The projection comes from market research and analysis firm Frost and Sullivan in a new report called "U.S. DoD C4ISR Competitive Analysis."
The report says the market for command, control, communications, computers, intelligence, surveillance and reconnaissance was worth $75.53 billion last year. By 2017 spending is expected to be $45 billion. The reduction would particularly be in the areas of research, development, testing and evaluation.
"Though C4ISR spending will not be reduced as much as the overall defense budget, it will be negatively impacted by fewer platforms and troops," it said.
Frost and Sullivan Senior Industry Analyst Brad Curran said "reduced RDT&E will mean more reliance on mature and proven technologies and systems, with incremental upgrades that will leverage advances in commercial technology."
Successful adoption of current IT technologies -- cloud computing, data analytics, mobile devices and business and social networking applications -- are already improving C4ISR and "cost savings, ease of integration and training, and frequent upgrades of these tools are driving more companies to participate in the (Department of Defense) IT enterprise networks market."
"Cost-competitive, non-traditional defense firms that maintain a robust services capability will find steady contracting work through 2017," Curran said.