Best of LinkedIn: Defense Tech CW 44/ 45

00:00:00: This episode is provided by Thomas Allgaier and Frenus, based on the most relevant LinkedIn posts about defense tech from CW-IV & IV.

00:00:09: Frenous is a B to B market research company that supports ICT providers with a structured Defense Market Entry Framework designed to move them from European Defense Opportunity Landscape to qualified ministry conversations within six to eight weeks.

00:00:22: You can find more info in the description.

00:00:24: It's

00:00:25: really fantastic to be here with you to unpack all of this.

00:00:28: Yeah same here.

00:00:29: So today's deep dive is mapping the top defense tech trends for well, for digital transformation professionals.

00:00:36: We're pulling directly from the people who are actually building and buying these systems right.

00:00:40: we're looking at the new physics of drone warfare major shifts in Defense Tech exits and software integration The harsh realities of procurement and production And how asymmetric warfare is forcing NATO to completely rethink sovereign capabilities

00:00:55: which is, I mean it's a massive agenda but really all connects to one fundamental shift in how we understand conflict and technology right now.

00:01:03: Yeah

00:01:03: exactly think about this way.

00:01:05: usually when we talk about battlefield there is an expectation of clarity like looking at map.

00:01:11: you draw red line here blue line.

00:01:13: their commander points says that they're the front.

00:01:18: But step into digital transformation and modern defense tech.

00:01:22: suddenly that map totally useless.

00:01:24: We're looking at a battle space that is invisible high speed and quite frankly Incredibly murky.

00:01:30: Yeah, it's the totally dynamic grid.

00:01:32: yeah And the rules governing that great are being rewritten.

00:01:34: at the tactical edge we're seeing The physical realities of speed cost and detection completely dismantle the old defense playbooks

00:01:42: right.

00:01:43: So let's start with a basic math problem That Is currently breaking?

00:01:48: Ariel Parrots shared an insight recently highlighting how the fundamental cost argument of counter drone defense is just falling apart.

00:01:56: Ah, yeah!

00:01:56: The old assumption being that you can always intercept cheap drones with equally-cheap countermeasures right?

00:02:02: Exactly

00:02:03: Yes...the industry bet really heavily on cheap FPV interceptors to take down incoming strike drums.

00:02:09: but the math it doesn't work anymore.

00:02:11: Those cheap interceptor are built about three hundred kilometers per

00:02:15: hour.

00:02:15: Okay

00:02:16: Meanwhile, the new shy head strike drones they're supposed to be catching are reportedly hitting four hundred and fifty kilometers per hour.

00:02:22: Wow!

00:02:23: I know right?

00:02:24: It's like building a massive fleet of cheap mass-produced police cruisers to chase a syndicate that is exclusively driving hypercars... it begs question Are we too obsessed with making interception cheap while completely ignoring basic physics?

00:02:40: speed?

00:02:41: That is critical variable.

00:02:43: there Speed is becoming the deciding factor and Maxime Bollett and Jamie Rogers both shared some data showing how The bleeding edge of the industry is responding to this.

00:02:53: for instance quantum systems just flew their apex record hunter demonstrator at seven hundred seventy-seven kilometers per hour.

00:03:01: wait what?

00:03:03: Seven hundred seventy seven kilometers per our on electric

00:03:06: power.

00:03:06: Yeah, exactly

00:03:08: How does a battery electric interceptor outpace jet-powered drone.

00:03:12: I always thought jet fuel had a like, massive advantage in energy

00:03:16: density."

00:03:16: Well

00:03:16: it does!

00:03:17: It has higher energy density over long duration.

00:03:20: but interception isn't about long duration...it's about a short incredibly violent sprint.

00:03:26: Electric motors deliver instant one hundred percent torque the literal millisecond you apply power.

00:03:31: Oh right because you don't have to wait for a turbine to spool up?

00:03:34: Exactly So.

00:03:36: for a short burst, the power-to-weight ratio of an electric interceptor allows it to absolutely rock it off the rail.

00:03:43: They're targeting Russian jet powered strike drones that fly at around six hundred kilometers per

00:03:47: hour.

00:03:48: right

00:03:48: when your battery electric interceptors suddenly faster than The Jet Powered drone its hunting you completely invert the cost and speed equation of air defense

00:03:57: That actually tracks.

00:03:58: but I mean hardware.

00:03:59: speed is only useful if you can actually spot the threat in time Right?

00:04:03: If a drone is doing six hundred kilometers per hour, your reaction window's virtually non-existent.

00:04:08: Oh absolutely!

00:04:09: Which brings us to detection... The good news is that Detection Networks are well.

00:04:14: they're finally reaching scale.

00:04:15: Jimmy Lee and Ken Thompson provided some incredible context on this.

00:04:19: recently.

00:04:19: We've seen companies like Hidden Level detect hitting full rate production for their sensor systems.

00:04:24: Okay thats huge

00:04:25: Yeah, and the broader counter drone market is projected to boom.

00:04:29: They're projecting growth from six point two three billion dollars in twenty twenty five To over twenty-five billion dollars by twenty thirty four.

00:04:36: I saw those projections But there is a major technical hurdle here that really stood out to me.

00:04:42: radar has blind spots.

00:04:44: fixed wing attack.

00:04:44: drones are flying incredibly low specifically In this like twenty to one hundred and fifty meter band.

00:04:50: Oh yeah That altitude isn't absolute nightmare for traditional systems.

00:04:54: Radar looks up into the sky, so it really struggles to filter out the ground clutter when it has to look down.

00:05:01: Right and beyond the clutter what if you're a systems integrator trying to protect critical infrastructure like an oil refinery or an LNG plant?

00:05:08: Those sites are highly electronegnetically sensitive.

00:05:11: You can't just blast active radar everywhere without interfering with facilities own digital controls.

00:05:16: So what's the work around for that?

00:05:18: well they are having to rely on passive acoustic layers.

00:05:21: Oh wow okay

00:05:22: essentially deploying arrays of high-tech microphones to fill that low altitude gap.

00:05:27: But wait, how do you filter out the noise of an actual oil refinery to hear a drone?

00:05:32: The ambient noise must be deafening!

00:05:34: Right it's entirely reliant on machine learning...the acoustic sensors aren't just listening for volume.

00:05:40: they're constantly running audio feeds through AI models that are trained on massive library or specific drone motor acoustic signatures.

00:05:47: Ah, I see.

00:05:48: Yeah so the software filters out the industrial hum and isolates a specific pitch of a propeller And then triangulates the position without emitting any radio frequencies at all.

00:05:57: It operates completely silently.

00:05:59: twenty-four seven

00:06:00: That is brilliant adaptation!

00:06:03: Really it transitions us perfectly to next reality in this industry.

00:06:06: How so?

00:06:07: Well if the hardware requirements are evolving this aggressively, I mean requiring electric propulsion sprints machine learning acoustic filtering nationwide sensor nets.

00:06:16: The question becomes who actually has the capital and the distribution to scale

00:06:21: it?

00:06:21: Ah yeah...the boardroom dynamics here is totally wild!

00:06:30: Matthew Bernard, Ali Java Harry and Zachary S all highlighted a recent deal that illustrates this perfectly.

00:06:37: Salesforce just acquired a battlefield logistics startup called Rune Technologies for reported three hundred seventy five million dollars

00:06:44: which is the staggering multiple.

00:06:45: by The way rune was only founded in twenty-twenty four And had raised what roughly thirty million dollars.

00:06:51: right.

00:06:52: so we're talking about a twelve X return on capital In nearly three exits last valuation.

00:06:57: but Let me push back on this a bit because it feels kind of counterintuitive.

00:07:02: It's like Amazon buying whole foods On the surface, I'm looking at this and asking why on earth is a massive clunky enterprise CRM software company Buying a contested logistics tool

00:07:14: right?

00:07:15: how does a cloud-based SaaS platform survive?

00:07:17: At the tactical edge where bandwidth is literally zero?

00:07:20: its survives through asynchronous data synchronization Which is exactly what rune brings to the table.

00:07:26: In a contested environment where your communications are jammed, edge nodes have to be able to cache data locally.

00:07:32: Okay?

00:07:33: They operate independently and the exact millisecond-a brief window of connectivity opens up.

00:07:38: they burst.

00:07:38: sync that data back to the central network.

00:07:41: it gives commanders a unified logistical picture even when the Network is degraded.

00:07:45: okay make That makes sense from a business strategy perspective for Salesforce.

00:07:49: well sales force buys instant credible distribution at The Tactical Edge And Rune gets plugged directly into Salesforce's massive, ten-year five point six billion dollar army contract.

00:08:00: The Pentagon desperately wants real software modernization.

00:08:03: they are totally tired of the spoke isolated programs that don't talk to each other.

00:08:07: They want enterprise scale resilience.

00:08:11: That makes a lot of sense and by the way if you were finding these underlying market mechanics as fascinating As we are.

00:08:17: make sure to hit subscribe so you don't miss our future deep dives

00:08:20: Absolutely.

00:08:21: I'm really glad you brought up the enterprise scale though, because does this imply that ultimate defense tech exit isn't going public anymore?

00:08:29: Is the goal now just to get swallowed by an enterprise software giant?

00:08:33: It's one highly viable path but massive defense native consolidation is happening in parallel too.

00:08:39: Stephen Marcus Tim Porter and Vlad Alexanik pointed out shield acquisition recently.

00:08:43: Shield acquired EchoDyn for five point three billion dollars And they did this alongside raising two point five billion dollars in financing, reaching a massive twenty eight point eight billion dollar valuation.

00:08:55: Wait Echo nine builds meta material radar right?

00:08:58: Walk me through what that actually means because it sounds like science fiction.

00:09:02: Why is the radar company worth a multi-billion dollar acquisition?

00:09:05: It does sound like sci fi.

00:09:07: so traditional radar systems usually require massive, physically rotating dishes or you know incredibly power hungry phased arrays.

00:09:15: Metamaterials actually change the physics of the antenna itself.

00:09:18: okay they use engineered microstructures basically patterns etched into the material that can electronically steer radar beams without any moving parts at all.

00:09:26: oh wow yeah it makes the radar incredibly lightweight low-power and compact.

00:09:30: You Can Stick High Fidelity Radar on Small Drones Or Agile Vehicles That Could Never Carry Traditional Systems.

00:09:36: So, SHIELD is buying that specific hardware capability.

00:09:39: Precisely!

00:09:40: And this proves what's being called the Holy Trinity of Defense Tech Hardware software and services coming together.

00:09:47: You can't just build a great drone airframe anymore.

00:09:50: you need AI software stack to fly it autonomously The metamaterial radar guide in service contract to maintain data infrastructure.

00:09:58: This scale of capital moving into this is difficult to wrap your head around.

00:10:02: Anton Bozzardin and Luke Kulick noted Fifteen defense tech unicorns have raised over thirteen billion dollars in just the last eighteen months.

00:10:11: Andarilla alone is sitting at a sixty-one billion dollar valuation.

00:10:15: It's unbelievable!

00:10:16: Now

00:10:16: we're seeing European primes on a massive buying spree too, Phallus acquiring Exxail, Rhinematal taking majority stake and DOK ING...

00:10:27: it's becoming highly clustered ecosystem as well.

00:10:29: very much so.

00:10:30: Look at San Luis Obispo in California.

00:10:32: It's a town of under fifty thousand people, yet it produced over one point one billion dollars in drone and missile tech exits in just eighteen months.

00:10:41: these like micro clusters of engineering talent are building sovereign capabilities in their own backyards.

00:10:47: they really are.

00:10:48: however we do need to inject some realism here.

00:10:52: high valuations massive m&a deals and localized talent clusters make for incredible press releases.

00:10:57: But all of this innovation ultimately collides with the slow grinding gears of government procurement.

00:11:04: Oh yes, The Procurement Reality Check.

00:11:07: Carl C and Mark K brought up that US military is pushed by cheap drones specifically pointing to two-year one point one billion dollar drone dominance program

00:11:17: right?

00:11:18: The mandate is to field hundreds of thousands low cost drones.

00:11:22: but challenge they face isn't prototyping.

00:11:25: it's establishing repeatable production at scale while simultaneously avoiding obsolescence.

00:11:31: And obsolesce happens faster in this sector than almost any other?

00:11:34: Exactly Think about trying to stockpile a hundred thousand smartphones, but by the time they are finally delivered your warehouse The cellular networks have completely changed frequencies rendering the phones totally useless.

00:11:47: Electronic warfare adapts so fast on the battlefield that software and communication links.

00:11:52: running a drone into spring will completely fail against new jammers late summer.

00:11:57: So how can a military justify stockpiling physical airframes that might be obsolete in the matter of weeks?

00:12:03: You are hitting on the exact structural friction that investors and small to medium enterprises, they're staring down right now.

00:12:10: Jesse Newsome and Justin Nerdom pointed out a massive gap between A successful pilot program an actual recurring budget lines.

00:12:18: Yeah you can prove your drone works beautifully on a test range but getting the government to actually commit the funds, to sustain a continuous production factory is an entirely different story.

00:12:28: Especially when budget headlines themselves are incredibly confusing.

00:12:32: Oh they can be highly misleading.

00:12:34: Consider the Pentagon's autonomy budget.

00:12:36: Recently A narrative spread that The Department of Defense' massive fifty four point six billion dollar autonomy request was slashed by Congress down just one billion dollars

00:12:46: Which sounds like an absolute death blow to the industry.

00:12:49: If I'm a startup founder reading that, i am panicking.

00:12:52: Right but The headline was false!

00:12:56: A

00:13:15: reconciliation bill

00:13:18: is a legislative tool used to pass sweeping budget measures outside the normal appropriation cycle.

00:13:23: It's often used bypass filibusters, by parking funds.

00:13:27: there the DOD was trying maneuver around strict budget caps.

00:13:31: But consequence for our startup?

00:13:33: Massive uncertainty.

00:13:34: You might be planning your burn rate and production scale against headlines of a fifty billion dollar windfall but that money tied up in highly volatile political machinery.

00:13:43: So founders really can't rely on the normal procurement cycle.

00:13:47: What is the alternative, just burning venture capital while you wait?

00:13:51: Well some are entirely bypassing traditional procurement.

00:13:55: Pari Singh highlighted a really bold move by Andrewle.

00:13:59: they're committing three point seven billion dollars of their own private capital to build The Arsenal two shipyard in Maryland.

00:14:05: Wait what yeah They're doing this too.

00:14:08: built components for Virginia class submarines

00:14:11: A software and drone company building a physical shipyard with their own money.

00:14:15: Yes, And the crucial detail here is The business model.

00:14:19: they're moving away from the traditional defense cost-plus Model and shifting to an output based reality

00:14:27: that costs plus model being where the government pays for all your time in materials Plus a guaranteed profit percentage on top which I mean.

00:14:34: That always struck me as an incentive to go over budget and take as long as possible.

00:14:38: It absolutely creates a perverse incentive for inefficiency.

00:14:41: By funding the factory themselves and shifting to an output-based model, Andrel only gets paid when they actually deliver a finished working submarine component.

00:14:50: Oh wow!

00:14:51: it forces ruthless efficiency because their own skin is in game.

00:14:55: That's massive paradigm shift for industrial production.

00:14:59: but you know procurement models fail or rely on single points of failure.

00:15:04: The consequences are immediate and lethal.

00:15:08: This forces NATO to radically rethink what sovereignty even means in the digital

00:15:13: age.".

00:15:14: Absolutely, we're seeing the intersection of civilian tech and military operations become incredibly sensitive.

00:15:21: I want to carefully bring up an analysis shared by Shane O'Neill Mark Sealing And Adrian Andringa.

00:15:28: Just be absolutely clear to you listening.

00:15:30: We are impartially reporting viewpoints from these sources without endorsing them.

00:15:35: simply analyzing the structural events they discussed.

00:15:38: Right

00:15:38: They looked at the geopolitical shockwave surrounding Starlink speed caps in Ukraine

00:15:43: The core issue there being, the dependency on commercial privately owned infrastructure during an active conflict.

00:15:49: Exactly According to the analysis when those satellite speeds were reportedly throttled it triggered a realization among NATO allies.

00:15:57: They realized that a single tech billionaire, or sudden shifts in corporate policy could act as literal kill switch over a nation's critical wartime infrastructure.

00:16:07: Imagine renting your entire central nervous system from private vendor who has the power to change terms of service while you're on fire!

00:16:16: We see similar dynamic here too….

00:16:19: The EU relies heavily on Galileo and Copernicus satellites for navigation But they have no actual space force assigned to protect those orbital assets.

00:16:30: Are militaries trading frontline physical exposure for massive digital vulnerability?

00:16:35: Well, the reality of the battlefield is forcing rapid adaptation because the physical exposure is becoming totally untenable.

00:16:42: Patrick Lertz Doug Livermore and Gary Kay detailed how The Physical Kill Zone in Ukraine now extends tens of kilometers behind the actual front line

00:16:52: because continuous drone surveillance paired with long-range fires means there is literally nowhere to hide.

00:16:58: Precisely, the rear echelon is no longer safe in this environment.

00:17:02: autonomy is not a luxury item you procure.

00:17:04: when the budget is healthy it's essential for basic operations like resupply and casualty evacuation simply to remove human exposure right?

00:17:13: When militaries try to solve this lethality with improvised legacy thinking.

00:17:17: It fails catastrophically.

00:17:19: take Russia's turtle armor These heavy improvised metal shells bolted onto vehicles.

00:17:23: Oh, I've seen those.

00:17:24: yeah

00:17:25: They are consistently failing against agile drones because they trade vital mobility speed and visibility for an illusion of physical protection.

00:17:32: Heavy metal cannot beat smart software

00:17:35: And Europe is waking up to this reality.

00:17:38: Carolina Kissel and Andreas Kubilius pointed out that Poland Is now spending an astonishing four point eight percent Of its GDP on defense.

00:17:45: They are on track to build a massive conventional tank army, but raw firepower is not enough.

00:17:51: Is it Europe's real gap?

00:17:53: Is this severe lack of strategic enablers

00:17:55: yes exactly Military mobility heavy airlift and intelligence surveillance and reconnaissance ISR right

00:18:02: areas where Europe still heavily depends on the United States.

00:18:05: If you could outmove the tanks across the continent or see over-the-horizon to protect them The tanks just do not matter.

00:18:12: To try and fix this structural weakness, the EU has just opened a second twenty-one point three billion euro safe call.

00:18:19: Which is specifically designed for joint defense procurement?

00:18:21: Let's quickly break down what a Safe Call actually is for our listeners in Enterprise Deck!

00:18:26: Sure

00:18:27: It stands for support to act in support of ammunition production, but more broadly these joint procurement instruments are designed to pool European buying power.

00:18:36: Instead of twenty-seven nations buying slightly different systems they aggregate the demand to create economies of scale for defense contractors.

00:18:43: it's an attempt to build genuine sovereign capacity

00:18:46: and all comes full circle doesn't?

00:18:48: You can engineer an electric drone that goes seven hundred and seventy-seven kilometers per hour, but if you cannot produce it at scale because your budget is tied up in a reconciliation bill or If its navigation gets cut off by civilian vendors terms of service It's really just an expensive museum piece.

00:19:03: It really does.

00:19:05: Which brings us to a crucial question for you listening today as you drive digital transformation In your own enterprise.

00:19:11: look closely at your tech stack.

00:19:14: Are you building the corporate equivalent of turtle armor, bolting on heavy improvised legacy systems that look tough but ultimately destroy your agility?

00:19:23: Or conversely are your operational dependencies exposing to a sudden kill switch from single critical vendor.

00:19:29: If you enjoyed this episode new episodes drop every two weeks.

00:19:33: Also check out our other editions On cloud insights and sovereignty ICT in tech Insights Digital products & services AI and agentic Systems Green ICT and Sustainable AI, and HealthTech.