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Decoding opportunities

Decoding Opportunities for Service Providers in the Defense Sector

The import ban on defense items announced by India’s Defense Minister has opened up a highly-rewarding area for indigenous service providers. This move is being replicated by other world governments to nurture their country’s startup ecosystem. 

Defense imports are a huge part of a nation’s import bill. Often, defense takes priority over other basic citizen needs. This is detrimental to not just the defense sectors but is discouraging to the budding startup pool as well. With self-reliance becoming a key agenda, nations are now opening the military-industrial complex for small/medium service providers too.  

But what exactly are the opportunities available for digital service providers in this sector? 

There is no doubt that the future of defense lies in digitalization with cutting edge technologies like AI, ML, Advanced Analytics, UAV, IoT, etc.  

Broadly, we can classify the digitization of the Defense and Intelligence Sector into three buckets: 

  • Leveraging AI, computer vision, and digital solutions to develop intelligent systems, vehicles, and weapons 
  • Offer virtual reality and intelligent assessment solutions to enhance the soldier effectiveness 
  • Deploying smart solutions to enhance productivity, reduce the downtime and ensure seamless connectivity 

Larger companies like Raytheon, Northrop Grumman & Boeing are already offering end-to-end solutions in the areas of defense communications, surveillance, and maintenance.  

Removing Roadblocks To Defense Privatization 

Before we examine the opportunities, it is useful to gain an overview of the roadblocks, past & present. 

Even with countries with a large startup base like the UK & India, very few of them, if any, are actively supporting the defense sector.  

Complex defense licensing procedures, a steep learning curve & a lack of immediate returns have generally kept startups at bay. Defense stakeholders have taken note of these issues and are rolling out a slew of steps to level the playing field for private players.  

In India, the Technology Development Fund set up under the initiative aims to promote self-reliance in the defense sector.  

The results are already visible on the ground. 

Tech Mahindra has signed a contract worth INR 300 crores for facilitating the digital transformation of the Indian Navy. Under the contract, Tech Mahindra will implement a microprocessor-based Access Control System across all naval bases and ships. 

Tata Advanced Systems has recently invested talent in developing software for UAVs (drones). The global drone services market is expected to reach $92.52 billion by 2026, and the defense sector is one of the major buyers for these drones. 

HCL has deployed the world’s largest VOIP network connecting all IAF stations and captive mobile network, providing secure data voice video connectivity to mobile entities of IAF. In addition to this, HCL is also a key partner in surveillance and security systems with their Video Analytics & Intelligent Security Systems.  

A similar movement can be seen in other countries like Brazil & Argentina too. 

Presently, infrastructure security & preventing bad actors from accessing state secrets are major pain points holding back startups. 

Defense Opportunities for Service Providers 

Startups have a plethora of opportunities to partner with governments or even tier-1 service providers to get a piece of the defense cake. 

 Key areas in defense where digital transformation is ramping up include: 

Warfare Systems 

  • Autonomous Weapons: Defense stakeholders are trying to make weapons more intelligent through state-of-the-art technologies
  • Intelligent Systems: AI and computer vision are enabling warfare systems to become more independent and smarter to reduce the need for human intervention
  • Smart Mobility: The Defense Organizations across the globe are accelerating the development of autonomous vehicles to reduce the risk for soldiers and to enhance their safety

Warfare operations  

  • Intelligent Battle Planning: AI and ML-based simulations are frequently relied upon by organizations to assess battlegrounds and provide logistical/tactical assistance in real-time
  • Smart Battle Force: Organizations are using AR and VR capabilities and wearables, to track and coach the army and help them perform more efficiently in the battle 

Service & Maintenance 

  • Connected Service and Maintenance: Technologies such as IoT, AI, and AR & VR are enabling the use cases such as Virtual Inspection, Weapons Monitoring and Aircraft Health Monitoring

Weapons monitoring, Predictive Maintenance, AI-enabled cyber threat monitoring, and unmanned vehicles are key areas of focus for startups to deliver solutions.  

Emerging areas in defense where some startups have already found success are: 

  • Medical simulation – MedCognition 
  • Drone detection – Fortem Technologies 
  • Virtual training & Simulation – WorldViz 
  • Asset maintenance – AiNDRA 
  • Threat detection – CRON systems 

Leveraging AI, IoT & ML, and other cutting-edge digital solutions, service providers can win huge deals from world governments.  

This requires service providers to stay on top of the defense industry pulse and actively look for sales enablement opportunities.  

Draup for Sales features a proprietary Signals Cast dashboard curated with real-time signals from industry movements. Enterprises get live updates on strategic or tactical signals within their industry tagged across various categories like Deal Renewal, Executive Movement, Patents & Product Launches. 

The success of defense digitization depends upon the ROI achieved by digitalizing/automating specific use-cases in the organization. Our hierarchical ROI ROI model follows the hierarchy of Digital Tech Stack –> Digital Intentions –> Use Cases –> Customer Scenarios –> Workflow –> KPIs –> ROI.  

Exploring use cases with this model enables digital service providers to identify the right opportunity at the right time.