI PLATFORM HESITATION YOU CAN EXPLOIT

Pivotree CEO William Di Nardo on why big platform deals are stalling:

"As a result of folks still being somewhat uncertain about how AI is going to play, I think we are going to continue to see folks reluctant to do really big, expensive long-term projects because they're still not really sure how AI is going to affect that ecosystem. So we're seeing experiments. We're seeing POCs. And I think as a result, we're also seeing some delays in making big decisions to do wholesale platform shifts."

On the strategic shift happening: "What we're starting to see are more questions about AI agents being more foundational. Rather than put it on top of an existing infrastructure, the questions are starting to get asked, do I redesign this process to start with AI in mind?"

The opportunity: Platform replacement deals stretched to 18-20 months. AI-specific projects closing in 6-8 weeks.

Your repositioning: Stop selling full platform replacement. Sell the AI acceleration project that makes existing infrastructure smarter. Prove ROI in 90 days, then discuss broader consolidation.

The pitch: "Deploy our AI layer on your existing security stack. Demonstrate value in 90 days. Then we'll discuss platform migration with proven ROI already in production."

THE CONSOLIDATION PLAY

NICE acquired Cognigy and repositioned as the only vendor combining leading AI platform with leading CCaaS platform.

CEO Scott Russell on the impact: "We've already increased our win rates, but we're looking at even higher win rates as a result of NICE Cognigy. There is a large amount of market, both internationally and in the U.S., which are evaluating their transformation journey where they've got an on-prem suite, fragmented solutions and they're trying to figure out what's my transformation road map."

On the optionality buyers want: "What it's meant for us is instead of saying you've got to do your CCaaS move to the cloud first and then do your AI, they love the optionality, 'hey, I might lead with my AI, get some real productivity and automation savings that will drive through', but then the unified platform gives us that potential to have even higher win rates."

If you're a point solution:

• Demonstrate you replace 3+ existing tools

• Partner with platform players who own infrastructure relationships

• Consider acquisition before multiples compress further

If you're a platform: Acquire point solutions with proven install bases and strong margins. The market's rewarding consolidators with higher win rates.

THE M&A SIGNAL

Mastercard acquired Recorded Future (#1 threat intelligence company) to combine payment data with dark web intelligence.

CEO Michael Miebach on the strategy: "Recorded Future is the #1 threat intelligence company in the world. We bought them in December last year, and we've been busy integrating. And one of the synergies we had in mind, we were dreaming big at the time was we got all this payment data. They got all this threat information. How about you bring both of this together?"

On first-day results: "When we launched this in the market, we had some initial reactions from the best banks here in the United States that are very, very good in cybersecurity. So we went to the best to test it. And we saw on the -- in the space of fake merchants... Hundreds of fake merchants were taken down like on the first day of that."

The pattern: Acquirers are buying installed base + accreditation + proprietary data, not just technology or features.

Valuation implication: If you have government customers, security certifications, and proprietary threat data, your valuation multiple just increased regardless of growth rate. Strategic buyers are paying for time-to-market compression and immediate production scale.

THE CONTRACTS WORTH TRACKING

NATO 2030 Defense Spending: Secunet reported accelerating orders tied to NATO's 5% GDP defense target and German special infrastructure funds. US vendors with sovereign deployment models can compete, but regional preference requirements take effect in Q1 2026.

DoD Critical Infrastructure Expansion: Intrusion shipped 230 OT security units to DoD in Q3. That's pilot-phase volume. Full deployment contracts expected Q1-Q2 2026 as other defense contractors adopt the hardware security model.

European Digital Infrastructure: Multiple European cybersecurity companies mentioned sovereign cloud and digital currency security work. Prime contracts favor EU vendors, but subcontractor opportunities exist for specialized capabilities like quantum-resistant crypto and AI-powered fraud detection.

The pattern: Defense and sovereign infrastructure contracts are leading indicators. Commercial enterprises follow 6-12 months later with identical security requirements but larger volumes.

THE UNCOMFORTABLE TRUTH

Gen Digital CEO Vincent Pilette on the evolving threat landscape:

"Consumers today face a rapidly evolving threat landscape. They face a new generation of cyber threats like AI-powered phishing, deepfakes, inner circle impersonation and identity theft driven by large-scale data breaches. These threats are increasingly personalized, sophisticated and harder to detect. Cybercrimes against consumers are projected to exceed $15 billion annually in the U.S. alone, growing at double-digit rates."

Their AI-powered scam protection launched in 40+ languages. Identity and privacy products accelerated to double-digit growth.

What this means: Consumer security vendors are deploying AI at scale faster than enterprise vendors. They're shipping, iterating, capturing market share while enterprise vendors run pilots. When consumer products prove AI effectiveness at massive scale, enterprise buyers will ask why you're still in proof-of-concept mode.

ONE MORE THING

Infineon CEO Jochen Hanebeck: "Quantum computing is no longer a distant vision. It is becoming a reality."

Infineon shipped quantum processors and post-quantum cryptography certified chips to customers this quarter. In production. Not labs. Not pilots. Production deployments to data centers and defense installations.

Someone's selling quantum-ready security today. Someone's closing post-quantum crypto deals this quarter. Someone's winning federal contracts through AWS/Azure marketplaces with FedRAMP High accreditation.

Make sure it's you.

Forward this to your team → Make them the smartest people in Monday's pipeline review.