DoD C4ISR market revenue to benefit from COTS and IoT systems
MOUNTAIN VIEW, Calif. Analysts at Frost & Sullivan say they expect U.S. Department of Defense (DoD) command, control, communications, computers, intelligence, surveillance, and reconnaissance (C4ISR) spending to be flat through 2020 due to force structure reductions. However, activity and revenues should increase for the application of commercial off-the-shelf (COTS)-based computing, security, storage, networking, and collaboration tools. Internet of Things (IoT) systems along with cloud and big data technologies will be necessary to complement the adoption of COTS-based smart phones, tablets, wireless networks and productivity applications of all kinds.
The Department of Defense's (DoD’s) appetite for cloud computing virtualized ‘as a service’ enterprise networks will grow dramatically, despite lingering security concerns, Frost analysts say.
New analysis from Frost & Sullivan, US DoD C4ISR (http://bit.ly/1WMW9B2), According to a Frost analysis -- "US DoD C4ISR" a total of $39.54 billion has been earmarked for 2016 DoD programs for C4ISR, electronic warfare, and information operations as well as multipurpose technologies. This is an increase of 8.8 percent from 2015. The C4ISR spending will continue to grow at a compound annual growth rate (CAGR) of 1.4 percent during 2014 through 2020.
“Sharp procurement spikes without significant corresponding research reductions for ballistic missile defense, unmanned vehicles and satellites resulted in a substantial uptick in requested 2016 C4ISR spending,” says Brad Curran, Senior Industry Analyst for Frost & Sullivan Aerospace & Defense.
Combat systems integration, collaborative targeting and improved surface ship self-defense are priorities for the U.S. DoD through 2020, according to Frost. Its focus will be on these areas as well as moderately priced mature technologies and proven services.
“With C4ISR products and services likely to experience price and technology upgrade pressure from the commercial process control, imagery, IT as well as energy and power industries, market participants must quickly revise their strategies for success,” Curran says. “Additionally, adequate emphasis on maintenance, spares, logistics and training services will be essential for new sales.”
In 2014, the top 10 firms held 40.9 percent of U.S. DoD C4ISR contract value. Their growth rates and margins going forward will depend on the extent to which they adapt to emerging market requirements.
For more analysis from Brad Curran and Frost & Sullivan, read: