The Silver Lining

Public spending cuts continue to limit military procurement opportunities for European and US companies. Those programmes which are approved tend to be smaller and run for shorter periods. This creates significant issues for both government and industry in terms of cost per unit and long term investment.

However, it is becoming apparent that, for fast moving suppliers, there is an upside to the traditional military procurement cycle being broken, and this applies whether they are IP-rich or COTS-based, and whether they are traditionally defence-focused or a new market entry / making the cross-over from another sector.

The shortening timescale is actually allowing militaries more rapidly to acquire new non-military technologies and adapt them to military use. Taking COTS-type technology platforms and combining them with military IP and standards can reduce development and procurement costs and allow the regular updates so often demanded by soldiers on the ground but so often prohibitively expensive to re-engineer.

Unsurprisingly, at the front of this wave of accelerated technologies are mobile devices. We all know the stories about soldiers theoretically having three or four comms platforms available during an incident but having had to rely on their personal mobile to relay information or call in support.

Historically that has been the limit of mobile use in theatre and they have been disregarded for issues of network integrity. However, the last 12 months has seen the US military take major steps in trialling use of mobile devices (iPhone and Samsung EVO) and bespoke apps as a way to deliver training and information to troops. Work is also underway to deliver flexible and rapid secure operational support apps that can relay real-time information via voice, picture and video to and from soldiers in the field.

Where mobile leads we expect vehicle and soldier systems will need to follow, adapting platforms to allow for easier and more frequent technology and systems upgrades, with a shift in the balance of soldier capability from hardware to software aping the journey of computers and mobile devices.

From an M&A and competitive perspective, we expect new entries into military communications from the wider mobile space, where persistent capability enhancement is the norm and increasing interest from acquirers in capturing this capability, which will be disruptive to the traditional model.

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