The Army’s Hardware Modernization

The Army is changing more than the equipment it buys. It is changing how that equipment connects, how quickly capabilities reach soldiers and how industry participates in modernization. The Army’s FY27 budget request gives IT companies a clearer picture of
where IT hardware modernization is heading: toward the infrastructure that connects soldiers, sensors, command applications, autonomous systems and electronic warfare capabilities.

The US Army’s IT modernization priorities have shifted significantly in the past two years. Its FY26 budget placed strong emphasis on procuring hardware technologies, which included communications and electronic equipment to support warfighters, with major investment in command-post infrastructure, tactical network communications, unmanned aerial systems (UAS) and autonomous systems. The 2026 enacted program baseline includes approximately $7.09 billion (including reconciliation-funded UAS investment of $953.9M) focusing on accelerating emerging battlefield technology. These include networking, command-and-control (C2), Counter-Unmanned Aerial Systems (C-UAS), sensors, computing and communications.

For FY27, the Army requested approximately $9.02 billion to support its hardware portfolio. This covers communication, electronic, UAS and autonomy programs. The Army plans to consolidate previously separate hardware investments into an integrated Next Generation Command and Control (NGC2) architecture. The planned C2 infrastructure portfolio combines storage, edge compute, network operations, mounted infrastructure and cross-domain hardware. Its C2 transport integrates cellular/wireless and multi-orbit satellite communication (SATCOM), tactical networks and radios.

Another key priority is increasing the number of drones. For FY27, the Army’s UAS budget is estimated at $1.9 billion and includes Low Altitude Stalk and Strike Ordinance (LASSO), Family of Small Uncrewed Aircraft Systems (FoSUAS) and sensors. 

Table 1 highlights the Army’s emphasis on IT hardware central to its IT modernization mission.

Table 1: FY26 and FY27 Army’s IT hardware priorities

What can IT companies expect for FY27 in support of the Army’s IT hardware priorities? For technology suppliers, the clear signals are communication-related hardware procurement and network modernization infrastructure. The Army has been shifting toward integrated battlefield capabilities, prioritizing commercial-off-the-shelf (COTS) technology for rapid integration into tactical systems instead of relying on custom-built defense hardware. This represents opportunities for distributors and integrators in servers, networking, rugged computing, wireless and communications.

Edge computing is a significant category for the Army in FY27 as well, emphasizing end-user computing and mobility. IT companies will have a competitive edge by demonstrating capabilities in command-and-control (C2) compute infrastructure and NGC2 with scalable compute and storage as the Army plans to acquire more than 2,000 tactical edge compute servers.

Networking hardware that supports software-defined, dynamically managed architectures remains important to the Army’s modernization mission. Essential hardware solutions will include switches, routers, network appliances, SD-WAN/SDN, firewalls, connectivity technologies like Wi-Fi, private cellular and network management peripherals. For the Army, SATCOM, commercial cellular, multi-orbit satellite connectivity and Wi-Fi form an integral portfolio of tactical battlefield networking technologies, not just separate enterprise conveniences. This creates an opening for companies to strengthen their offerings by partnering with specialists in 5G/wireless, multi-orbit SATCOM, antennas, modems, network resiliency and connectivity management.

Similarly, drone/autonomous systems are treated as a component of the same IT ecosystem. Companies selling computing, networking and connectivity should not view Army drone/autonomy as separate. Autonomous systems require interdependent technologies including edge processors, storage, radios, data links, SATCOM, cybersecurity, AV & displays and C2 integration.

Finally, the FY27 C2 infrastructure prioritizes open architecture, modular structure and vendor-agnostic network operations. This keeps the Army from being locked into a single proprietary management platform, making it easier to swap or add components and refresh technology faster. Companies will be better positioned when they can demonstrate interoperability, open interfaces, modular design and quick technology refresh across their solutions.

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About the Author:
Toan Le is a Senior Market Insights Analyst on the DLT Market Insights team covering DOD and IC domain-centric trends across the Public Sector.