Combat Management System Market Size, Share & COVID-19 Impact Analysis, By Component Type (Software and Hardware), By Sub-system (Self-defense Management System, Situational Awareness System, Track Management System, Weapon Management System, Display System, Identification System, and Unmanned Vehicle Control System), By Platform (Destroyer, Submarine, Frigate, Amphibious Ship, Corvette, Fast Attack Craft (FAC), and Aircraft Carrier), and Regional Forecast, 2021-2028

The global combat management system market size was USD 755.8 million in 2020. The market is projected to grow from USD 804.9 million in 2021 to USD 1,249.86 million in 2028 at a CAGR of 6.49% during the 2021-2028 period. The global impact of COVID-19 has been unprecedented and staggering, with combat management system witnessing a negative impact on demand across all regions amid the pandemic. Based on our analysis, the global market exhibited a growth of 6.5% in 2020 as compared to the average year-on-year growth during 2017-2019. The rise in CAGR is attributable to this market's demand and growth, returning to pre-pandemic levels once the pandemic is over.  

The digitalization of naval systems and sub-systems, along with significant technological advancements in naval combat systems, is influencing the emphasis of OEMs on the market. Other factors, such as digital diversification assisted surface combatants and the evolution of various CMS-enabled hardware and services, are propelling the market growth. With the high demand for network-centric warfare capabilities by blue water navy and increased emphasis on interoperability within multiple partner navies, combat systems providers have focused on creating an enhanced user experience for the future.

The significance of interoperability of various combat management systems and adoption of unmanned vehicles, such as UUVs (Unmanned Underwater Vehicles) and UAVs (Unmanned Aerial Vehicles), by various navies worldwide are the factors influencing the market growth during the forecast period. Also, most of the navies' vast utilization of sub-systems across the surface combatant fleet is predicted to influence the market growth. These developments are predicted to drive the market growth during the forecast period, which will help to grasp the traction for enhanced naval user experience.

Maritime Combat Management Systems (MCMS) continue to advance toward delivering a dynamic work program for its users, which is the main factor in the operational capabilities of the surface warships in the ever-evolving naval battlespace. The utilization of open architectures has brought the agile deliverance of critical mission systems to the front-line surface warships as they operate in more complex operational requirements.

The principal use of combat systems was introduced and designed for military applications to allow the precision target delivery, situational awareness, critical mission systems, and other shipborne systems to achieve the highest accuracy in crucial combat operations. These key developments are anticipated to stimulate demand and market growth for combat management systems in the forthcoming years.

COVID-19 IMPACT

Moderate COVID-19 Impact on Market Growth Owing to Demand for CMS Worldwide

The ongoing COVID-19 pandemic has majorly impacted various industries. All major regions have significantly impacted various industrial operations. The global market is anticipated to grow at a significant growth rate despite the pandemic. The sensitivity and growth of the global market can be defined through the following details:

• As per the UNCTAD (United Nations Conference on Trade and Development) report 2020, the ongoing COVID-19 pandemic has significantly impacted global trade, causing 3% drop. The disruption of the critical components and equipment supply chain for naval production has led to this impact in 2020.


• As per Naval Technology, analysis of the survey amongst Naval OEMs and suppliers, 52% validated a significant impact, while 33% anticipate a minor effect on the market. The remaining respondents have not witnessed any impact on the naval development budget.


• Naval development budgets have been propelled to increase in Southeast Asia amid simmering tensions due to the maritime border disputes. In contrast, defense expenditures of most countries in the region.

LATEST TRENDS

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Development in Intelligent Combat Management System Solutions to Create Significant Growth Opportunities

The advent of virtualization, artificial intelligence (AI)-based combat systems, naval fleet modernization, integrated naval combat mission system management, naval combat sub-system automation functions is key factors propelling the demand for next-generation intelligent combat systems. The implementation of combat system virtualization is to aggregate mission computers and consoles in the physical server, increasing energy, work efficiencies, and flexibility.  

The next-generation systems have digital interfaces of sub-systems and a high degree of in-built intelligence. For instance, in February 2020, the Australian Department of Defense Saab Australia signed an enterprise partnering agreement to supply next-generation combat systems. The future CMS will be delivered, fitted, and tested on the Royal Australian Navy fleets such as ANZAC-class frigates, Arafura-class offshore patrol ships, mine countermeasures ships, military survey vessels, and Supply-class replenishment ships. Saab Australia is anticipated to enhance the capability of its next-generation combat systems with possible interfacing with the AEGIS system for the Hunter-class frigates and Hobart-class destroyers. Such developments will generate plenty of opportunities for the combat management system market growth.

High Demand for Enhanced Situational Awareness to Boost Market Growth

With dynamic operational requirements for operating in the contemporary naval battlefield, the demand for enhanced situational awareness is imminent. The surface combatants will need to meet functional requirements such as precise & quick data transmission, advanced surveillance systems, integrated command and control systems, and others. These factors are anticipated to create opportunities for market growth during the forecast period.  

DRIVING FACTORS

Steady Rise in Military Expenditure to Propel Market Growth

Consistent increment in military expenditure by emerging and developed countries to meet the ever-evolving and complex maritime operational requirements are the major factors influencing the global market growth during the forecast period. Generally, the economic progress of a country usually leads to an increment in defense spending in the respective fiscal year. The Stockholm International Peace Research Institute (SIPRI) validates the nature of military expenditure with respect to economic progress through its recent study. According to SIPRI Yearbook 2021, the global military expenditure progressed to USD 1,981 billion in 2020, 2.6% higher than that of 2019 and 9.3% higher than the military expenditure in 2011. The global military spending thrust over the world's Gross Domestic Product (GDP) increased by 0.2% points to 2.4% in 2020. It has been the highest ever growth in military expenditure since the 2009 global economic crisis.

Growing Adoption of Anti-Surface & Sub-surface Warfare (ASuW) Capabilities in Various Surface Ships to Influence Market Growth

The high adoption rate of anti-surface warfare by the navies worldwide is anticipated to facilitate the measurement of precise real-time positioning information for target acquisition and threat perception. This information is crucial in various applications such as area denial operations, search and rescue, counter-piracy missions, freedom of navigation operations, and military combat missions. Moreover, the advanced combat systems can allow an unmanned vehicle to perform effectively with an extended range.

As per the Diplomat Magazine, China's increasing belligerence in the Asia Pacific Naval Theatre claims the entire South and East China Seas and its area denial system for vessels passing through those seas. The other contender countries are threatened with the ever-growing People's Liberation Army Navy (PLA(N)) fleet of surface and sub-surface vessels. The rising maritime PLA(N) fleet of submarines and surface combatants has led to an arms race with India to produce anti-submarine warfare capabilities and increased emphasis on fleet management and interoperability. These factors are anticipated to propel the market growth of this market during the forecast period.

RESTRAINING FACTORS

High Initial Cost of Combat Systems Components and Implementation to Hamper Market Growth

The combat management system requires various components to deliver critical mission systems to the end-user. Therefore, to increase interoperability and fleet management, more naval CMSs are needed. However, high costs associated with the design or customization of CMS across the range of naval platforms are anticipated to hamper the market growth.

Growing Need to Protect combat systems from Cyber Attacks is a Major Challenge for Market Development

The conflicts and skirmishes among neighboring countries are increasing with rapid economic progress. The constant conflicts and growing geopolitical tension has altered the nature of war from conventional to cyberspace. The risk of cyber-attacks poses an imminent threat to the CMS's naval self-defense and situational awareness capabilities. Therefore, protecting the global naval capabilities from cyber threats, such as jamming and spoofing, is a significant challenge to the CMS market. This challenge can be resolved by using anti-jamming and anti-spoofing products and solutions that help to protect the combat systems from cyber threats.

SEGMENTATION

By Component Type Analysis

High Software Upgrade and Customization Demand Due to Critical System Replacement or Integration to Propel Market Growth

Based on type, the market segments include software and hardware. The hardware segment is classified into control consoles, combat data centers, and data network switchers. The software segment is anticipated to hold market dominance owing to the higher developmental cost involved in the software and complex combat systems architecture. The market has witnessed a high demand for CMS architectural customization due to integrating newer sub-systems and increased focus on network-centric warfare. The hardware segment is expected to grow over the forecast period due to increased defense expenditure and naval production.

By Sub-System Analysis

Unmanned Vehicle Control System Segment to Boost Market Growth at Highest Growth Rate

Based on the sub-system, the market is segmented into track management system, self-defense management system, situational awareness system, weapon management system, display system, identification system, and unmanned vehicle control system. The unmanned vehicle control system is evaluated to grow at the highest CAGR in 2020 and is anticipated to rise at the higher CAGR during the forecast period. The growth is attributed to enhanced combat capabilities provided by the utilization and adoption of unmanned vehicles such as UUVs, UGVs, and UAS.

The self-defense management system segment is expected to witness a significant growth rate in the global market due to the rapidly increasing procurement of advanced weapons worldwide. The situational awareness system segment is projected to show a notable growth rate in this market due to the high demand for enhanced situational awareness. The track management system segment is anticipated to grow at a significant growth rate in the global market as track management systems integrate track structure data, inspect to assist seaways and check maintenance & accuracy. Other segments are anticipated to grow at a significantly moderate or slower growth rate during the forecast period.

By Platform Analysis

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Corvette Segment to Dominate Market Share Owing to Higher Production Rate

The global market is divided into destroyer, submarine, frigate, amphibious ship, corvette, fast attack craft (FAC), and aircraft carrier. The corvette segment held the largest market share in 2020. The growth is attributed to a higher delivery rate amongst surface combatants, an increase in the deliveries of the corvettes to the navies worldwide, and extensive utilization by blue as well as green water navies worldwide. Naval forces worldwide are focusing on the interoperability between naval systems and surface & sub-surface combatants, adoption of network-centric warfare, and anti-surface warfare across the globe by varying naval forces.

The submarine segment is anticipated to grow during the forecast period attributed to the second-largest delivery across naval vessels. Rising submarine fleet across the globe and fleet modernization of submarines from conventional diesel-electric to nuclear-powered submarines are factors influencing the growth of the submarine segment. The destroyer, frigate, amphibious ship, fast attack craft (FAC), and aircraft carrier are anticipated to grow significantly due to variable delivery time and modernization programs by the naval forces or defense agencies worldwide.

REGIONAL INSIGHTS

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By region, the combat management system market is divided into North America, Europe, Asia Pacific, the Middle East, and the Rest of the World. North America is evaluated to expand at a significant CAGR during the forecast period. The region's market dominance is attributable to higher military spending than the Rest of the World, the U.S. Navy's operational requirement for interoperability, enhanced situational awareness, and fleet modernization. OEMs such as Lockheed Martin Corporation, Northrop Grumman Corporation, and others are anticipated to drive the market growth in the region, owing to robust naval production and R&D structure.

The Europe market is expected to grow at a moderate CAGR due to the strong presence of OEMs and other critical component manufacturers such as Thales Group, Kongsberg Gruppen ASA, BAE Systems PLC, and among others. The significant growth by the manufacturers’ revenue is expected to drive strong market growth in naval production and in this market. 

The Asia Pacific combat management systems market is estimated to be the fastest-growing by CAGR during the forecast period. China, Japan, India, Australia, and Southeast Asia support the primary revenue growth. The significant growth in China has been attributed to the increment in defense expenditure to USD 281.1 billion in 2021 despite the ongoing pandemic. India has a substantial development and growth in naval and shipbuilding self-reliance in naval production for the country and defense partners or allies. Furthermore, another factor influencing the market growth is the rise in maritime disputes despite the International Court of Justice's order to maintain and implement international navigation freedom. This development has led to an increment in the defense budgets for naval production and critical naval systems.

The Rest of the World is estimated to have a lower market share due to a hugely under-penetrated market. Meanwhile, the adoption of CMS in Israel, Saudi Arabia, Turkey, and Egypt is anticipated to boost the market growth for the Middle East.

KEY INDUSTRY PLAYERS

Robust Portfolio Propelled Thales Group, BAE Systems, and Lockheed Martin to Lead Global Market

This market is fragmented due to the robust product portfolio and goodwill of significant companies in developed and emerging economies. However, high entry barriers will impact domestic players entering the global market and a highly fragmented market by 2028. The market has various manufacturers or OEMs operating worldwide. The key market players are Thales Group, Elbit Systems, Lockheed Martin, BAE Systems, and Leonardo DRS. Other key vendors include SAAB AB, Kongsberg Gruppen ASA, Terma AS, L&T Defense, and Atlas Elektronik GmbH. These companies have a strong presence in their products and services. Innovative next-generation products, complete life-cycle services, software advancements, strategic mergers & acquisitions, partnerships, and collaborations are key market strategies adopted by OEMs in the global market.  

LIST OF KEY COMPANIES PROFILED:

• BAE Systems PLC (U.K.)


• Elbit Systems Ltd. (Israel)


• Kongsberg Gruppen ASA (Norway)


• Leonardo S.p.A. (Italy)


• Lockheed Martin Corporation (U.S.)


• The Raytheon Company (U.S.)


• Saab AB (Sweden)


• Thales Group (France)


• Israel Aerospace Industries Ltd (Israel)


• Northrop Grumman Corporation (U.S.)


• Terma AS (Denmark)


• L&T Defense Ltd. (India)


• Hanwha Systems Co., Ltd (South Korea)


• Bharat Electronics Limited (BEL) (India)


• ATLAS ELEKTRONIK GmbH (Germany)


• ASELSAN AS (Turkey)

KEY INDUSTRY DEVELOPMENTS:

• August 2021 – Saab AB was awarded a contract worth USD 535 million by BAAINBw (the German Federal Office of Bundeswehr Equipment, Information Technology, and In-Service Support) to integrate fire control naval radars within the German Navy's Bradenburg Class Frigates (F123). The contract involves integrating a new CMS to ease the risk involved in integrating fire control and naval radar capabilities.

• March 2021 – Lockheed Martin was selected for a one-year contract worth USD 93.2 million as a part of contract modification for the maintenance of the component-based Total Ship System of the US Navy's Freedom Class Littoral Combat Vessel. The contract also covers the testing and integration of COMBATSS-21.

REPORT COVERAGE

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The global combat management system market research report facilitates an in-depth industry analysis of this market. It emphasizes key aspects such as leading market players, OEMs, solutions offerings, critical system hardware, and applications of CMS product & services. Besides this, the report offers insights into the combat management technology trends and highlights key industry developments. Additionally, the report consists of various factors that have contributed to the growth of the next-generation market in recent years.

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