The Pentagon Needs A Software Update—Literally
The Department of Defense now faces an increasing challenge: how to empower its personnel to make faster, more informed decisions in a world overwhelmed by data and complexity.
A memo from the Secretary of Defense on how to buy software could finally herald the Pentagon’s entrance into the information age. Or, like so many other acquisition reforms of the past, it could just as easily be overtaken by inertia and founder on the rocks of the bureaucracy. The stakes for getting this right couldn’t be higher. Software offers perhaps the most compelling way to close current and future gaps between the United States and its adversaries.
Sixty years after the pronouncement of Moore’s Law, the Department of Defense still struggles with the implications of unfettered advances in commercial technology. Though the Pentagon has historically been a research and development leader, recent decades have seen federal acquisition processes and culture lag far behind commercial advances in information technology. As commercial software continues to transform global business, the slow government rate of adoption risks holding back our national security. A change in mindset and approach is urgently needed to supercharge defense by taking advantage of the revolutionary changes occurring in the commercial market.
Whether one calls it artificial intelligence, data analytics, autonomy, virtualization, or advanced computing, commercial software is the engine driving these advancements. This is perhaps the logical next step in the march of information technology, where processing speeds have exponentially increased while the price of electronic storage continues to decline. These trends have enabled the creation of ever more complex and larger amalgamations of software code, finding new uses for the vast amounts of data being created by the proliferation of sensors around the world and in space. What may be even more important than this data explosion are the opportunities being created by how humans interact with this software. The national security implications of all of this are profound.
Our combined three perspectives as authors are drawn from decades of experience working on defense policy issues in Congress and analytics within the Department of Defense. There, we observed across departments and branches of government how agility is essential for decision-making in national security.
In today’s rapidly evolving defense landscape against peer competitors, the Department of Defense now faces an increasing challenge: how to empower its personnel to make faster, more informed decisions in a world overwhelmed by data and complexity. The answer lies not in some binary equation of choosing between human intelligence and technology, but in harnessing the strengths of both.
Just as the human brain relies on neurons to process and act on vast amounts of information, the DOD must combine its neurons—the creativity, intuition, and decision-making of its personnel—with its electrons—the speed, precision, and scalability of modern software. Together, this partnership can turn overwhelming streams of data into actionable insights. It’s not about replacing people with machines—it’s about amplifying the power of human ingenuity through cutting-edge commercial software, enabling the military to adapt, decide, and act faster than ever before.
Imagine a military analyst in the field. She’s flooded with streams of data from satellites, ground sensors, social media, and countless other sources—all at once. In this moment, she has only seconds to assess, process, and act. Her decision could mean the difference between mission success or failure, between life and death. But here’s the problem: no human being, no matter how skilled, can process that level of information fast enough to respond in time. That’s where the power of software becomes critical—not as a substitute for human insight, but as a partner that amplifies and enhances her OODA (Observe, Orient, Decide, and Act) loop—her ability to make the right call, at the right time, with precision.
This merging of neurons and electrons now grants operators in the field abilities akin to superpowers. Specifically, this grants the power to sift through mountains of data, uncover key insights, and make confident decisions—all at lightning-fast speeds enabled by commercial software.
It doesn’t replace the critical thinking and intuition that only humans possess—it unleashes it. Case after case demonstrates the power of software-driven decision support in action. Whether it’s integrating satellite surveillance with on-the-ground intelligence, pinpointing threats in real time from a flood of sensor inputs, or getting ahead of mission delays with predictive maintenance, commercial software can help operators cut through the noise and act with greater speed and certainty.
The problem the DOD faces today isn’t about choosing between human intelligence and machine precision. It’s about the fact that the sheer volume of information in modern warfare far exceeds what any human can handle alone. Without software to assist, data overload becomes a critical risk, delaying decisions when every second counts. The partnership between humans and software is essential because humans are limited by time and bandwidth, while software can process, filter, and enhance information at speeds no one can dispute.
This isn’t just an operational challenge; it’s a matter of survival. Our geopolitical rivals know this. China has pumped billions of dollars into AI research in a bid to become the global leader in AI by 2030 and enforces a “military-civil fusion,” ensuring that all commercial technological advances are available to their military. Additionally, Russia has shown off a variety of new software-enabled robotics technology—including autonomous lethal drones—designed for advantage on the battlefield.
Beyond the operational benefits required to stay ahead of our adversaries, there’s a compelling financial case for this shift. Commercial software offers a cost efficiency that human labor simply can’t match. In moments where demands spike, additional computing power can be activated instantly, without the delays associated with scaling up a human workforce. Need to scale back? Software can be throttled down with a click. This adaptability isn’t just a theoretical advantage. It’s happening right now in successful defense operations worldwide, whether in the Indo-Pacific, Ukraine, or Israel, where software-driven platforms enable real-time decision-making in supply chains, intelligence analysis, and battlefield operations.
Consider, for example, a logistics platform where commercial software dynamically adjusts supply chain operations in real time, rerouting resources based on changing priorities. In this scenario, there’s no need to recruit or retrain staff to track inventory or manage the flow of materiel manually. Software handles the routine, freeing up personnel to focus on the critical, high-stakes decisions that shape mission outcomes. This is where the magic happens: when software takes on the tedious, repetitive tasks, humans are liberated to think, innovate, and act with agility. In this dynamic, technology doesn’t replace people—it makes them exponentially more powerful.
The real game-changer here is that commercial software isn’t just about saving money—it’s about unlocking new levels of performance at speed and scale. Government-built systems, with their labor-intensive designs and long development cycles measured in decades, simply can’t keep up with the rapid evolution of threats and technologies. Meanwhile, commercial software evolves continuously, driven by the needs of hundreds or thousands of customers. The DOD benefits from this constant innovation, receiving automatic software updates and gaining cutting-edge capabilities at a fraction of the cost it would take to build them from scratch.
What makes this shift even more appealing is the transparency and accountability it brings. Traditional government contracting models often reward inefficiency, with vendors paid for time spent (inputs) rather than results achieved (outcomes). This outdated model hinders the agility needed to keep pace with today’s fast-moving threats. In contrast, commercial software solutions thrive in firm-fixed-price competitive contracts, where payment is tied to outcomes, not hours worked. With these contracts, the DOD knows exactly what it’s paying for—and it gets measurable results. Vendors are motivated to deliver the best possible solutions quickly, efficiently, and at scale.
The stakes couldn’t be higher. In a world where defense operations hinge on the ability to make split-second decisions, relying solely on human labor is a risk the DOD can no longer afford to take. Commercial software now provides the flexibility, scalability, and precision necessary to operate in an increasingly complex and fast-paced environment. By integrating commercial software into its operations, the DOD isn’t just optimizing its processes—it’s future-proofing its mission capabilities and creating a new class of dual-use companies ready to serve the Government. By enhancing human capabilities with commercial software, the DOD can revolutionize decision-making and operational effectiveness in ways that human labor alone simply can’t achieve.
Despite this, the DOD still relies too heavily on labor-intensive, human-driven processes that struggle to keep up with the demands of modern warfare. To put this in perspective, DOD only spends less than 1 percent of its budget, or about $5 billion, on software. This software is one of those areas where commercial industry is light years ahead of the defense sector. Why? Because investors have parked trillions of dollars in the industry, and those investments have spurred on technology advances. The combined R&D spending of Amazon, Alphabet, Meta, Apple, and Microsoft is $227 billion in 2023—forty-five times what DOD spends on software. Annual commercial software sales of over $900 billion now exceed what the United States spends on its entire defense budget each year. DOD no longer has the resources or the knowledge to out-innovate the market in more than a few areas.
Still, the transition to combine neurons with electrons requires more than just adopting new commercial tools; it demands a fundamental shift in mindset. Even when people agree that combining neurons with electrons is the right approach and acknowledge the need for more investment in software, many still believe the government should develop software.
Despite the clear advantages of commercial solutions and the inability to ever spend enough taxpayer dollars to catch up with the commercial market, there remains a strong tendency within the department to try and build software in-house. This is driven by the desire to own intellectual property with the psychological safety that comes from a perception that the department then maintains full control over the technology. Many believe that relying on external vendors could compromise control over mission-critical technologies, even when commercial options provide faster, more cost-effective, and scalable alternatives.
This insistence on controlling intellectual property can limit innovation and slow progress, as building software from scratch is time-consuming, costly, and often less effective than leveraging commercial platforms that thousands of users across industries have honed. The irony is that, in trying to avoid vendor lock-in, the DOD creates its own form of lock-in, where only a shrinking set of government unique contractors can maintain and modernize the software, fueling a descent into inferiority.
Compounding this cultural hesitation is a persistent mindset within the DOD that people are more plentiful and cheaper than technology. In reality, the opposite is true. Commercial software is scalable, adaptable, and far more cost-effective than maintaining large teams of personnel to handle tasks that software can manage more efficiently. While the private sector continually invests in research and development to produce solutions that can be rapidly scaled and adapted, the DOD risks falling behind by clinging to internal development models that fail to keep pace with the speed of technological innovation. By prioritizing in-house efforts over external partnerships, the department not only increases costs but also risks detracting future commercial competition and limits the Pentagon’s agility in an environment where rapid response is critical.
The time has come for the DOD to fully embrace the potential of commercial software, not just as a way to save costs, but as a strategic imperative to stay ahead of adversaries. By leveraging the continuous innovation and adaptability of commercial platforms, the department can access cutting-edge capabilities without the burden of developing everything from scratch. This shift isn’t just about technology—it’s about empowering people to focus on what they do best while allowing software to handle the heavy lifting.
By shifting to a commercial software-first approach, the DOD can ensure that it remains agile, responsive, and prepared to meet the evolving challenges of the modern battlefield. Neurons alone can’t secure victory in tomorrow’s conflicts. But when combined with the power of electrons, they unlock capabilities that enable unmatched precision, speed, and mission success.
Bill Greenwalt is a Senior Fellow at the American Enterprise Institute.
Samantha Clark is a Senior Counselor at Palantir Technologies and a Senior Advisor for the Center for the Study of the Presidency and Congress. She previously served as Deputy Staff Director and General Counsel for the U.S. Senate Armed Services Committee.
Greg Little is currently a senior counselor for Palantir and was previously the executive in charge of business analytics for DOD.
Image: burakyalcin / Shutterstock.com.
Correction: An earlier version of this article referred to the secretary of defense’s “draft” memo on the Department of Defense’s software acquisition. The memo was published on March 6, 2025, before the publication of this article. 3/11/2025.