In this research service, Frost & Sullivan overviews the US Defense Information Systems Agency’s (DISA) budget between FY2023 and FY2029. It outlines the agency’s funding distribution for each account as well as a forecast with future spending estimates. It also includes an analysis of contract awards share.
Additionally, the study highlights the trends, challenges, drivers, and restraints that the agency and companies from related industries encounter. Finally, the study points out some short- and long-term growth opportunities.
Rapid advancements in areas like AI, analytics, and cybersecurity have fostered increased collaboration between DISA, defense, and commercial companies, creating growth opportunities for these businesses. DISA plays a key role in joint operations, which require optimal connectivity to effectively support multi-domain forces and international mission partners.
However, DISA’s budget is constrained by two factors. In the short term, the upcoming presidential elections create spending uncertainty amongst market players. In the long term, since most of the agency’s funding is and will be allocated toward operations and maintenance, there are fewer opportunities for research, development, and procurement of new technologies.
The Impact of the Top 3 Strategic Imperatives on the Defense Information Systems Agency
Disruptive Technologies
- Artificial intelligence (AI) implementation is one of the US DoD’s top priorities.
- Since the rise of generative AI after ChatGPT’s launch in 2022, the department has created projects and offices to further integrate this technology.
Frost Perspective
- The DoD requested $1.80 billion to fund about 690 AI research and development (R&D) programs in FY2024.
- The Defense Information Systems Agency (DISA) constantly collaborates with industry partners and other DoD organizations in AI-related initiatives.
- For instance, in 2023, the agency partnered with DARPA to test AI models on cyber data for threat detection.
Geopolitical Chaos
- The United States is a key provider of military and economic aid to countries that are currently at war, such as Israel and Ukraine.
- Additionally, tensions with China have propelled the US to increase its presence in the Indo-Pacific theater through alliances and military drills.
Frost Perspective
- DISA has a global reach and provides services and support to all the DoD's unified combatant commands.
- For instance, in the case of the Pacific Command (INDOPACOM), DISA office manages the regional portion of the Global Information Grid and provides C4 support for local warfighters.
Competitive Intensity
- New start-ups have become key emergent technology providers in the defense sector.
- Some of these companies transition from the commercial to the military realm, rapidly scaling technologies and adapting them to defense customers.
Frost Perspective
- These start-ups often act as subcontractors and partners of big defense companies.
- DISA encourages small businesses' participation in defense initiatives through its specialized program. The agency is open to procuring cloud computing and data analytics, among others, from these companies.
Growth Drivers
DISA Budget Assessment: Growth Drivers
| Driver | 1–2 Years | 3–4 Years | 5–6 Years |
|---|---|---|---|
| In the last five years, high-speed innovation in sectors such as AI, analytics, and cybersecurity has pushed the US DoD to stay ahead of emergent technologies and threats. Such phenomena resulted in increased collaboration between DISA and defense and commercial companies and start-ups, creating new contract opportunities for them. | High | High | High |
| The DoD often sources IT solutions from commercial companies and adapts them to military standards instead of carrying out R&D projects, accelerating their procurement and implementation in the military. This is the case of DISA’s Cybersecurity Service Provider program, which hosts applications in Microsoft’s Azure platform. | High | High | High |
| The future of military operations will entail integrating traditional (land, air, and sea) and newly contested environments (such as the cyber spectrum), which will require optimal connectivity to support international mission partners. DISA actively participates in the Combined Joint All-Domain Command and Control (CJADC2) strategy. | High | High | High |
Growth Restraints
DISA Budget Assessment: Growth Restraints
| Restraint | 1–2 Years | 3–4 Years | 5–6 Years |
|---|---|---|---|
| Most of DISA’s budget is allocated to operations and maintenance (O&M), which helps sustain current operations and equipment. This restricts how much the agency can spend on R&D projects and invest in new capabilities. For reference, DISA’s FY2025 budget request for O&M was nearly $2.60 billion, while the one for RDT&E was $257.8 million. | High | High | Medium |
| The US presidential election will take place in November 2024, which will affect future defense budget negotiations. This causes uncertainty for industry participants who are awaiting potential contract opportunities. Once elected, the next administration will provide more insight into its defense policy and priorities through official documents and white papers. | High | Medium | Low |
| IT and AI products must adhere to strict government requirements, which can prolong a solution's development and security clearance. Data privacy concerns are of the utmost priority for DISA, especially since the implementation of the department-wide zero trust approach. | Medium | Medium | High |
Companies to Watch
Okta
- Okta is a US-based identity management company that offers a secure access platform to commercial customers and the federal government.
- The company’s products are compliant with the US cross-department zero trust cybersecurity strategy and have received high authorization certifications.
- Okta created a tailor-made solution for the DoD called “Okta for US military,” which is hosted on the .mil domain and AWS GovCloud.
- The company has worked with agencies like CISA in the past and is in talks to work with DISA on a yet undefined project.
ValidaTek
- ValidaTek is an IT solutions company based in the Washington, DC, area, with a wide catalog of IT products and services, such as software engineering, enterprise cloud, and consulting.
- The company has partnered with the US Army, Air Force, and Navy, as well as with DISA.
- In September 2023, ValidaTek received a task order from the latter to provide high-level engineering and development support and services to the Joint Services Provider.
- In March 2024, the company received a $43.0 million contract to modernize DISA’s Voice over Internet Protocol (VoIP) infrastructure.
Lumen
- Lumen Technologies is a US-based company that offers IT services such as internet access, cloud, and cybersecurity.
- The company scored three contract awards from DISA in FY2023 to 2024. The first was valued at around $1.5 billion and involved the supply of end-to-end communications services (such as Ethernet and internet) to the INDOPACOM.
- The second was for the provision of 11,000 fiber miles to support the DoD Information Network, valued at $110.0 million.
- Lastly, the third contract was for hybrid-cloud voice and audio-conferencing services and had a value of $223.0 million.
Lynk
- Lynk is US-based and launches satellites that work as cell signal towers, powering satellite-direct-to-standard-phone (sat2phone) connectivity with coverage.
- This solution helps access mobile coverage in remote areas where ground cell towers are unavailable.
- In April 2024, DISA awarded Lynk a contract to provide this service to the DoD, the Department of Homeland Security, and other US government agencies for an undisclosed value.
- The award includes the provision of services such as SMS text messaging, emergency cell broadcast alerts, and weather and information broadcast.
Why Is It Increasingly Difficult to Grow?
The Strategic Imperative 8™
The Impact of the Top 3 Strategic Imperatives on the Defense Information Systems Agency
Growth Opportunities Fuel the Growth Pipeline Engine™
Scope of Analysis
Definitions
Growth Metrics
Growth Drivers
Growth Restraints
Global Conflict Analysis
Market Trends Analysis
Forecast Considerations
Spending Forecast and Analysis
Spending Forecast and Analysis (continued)
Notable Initiatives
Notable Initiatives (continued)
Contract Awards Share and Analysis
Companies to Watch
Conclusions and Future Outlook
Growth Opportunity 1: Multi-Factor Authentication
Growth Opportunity 1: Multi-Factor Authentication (continued)
Growth Opportunity 2: Automated Cyber Threat Detection
Growth Opportunity 2: Automated Cyber Threat Detection (continued)
Growth Opportunity 3: Enterprise Cloud
Growth Opportunity 3: Enterprise Cloud (continued)
List of Exhibits
Legal Disclaimer
List of Figures- DISA Budget Assessment: Growth Metrics, US, FY2023
- DISA Budget Assessment: Growth Drivers, US, FY2024–FY2029
- DISA Budget Assessment: Growth Restraints, US, FY2024–FY2029
- DISA Budget Assessment: Congress Appropriation Forecast, US, FY2023–FY2029
- DISA Budget Assessment: Congress Appropriation Request, US, FY2024
- DISA Budget Assessment: Contract Awards Share by Category, US, FY2023
- DISA Budget Assessment: Top 5 Companies by Contract Awards Sum, US, FY2023
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In this research service, Frost & Sullivan overviews the US Defense Information Systems Agency s (DISA) budget between FY2023 and FY2029. It outlines the agency s funding distribution for each account as well as a forecast with future spending estimates. It also includes an analysis of contract awards share.
Additionally, the study highlights the trends, challenges, drivers, and restraints that the agency and companies from related industries encounter. Finally, the study points out some short- and long-term growth opportunities.
Rapid advancements in areas like AI, analytics, and cybersecurity have fostered increased collaboration between DISA, defense, and commercial companies, creating growth opportunities for these businesses. DISA plays a key role in joint operations, which require optimal connectivity to effectively support multi-domain forces and international mission partners.
However, DISA s budget is constrained by two factors. In the short term, the upcoming presidential elections create spending uncertainty amongst market players. In the long term, since most of the agency s funding is and will be allocated toward operations and maintenance, there are fewer opportunities for research, development, and procurement of new technologies.
| Deliverable Type | Market Research |
|---|---|
| Author | Sol Ipuche |
| Industries | Aerospace, Defence and Security |
| No Index | No |
| Is Prebook | No |
| Keyword 1 | US Defense Budget Assessment |
| Keyword 2 | DISA Budget Trends |
| Keyword 3 | US Defense Information Systems Market |
| List of Charts and Figures | DISA Budget Assessment: Growth Metrics, US, FY2023~ DISA Budget Assessment: Growth Drivers, US, FY2024–FY2029~ DISA Budget Assessment: Growth Restraints, US, FY2024–FY2029~ DISA Budget Assessment: Congress Appropriation Forecast, US, FY2023–FY2029~ DISA Budget Assessment: Congress Appropriation Request, US, FY2024~ DISA Budget Assessment: Contract Awards Share by Category, US, FY2023~ DISA Budget Assessment: Top 5 Companies by Contract Awards Sum, US, FY2023~ |
| Podcast | No |
| Predecessor | KA27-01-00-00-00 |
| WIP Number | KADB-01-00-00-00 |
US Defense Information Systems Agency Budget Assessment, FY2023 FY2029
US Defense Information Systems Agency Budget Assessment, FY2023 FY2029
Collaboration Between Defense and Commercial Companies Fosters an Innovation Culture
RELEASE DATE
02-Sep-2024
02-Sep-2024
REGION
North America
North America
Deliverable Type
Market Research
Market Research
Research Code: KADB-01-00-00-00
SKU: AE_2024_973
$2,450.00
In stock
SKU
AE_2024_973