Defense IT Spending Market Report 2026

The defense it spending market size has grown strongly in recent years. It will grow from $96.12 billion in 2025 to $103.46 billion in 2026 at a compound annual growth rate (CAGR) of 7.6%. The growth in the historic period can be attributed to increasing defense modernization programs, expansion of military communication networks, rising adoption of digital command systems, growth in defense data generation, increasing reliance on network-centric warfare.

The defense it spending market size is expected to see strong growth in the next few years. It will grow to $137.48 billion in 2030 at a compound annual growth rate (CAGR) of 7.4%. The growth in the forecast period can be attributed to increasing demand for ai-enabled defense analytics, rising investments in cyber defense capabilities, expansion of cloud-based defense platforms, growing integration of autonomous systems, increasing focus on data-driven military operations. Major trends in the forecast period include increasing investments in cybersecurity infrastructure, rising adoption of defense cloud computing platforms, growing use of data analytics for mission planning, expansion of integrated defense it systems, enhanced focus on secure network modernization.

Rising military expenditure is expected to propel the growth of the defense IT spending market going forward. Military expenditure refers to the financial resources allocated by a government or nation to support its armed forces, defense infrastructure, and related activities. It plays a crucial role in defense IT spending by financing the development, deployment, and maintenance of advanced technologies, cybersecurity solutions, and information systems critical for national security and military operations. For instance, in April 2024, according to the Stockholm International Peace Research Institute, a Sweden-based specialized institute, global military spending reached $2.44 trillion in 2023, reflecting a 6.8% increase in real terms compared to 2022. Therefore, rising military expenditure is driving the growth of the defense IT spending market.

Major companies operating in the defense IT spending market are focusing on developing tactical-edge ruggedized IT systems paired with software-defined deployment platforms to meet the growing demand for mission-critical communications. These solutions integrate durable, field-hardened hardware with software frameworks that allow rapid deployment, remote management, and mission-specific configuration. For instance, in August 2023, MilDef Group AB, a Sweden-based provider of tactical IT hardware, software, and services, launched a new generation of panel PC technology, a mini-series of computers and switches, and its OneCIS battle-station software solution designed for rapid deployment at the tactical edge. The product suite features detachable screen modules that dock with compute units, Android-based devices for dismounted soldier systems, and network switches built for extreme field conditions. It enables fast deployment of IT services at the front line, supports seamless integration across land, cyber, electromagnetic, sea, and air domains, and accelerates the digitalization of critical information streams in challenging environments.

In June 2024, Cognizant, a US-based information technology company, acquired Belcan LLC for $1.3 billion. This acquisition will significantly enhance Cognizant's engineering, research, and development (ER&D) capabilities, bolstering its leadership in the Internet of Things (IoT) and Digital Engineering sectors. By merging with Belcan, Cognizant will achieve greater scale and reinforce its position as a leader in the rapidly expanding aerospace and defense (A&D) industry, leveraging a blue-chip client base, extensive domain expertise, and robust technological capabilities supported by over 6,500 engineers and technical consultants. Belcan LLC is a US-based provider of information technology (IT) services to clients in the aerospace, defense, automotive, industrial, and government sectors.

Major companies operating in the defense it spending market are Leidos Holdings Inc.; Accenture PLC; International Business Machines Corporation; General Dynamics Corporation; BAE Systems PLC; DXC Technology Company; Dell Inc.; Northrop Grumman Corporation; Unisys Corporation; Atos SE; Capgemini SE; Fujitsu Limited; Oracle Corporation; SAP SE; Microsoft Corporation; Amazon Inc.; AT&T Intellectual Property; CACI International Inc.; Atkins; Raytheon Technologies Corp.; Lockheed Martin Corporation; Aerojet Rocketdyne Holdings Inc.; L3Harris Technologies Inc; Science Applications International Corporation; Kratos Defense & Security Solutions Inc.; Mercury Systems Inc.; Cubic Corporation; Parsons Corporation; Hewlett Packard Enterprise Development LP; Viasat.

North America was the largest region in the defense IT spending market in 2025. The regions covered in the defense it spending market report are Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the defense it spending market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Taiwan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

Tariffs are influencing defense it spending by increasing costs of imported servers, networking hardware, secure communication devices, and specialized electronic components used in defense infrastructure. North America and Europe are most affected due to dependence on cross-border sourcing of advanced it hardware, while Asia-Pacific faces cost pressures on defense electronics manufacturing. These tariffs are elevating procurement costs and extending modernization timelines. At the same time, they are encouraging domestic manufacturing, strengthening local defense technology ecosystems, and increasing investments in sovereign it infrastructure solutions.

The defense it spending market research report is one of a series of new reports that provides defense it spending market statistics, including defense it spending industry global market size, regional shares, competitors with a defense it spending market share, detailed defense it spending market segments, market trends and opportunities, and any further data you may need to thrive in the defense it spending industry. This defense it spending market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.

Defense IT spending refers to the financial investment in a collection of computers, software, and networks dedicated to defense systems. It represents the funds allocated by a government to equip its military with various technologies and infrastructure.

The primary categories of defense IT spending include services, hardware, and software. Hardware encompasses the physical components of computers and related devices. The forces involved in defense IT spending include defense forces and civilian forces. Applications of defense IT spending cover a wide range, including IT infrastructure, cybersecurity, defense cloud computing, data analytics, IT applications, logistics and assets management, and other related areas.

The defense IT spending market consists of sales of defense material handling, enabling cost-savings and a competitive edge to the army, naval, and space domain. The market value includes the value of related goods sold by the service provider or included within the service offering. The defense IT spending market also includes sales of spending on defense equipment such as weapons, aircraft, and gear or personal equipment. Values in this market are ‘factory gate’ values, that is the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors, and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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