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The global C5ISR market size was USD 113.44 billion in 2018 and is projected to reach USD 147.97 billion by 2026, exhibiting a CAGR of 3.38% during the forecast period (2019–2026).
C5ISR stands for command, control, communications, computers, cyber, intelligence, surveillance and reconnaissance. It plays a crucial role in military operations and combat missions, providing real-time information to the soldiers to take the required decisions on the battlefield. Moreover, the rise in border security threats, increasing political conflicts, and migration issues have forced governments across the globe to focus on extensive defense modernization programs. These systems have evolved from the C4ISR market, which stands for command, control, communications, computers, intelligence, surveillance, and reconnaissance. Growing demand for space-based C5ISR systems and increasing demand for Artificial Intelligence (AI) in C5ISR systems for military operations are expected to create opportunities for the C5ISR market growth. Whereas, high initial costs involved in the design, development and maintenance of C5ISR systems and components, and issues related to maintenance of these systems and interoperability are expected to hamper the overall growth of the market.
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Technological Advancement in the Battlefield Management Systems (BMS) to Fuel the Market
BMS is a highly portable tactical control and command information system and is expected to drive the C5ISR market trends. It is integrated with highly reliable decision-making tools, weapon platforms, systems and advanced sensors. Systems comprise of hand-held or wearable information systems for individual commander or soldier and vehicle-mounted information system for land-based operations. These are combined with data-enabled communication networks. BMS comprises of several platforms such as air, land, and naval. BMS consists of different subsystems, including database server, networking system and infrastructure-less communication, application server, compute platforms, relational database management system, and GPS embedded systems. The technologically advanced systems used in BMS are part of the C5ISR platform as they are connected with the internet and communication systems.
Growing Demand for Situational Awareness in Military Operations to Boost the Market
During combat missions, situational awareness refers to the ability of decision-makers to process, identify, and analyze critical systems of information about the battlefield scenario. It is thus a crucial factor in air, naval, and land-based operations. Advanced technologies, such as autonomous and robotics platforms provide air, ground, and maritime solutions with advanced C5ISR capabilities to ensure access to the real-time database. High-bandwidth sensor processing, secure network routers, video management systems, and switches play a key role in decision making during any battlefield operation. These systems assist in handling, displaying, storing, and providing crucial information related to the flight, mission, and sensor data, which improves the effectiveness of the complete decision-making process in military operations. Therefore, C5ISR systems help in generating real-time data, which allows optimizing the efficiency of the soldiers during any operation.
Increase in the Adoption of Software Defined Radio in C5ISR Systems to Aid Growth
Commercial wireless network standards are continuously changing, from 2G/3G to 4G and now the adoption of 5G-equipped systems. These changes cause problems for wireless network operators and equipment vendors, as users are forced to use the new system whenever a new generation of network standards is deployed. Whereas, wireless network operators face various issues during the migration of the network from one generation to next due to the presence of a large number of users. Every time a new standard and norms are introduced in the market, military personnel are supposed to upgrade the conventional system. However, the integration of software-defined radio (SDR) chip in C5ISR army equipment can fix this problem of migration, as only software upgrades will be enough to migrate to the new network. Thus, advanced communication equipment will drive market growth during the forecast period.
High Initial Costs C5ISR Systems and Components to Hinder Growth
C5ISR systems simplify the process of modern-day warfare. However, huge costs are involved in the design, development, and implementation of these systems into the defense capabilities of any country. They require a combination of various air defense systems, command and control (C2) systems, and ISR systems, among others. The Installation, development, launch, and maintenance of these critical systems and components are very costly. Therefore, both the cost and time required for the development and deployment of these systems prove to be a hindrance to the growth of the C5ISR market across the globe.
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High Demand for Advanced Aircraft and Unmanned Aerial Systems Propel the growth of Airborne Segment
Based on type, the market is classified into land, naval, airborne, and space. The airborne segment is anticipated to grow at the fastest CAGR during the forecast period. Increasing demand for border surveillance by aircraft and unmanned aerial vehicles are the major factors behind the growth of this segment. Whereas, the naval segment was the largest in 2018, owing to the huge investment in naval modernization programs by countries such as the U.S., China, and India.
Increase in Demand for Modern Warfare Systems Boost the Growth of the Market
Based on application, the C5ISR market is segmented into electronic warfare, surveillance and reconnaissance, intelligence, command and control. Among these, the command and control segment is expected to be the fastest-growing segment in the market during the forecast period. This growth is attributed to the increasing demand for modern military warfare across the globe and high demand for Internet of Things (IoT)-based systems and equipment, whereas the surveillance and reconnaissance segment was the largest segment in 2018.
Increase in Demand for Customization in C5ISR Services to Boost the Market
Based on the solution segment, the market is divided into products and services. Among these, the services segment is expected to be the fastest-growing segment of the market during the forecast period. This growth is accredited to the increasing demand for installation of advanced systems in the naval and airborne domain, demand for customization of the systems across the globe and high demand for internet of things (IoT) based systems and equipment. In contrast, the product segment was the largest in 2018.
North America C5ISR Market Size, 2018 (USD Billion)
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The findings based on research methodology estimate that North America is estimated to hold the largest share of USD 65.80 billion in 2018. The U.S. is significantly increased spending on modernizing its naval, land, and airborne systems in recent years. Besides, the presence of key manufacturers such as Northrop Grumman Corporation, Raytheon Company, and Lockheed Martin Corporation is driving the market growth in the U.S. In the case of Canada, rising adoption of C5ISR centers by the Canadian Army is boosting the market growth in the region.
Europe held the second-largest market share in 2018 owing to the high investment in the upgrading of conventional command and control systems and the presence of major C5ISR system manufacturers in this region, such as BAE Systems and Thales Group.
As per our research, Asia-Pacific is expected to witness strong growth in the market during the forecast period owing to the significant rise in military spending in countries such as India, Japan and China. The APAC region is expected to witness long-term growth in this market.
Furthermore, the market in the Middle East and Africa is anticipated to increase at a significant CAGR, owing to the significant number of suppliers and distributors of military systems in this region. Similarly, increasing investment in the modernization of naval and airborne systems in the region is expected to drive the market in the Middle East and Africa.
Technologically Advanced Products and Acquisition Strategies to Propel the Market
The competition landscape of the C5ISR market depicts the domination of selected players such as Thales Group, Lockheed Martin Corporation, and BAE Systems, among others. A diversified product portfolio of advanced solutions, along with increased investment in R&D and strategic acquisition, are prominent factors responsible for the dominance of these companies in the market. These companies are adopting organic and inorganic growth strategies such as long term partnerships, mergers and acquisitions, and new product launches.
The C5ISR market report offers qualitative and quantitative insights on the market and detailed analysis of market size & growth rate for the segments in the market.
An Infographic Representation of C5ISR Market
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Along with this, the report provides an elaborative analysis of market dynamics, emerging trends, and competitive landscape. Key insights offered in the report are the adoption of advanced technology, recent industry developments such as partnerships, mergers & acquisitions, consolidated SWOT analysis of key players, Porter’s five forces analysis, business strategies of leading market players, and macro and micro-economic indicators.
Value (USD Billion)
In 2018, the market was USD 113.44 billion, and it is anticipated to reach USD 147.97 billion by 2026, growing at a CAGR of 3.38% during the forecast period (2019-2026).
In the market, airborne and product segments are the leading segments supporting the growth.
Some of the driving factors for the market are increased requirement for situational awareness in military operations and the growing adoption of a software-defined radio in these systems.
In the market, some of the key players are Lockheed Martin Corporation, General Dynamics Corporation, BAE Systems, Northrop Grumman Corporation, SAAB AB, L3Harris Technologies Inc., Collins Aerospace, CACI International Inc., Elbit Systems Ltd., and Thales Group.
In the market, the OEMs are mainly focusing on establishing a strong supply chain network in high growth regions such as Asia-Pacific followed by the other regions. They are also involved in acquisitions and technological collaborations to strengthen their market position. Additionally, they are heavily investing in R&D for designing lightweight, durable, and cost-effective C5ISR systems and subsystems.
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