The Non-AI Software Playbook: How Foundational Tech is Quietly Dominating Defense and Industry Data Modernization

The tech world is obsessed with AI. Investors chase generative models, autonomous systems, and the promise of disruption. But while the spotlight is on artificial intelligence, a quieter revolution is underway—one rooted in the unsung heroes of enterprise software. This is the era of non-AI software, the foundational tools enabling data modernization in defense, manufacturing, and critical infrastructure.

Bruce Richards, a venture capitalist and author of the blockbuster moment thesis, argues that the most overlooked opportunities lie not in flashy AI applications but in the software that integrates, secures, and prepares data for the future. Richards' thesis holds that companies building the “plumbing” of modern data systems—data operations (DataOps), cloud infrastructure, and cybersecurity—are set to thrive as industries like defense and industrial manufacturing undergo their most significant digital transformations in decades.

Why Non-AI Software is the Unsung Hero of Modernization

The Department of Defense (DoD) isn't just buying more missiles or drones—it's buying data infrastructure. A recent Maximus report highlights that DoD's Zero Trust Strategy and Joint All-Domain Command and Control (JADC2) initiatives rely on software that unifies legacy systems, secures data at the edge, and creates interoperability across domains. This isn't about AI “thinking” for soldiers; it's about ensuring that a logistics system in Afghanistan can talk to a satellite in space.

Maximus, a company often overlooked in the AI frenzy, exemplifies this shift. Its Q2 FY2025 results show revenue growth of 10.9%, driven by contracts with the DoD and Veterans Affairs, where its AI-adjacent tools—like its AWS GovCloud-powered records system—are enabling faster claim resolutions and data-driven decision-making. But the real value isn't in the AI itself. It's in the underlying software that integrates legacy ERP systems, secures data with zero-trust frameworks, and builds platforms for future AI adoption.

The Three Pillars of Non-AI Dominance

1. DataOps: The Glue of Modernization
   Defense and industrial sectors are drowning in fragmented data. A shipyard might use one system for design, another for procurement, and a third for compliance. DataOps tools—like those offered by SAP (SAP) and Maximus—standardize workflows, automate reconciliation, and create “single sources of truth.” This isn't glamorous, but it's mission-critical.

2. Cybersecurity: The New Infrastructure
   The Pentagon's Zero Trust Architecture demands constant authentication, encryption, and real-time threat detection—all enabled by non-AI software. Maximus' 360-degree cybersecurity solutions, which prioritize configuration management and identity governance, are now table stakes for DoD contracts.

3. Cloud Infrastructure: The Foundation
   Moving data to hybrid clouds isn't about AI—it's about scalability. Companies like Maximus and Oracle (ORCL) are building the “pipes” that allow industries to transition from on-premise silos to cloud-native systems.

The Market's Oversight: A Buying Opportunity

The stock market has yet to recognize this shift. While AI stocks like NVIDIA (NVDA) and C3.ai (AI) trade at premium multiples, non-AI software names like Maximus (MXIM) and SAP are undervalued.

Consider this: Maximus' federal segment margins rose to 15.3% in Q2—up from 11.9% a year ago—while its DoD pipeline sits at $41.2 billion. Yet its stock trades at just 14x forward earnings, a fraction of AI peers. Meanwhile, SAP, which provides the backbone for defense logistics (e.g., S/4HANA ERP), trades at 16x, despite its role in the $200B+ global defense IT market.

The Call to Action: Invest Before the Market Catches Up

The writing is on the wall. The DoD's 2025 budget allocates $100B+ to modernization, with 60% earmarked for software and data systems. Industrial sectors—from energy to manufacturing—are following suit.

Richards' blockbuster moment thesis isn't a prediction—it's already here. The companies dominating this space aren't the ones in the news. They're the ones writing the code that integrates legacy systems, secures data, and creates platforms for AI to thrive.

Act now. Buy Maximus (MXIM) at a discount. Pair it with SAP (SAP) or cybersecurity leaders like CrowdStrike (CRWD). Avoid chasing AI hype—this is where the real money will be made.

The next decade won't belong to the AI companies. It'll belong to the architects of modern data infrastructure. The time to invest is now.

Data source: U.S. Department of Defense fiscal reports

Investors, this is your playbook. Ignore it at your peril.