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Key questions about cloud in the defence industry: Q&A with GlobalData thematic analyst

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Francesca Gregory has a background studying environmental, social and governance (ESG) as well as the impact of technology on society. Since joining GlobalData, she has built expertise across technology themes such as augmented reality, cybersecurity, robotics, and cloud computing, and has experience relating these technologies to the energy and defence sector.

Lara Virrey: What are the biggest challenges facing defence industry companies today? 

Francesca Gregory: Given the competing priorities of governmental funds, militaries must optimise their spending to provide security to the societies they serve and protect. Cost-effective spending will become increasingly important against the backdrop of a challenging macro-economic climate. Even major powers are not exempt from budget cuts that prevent them from procuring the full range of capabilities. At the same time, defence players must continue to develop their technological capabilities to keep up with their opposition.

Lara Virrey: How can cloud help defence industry companies address these challenges? 

Francesca Gregory: In a world where companies operating in the aerospace, defence and security (ADS) sector must deliver actionable insights from a rapidly growing volume of data, ready access to information has become a competitive advantage. Simply maintaining old IT architectures risks companies and militaries being outmanoeuvred by their opposition due to slow response times.  

Cloud computing has transformed the way that companies operating in the ADS sector consume IT resources. This technology has enabled shared IT infrastructure and services, which create a flexible, scalable, and on-demand IT environment. This approach is significantly more resource efficient and cost-effective than traditional IT, where companies had to invest heavily in on-premise IT infrastructure  

Lara Virrey: What are the main use cases for cloud computing in the defence industry?   

Francesca Gregory: Cloud computing is changing the way defence companies consume IT resources. A growing number of militaries have integrated cloud computing into their digital transformation strategies. Cloud computing is chiefly used to dismantle data silos within defence companies and organisations by migrating applications to a shared IT environment.  

While recruitment applications were among the first to be migrated, cloud technology is also being integrated into the design of aircraft, ships, and land vehicles. Mission-sensitive data remains one of the final frontiers for cloud migration in the defence industry and will bring greater inter-operability and ease of information sharing between all military domains as well as allied forces.  

Lara Virrey: Who are the biggest winners in the defence industry in terms of cloud right now, and why? 

Francesca Gregory: Technology vendors such as Amazon, Alphabet, Microsoft, and Oracle continue to secure large cloud computing contracts from defence players. For example, in December 2022, it was announced that the US Department of Defence (DoD) split a $9bn contract between all four of these companies, with contracts running into 2028. However, in addition to these players, companies such as Northrop Grumman, Airbus, and Raytheon Technologies are winners as they have developed partnerships with the major cloud computing tech vendors, and now offer specialised cloud solutions to the rest of the sector.

Lara Virrey: What are the biggest barriers to implementation of cloud computing in the defence industry?

Francesca Gregory: Despite the benefits of cloud, concerns over security and legacy systems have slowed its adoption and created data siloes. This has significantly undermined interoperability between business units, suppliers, and military domains. If it is to respond quickly to market disruption and emerging geopolitical threats, the ADS sector must dismantle its data siloes while maintaining the security of its systems.

GlobalData, the leading provider of industry intelligence, provided the underlying data, research, and analysis used to produce this article.  

GlobalData’s Thematic Intelligence uses proprietary data, research, and analysis to provide a forward-looking perspective on the key themes that will shape the future of the world’s largest industries and the organisations within them.