SPECIAL FEATURE
Transitioning Commercial Drone Applications into the Military Defense Market:
What You Need to Know By Edmond M. Hennessy, Performance Marketing Group
COTS Journal reconizes the importance of the Commercial UAV News concerns with this information ahead of it’s 2022 EXPO. There are many commercial drone companies who want to get a piece of the Defense Market in order to extend their portfolio. This makes sense, as securing a position in defense-related, programs can provide a predictable and sustainable source of business and compensate for unexpected swings in the business cycle. According to Fortune Magazine (Business Insights), the US Military drone market will grow from $11 Billion in 2021 to $26 Billion in 2028 which is a 12.78% CAGR (compound annual growth rate). However, migrating to the Defense and Military Market is not a simple translation of what has worked in other market segments. To tackle the tough and complex Defense sector, a company needs to understand the ground rules, and make the right moves to become a serious player. 20
COTS Journal | January 2022
What it Means to Establish a Bridge Between Commercial and Defense We have seen companies over the years declare a commitment to crack the Defense and Military Market, only to discover two years out that they discontinued their efforts or abandoned the market completely. Some of these organizations gained early success (by grabbing low-hanging fruit) or selected to develop this market segment for the wrong reasons. Entering the Defense Market requires strategic focus, relatively deep investment pockets, patience, tolerance, and an appetite and drive to run the course—no matter what materializes. The common denominator is that companies want to gain content on Deployable Programs (a program that reaches full production for a multiyear cycle—usually 7 to 10+ years). Although these sorts of Deployable Programs are the attraction, it is important not to overlook the fundamentals of the program lifecycle, budget/funding allocations (top-line defense level), priority shifts/competing interests,
fierce competition, and the realities of coping with the government and military machine. Securing a position in a deployable government defense program is a long-term, multiphase arrangement and there are no shortcuts. Years ago, we conducted research to understand and define the basic model utilized by major defense contractors/integrators that grew up in the Defense and Military Market. Our initial objective was not to translate this model as a one-size-fits-all solution for small-to-medium sized companies, but over time, it became clear that the elements of the methodology/process we defined were essential for success for any firm. Without taking this approach, we would have wandered aimlessly and taken years to understand a winning formula or never gotten there. Regardless of size, companies can retrofit and apply a similar approach, taking their business priorities, technology capabilities, resource constraints, budget availability and organizational make-up into account. The
