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Dynamics Driving Defense IT Priorities and Strategies

Published: December 28, 2021

Federal Market AnalysisArtificial Intelligence/Machine LearningBig DataBudgetCloud ComputingCybersecurityDEFENSEMobilityNational Defense Authorization ActPolicy and Legislation

There are numerous factors shaping the Department of Defense's information technology (IT) environment, priorities and key investment areas.

Work transforming the Department of Defense’s (DOD) IT environment is proceeding at a rapid pace, with DOD introducing 5G, Internet of Things, artificial intelligence, cloud computing and other modern commercial solutions to the landscape. Cybersecurity continues to hold a central position among DOD priorities, with established endeavors and in-flight modernization efforts meeting new cybersecurity requirements and provisions in the Final 2022 National Defense Authorization Act.

After three years of delays related to the now-canceled Joint Enterprise Defense Infrastructure (JEDI), the DOD’s shift to a new multi-cloud infrastructure is just getting underway. This initiative will be foundational for the DOD by increasing remote capabilities and paving a path toward the enterprise deployment of cybersecurity and artificial intelligence capabilities. Cloud computing will also support the DOD’s new Multi-Domain Operations concept that combines kinetic warfare with cyber capabilities and information dominance initiatives.

Meanwhile, increased flexibility in acquisition authorities is providing ways to introduce commercial technologies at an unprecedented rate as prototypes are developed that can transition into permanent solutions as required.

In our recent analysis report, Defense IT Priorities and Strategies, 2021-2023, we examine the policy and other factors shaping the DOD’s procurement of information technology goods and services.

Key findings in our analysis include:

  • Defense IT Budgets Likely to Rise. Near-term defense IT budgets will likely rise due to DOD's strategy to use commercial technologies for game-changing capabilities, as well as the IT investment required to enable Multi-Domain Operations.
  • Emphasis on Commercial Technologies. The FY 2022 National Defense Authorization Act contains significant emphasis on pushing the DOD to leverage commercial technologies to speed time to capability deployment.
  • CMMC 2.0 Brings Clarity. By reducing administrative and cost burdens as well as third-party assessments, DOD's CMMC 2.0 reboot will likely alleviate some of industry’s confusion and concern about the impact of the new rules, particularly on small business.
  • Expanding OTA Oversight. Defense spending on prototypes procured using Other Transaction Agreements (OTAs) reached a new high in FY 2020. This has spurred increased scrutiny from Congress and the DOD Inspector General, which are both critical of DOD's tracking of spending on OTAs awarded through industry consortia.
  • Multi-Cloud as the New Normal. The growing reliance on cloud for overseas operations forced the realization among DOD’s leadership that the organization needs a multi-cloud environment supported by several commercial providers.
  • Multi-Domain Operations Require Standardized Data. Standardizing data formats across the DOD is now imperative as the department strives to leverage data for warfighting operations in the Joint All-Domain Command and Control (JADC2) construct.

These and other factors continue to influence DOD’s efforts to develop and deploy the technical capabilities required to support its varied mission as well as its IT modernization strategy.

To learn more about the major trends and drivers in the Defense IT market and get our recommendations for how solutions providers can maximize their market positioning to best take advantage of Defense business opportunities, read the full report: Defense IT Priorities and Strategies, 2021-2023.