Military cuts will have varied impact

Military markets have been fairly bullish over the past several years, but that’s changing rapidly. Over the next few years, one of the big challenges for any military supplier will be to determine where cuts are going to be made.

At this week’s AFCEA West 2012 exhibition, commanders from all branches shared one common element when they stood at the podium. Nearly every speaker mentioned budget cuts and the need to operate in a constrained environment.

The challenge will be to determine where cuts will come. The commander of the Naval Special Warfare Command, which lists the killing of Osama Bin Laden and the recent rescue of hostages in Somalia in its successes, predicts that his Seal teams won’t be hit too hard by budget cutters.

Similarly, the leader of the Navy’s Data Center Consolidation plan said his budget won’t be greatly impacted. He’s upgrading the information technology centers, eliminating many of them while moving the navy towards common industry platforms. His group is spending money now so the Navy won’t be wasting money by supporting 20 different operating systems on a host of incompatible server systems that are difficult and costly to maintain. Reducing the number of data centers will reduce manpower, which is one of the military’s major costs.

Satellite systems and unmanned vehicles are also expected to be fairly safe areas. But in a number of conversations with military and commercial satellite service suppliers, there was a note of skepticism about funding that wasn’t there a few months ago.

Budget cuts are definitely coming. There will be areas that avoid the axe, and some will undoubtedly get increased funding. It’s going to be challenging to determine how the cuts will impact projects throughout the electronics industry supply chain

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