PUBLISHER: Orion Market Research | PRODUCT CODE: 1778447
PUBLISHER: Orion Market Research | PRODUCT CODE: 1778447
C5ISR Market Size, Share & Trends Analysis Report by Solution (Hardware, Software, and Services), by End User (Army, Navy, Air Force, and Government and Law Enforcement), and by Installation (New Installations, and Upgrades) Forecast Period (2025-2035)
Industry Overview
C5ISR market is projected to reach $43,459 million by 2035, from $10,720 million in 2024, at a CAGR of 13.7% during the forecast period (2025-2035). Modernization of the defense infrastructure, including C5ISR systems, is driven by the need for real-time information, integration with artificial intelligence, satellite and communication infrastructure, cybersecurity threats, the rise of unmanned systems, interoperability, and network-centric warfare. Government programs and partnerships are further being initiated to enhance defense technology and infrastructure.
Market Dynamics
Increasing Military Modernization
International defense expenditures are rising, mainly aimed at modernizing hardware and logistics support for enhanced readiness and operational capabilities in the field, which boosts the market growth. For instance, in April 2024, Leidos, awarded a follow-on prime contract to provide technology-enabled services to the US Army. This indefinite delivery/indefinite quantity (IDIQ) task order, known as Responsive Strategic Sourcing for Services (RS3), carries an 11-month base period and potentially a total value of $267 million in the event all four one-year options are exercised. The work involved includes hardware capability evaluations, hardware configuration and upgrades, and warehousing and warranty repair logistics, with the work managed by the Army Contracting Command-Aberdeen Proving Ground.
Technological Advancements
Advancements in sensor technology, artificial intelligence, and data analytics have helped enhance the efficiency and effectiveness of C5ISR systems, boosting market growth. For instance, in February 2024, QinetiQ US awarded a $42 million task order to aid the US Army Combat Capabilities Development Command's C5ISR Center's Research & Technology Integration Directorate. The order of tasks is to build intelligent sensor processing and next-generation imaging capabilities, such as Aided Target Recognition, signal and image processing algorithms, and software applications.
Market Segmentation
Software Segment to Lead the Market with the Largest Share
Software in the C5ISR market enhances situational awareness, decision-making, and coordination among military and defense units by automating and integrating C5ISR systems. The C5ISR market uses real-time data collection, processing, and dissemination software in defense and intelligence operations, enabling secure communication, automated threat detection, encryption, intrusion detection, vulnerability management, and AI-powered signal intelligence. Furthermore, software plays a crucial role in modernizing C5ISR systems, enhancing interoperability, and automating decision-making, providing cybersecurity, improving situational awareness, and predicting equipment failures. It additionally enhances cost efficiency and scalability, allowing for upgrades without extensive hardware changes, reducing human error, and accelerating decision-making.
Army: A Key Segment in Market Growth
The market growth is primarily driven by the need for robust C5ISR solutions to safeguard essential military infrastructures against advanced cyber threats. For instance, in February 2024, CACI International secured a $198 million contract to support the US Army DEVCOM Combat Capabilities Development Command C5ISR Center, aiming to enhance cyber defense capabilities over five years, leveraging artificial intelligence, quantum effects, and robotics.
The global C5ISR market is further divided by geography, including North America (the US and Canada), Asia-Pacific (India, China, Japan, South Korea, Australia and New Zealand, ASEAN Countries, and the Rest of Asia-Pacific), Europe (the UK, Germany, France, Italy, Spain, Russia, and the Rest of Europe), and the Rest of the World (the Middle East & Africa, and Latin America).
Technological Advancements in Asia-Pacific
The integration of 5G, AI, and electronic warfare technologies is revolutionizing the capabilities of C5ISR systems that can process information quickly, have enhanced situational awareness, and make improved decisions in changing operating environments. The growth in the market is being fueled by improving ISR operations in terms of efficiency and accuracy. For instance, in June 2023, Kratos expanded its Global Space Domain Awareness Network, including new India capabilities. The network monitors space-based radio frequency signals to measure satellites' position, maneuvering, health, and proximity. More than 140 sensors and antennas outfitted the device to accurately track and sense space vehicles in the GEO belt with real-time sensing.
North America Region Dominates the Market with Major Share
North America holds a significant share, owing to the US Department of Defense integrating advanced technologies such as AI and cyber defenses into C5ISR systems to maintain a technological edge and drive market growth. For instance, in December 2024, Viasat received a five-year, sole-source Indefinite Delivery/Indefinite Quantity (IDIQ) contract valued at $568 million by the US General Services Administration (GSA). The contract facilitated the accelerated transition of command, control, communications, computers, combat systems, intelligence, surveillance, and reconnaissance (C5ISR) capabilities from Special Operations Forces (SOF) to General Purpose Forces (GPF). Viasat continued to provide a wide range of technologies and services to enhance communications, security, intelligence, and operations for SOF and GPF warfighters.
The major companies operating in the global C5ISR market include Airbus, BAE Systems, plc, L3Harris Technologies, Inc., Northrop Grumman, and Thales S.A., among others. Market players are leveraging partnerships, collaborations, mergers, and acquisition strategies for business expansion and innovative product development to maintain their market positioning.
Recent Developments