Technavio has forecasted that global defense information technology spending will reach $108.4 billion by 2020 as continued demand for IT and technology offerings in the defense industry drive the need for technological support services.
The company said Friday the market will see a compound annual growth rate of at least three percent over the forecast period.
IT investments will work to support the defense sector’s business processes, mission systems, logistics, operations, IT modernization and intelligence information analysis, Technavio added.
The technology research firm said in its latest report that the IT services segment accounted for 48 percent of the market in 2015 and is predicted to further grow as demand for low-cost IT services increases along with the emergence of new technology such as cloud computing.
“Digital revolution in the defense industry is also creating demand for IT services to support the digital programs implemented in military forces,” added Amit Sharma, a Technavio IT spending analyst.
Sharma noted that IT consulting and support function services such as network support and database maintenance will generate revenue in the market segment.
Technavio added the hardware segment had a market share of more than 37 percent and is forecasted to continue its growth as the demand for data centers, servers and storage technologies increases, particularly in developing countries such as India.
Sharma said information and communications technology infrastructure demand is a major factor in the growth of the market segment amid rapid adoption of communication systems such as software-defined radio.
Finally, Technavio said the IT software segment posted one of the fastest-growing segments with a 15-percent market share and is expected to continue growth amid demand for software such as supply chain management systems to support military operations.
Technavio also highlighted Accenture, Computer Sciences Corp., Dell, Hewlett Packard and IBM in its report as IT vendors to the defense market.