(my thoughts)
Currently we have these ships with significant armor:
Armor Ship - Fleet-ship 1.5-7.5k armor
Space Tank - Fleet-ship 1.5-7.5k armor
Generic Starship - Starship - 1-5k armor
Raid starship - Starship - 90k armor ?? (They seem to die almost instantly for me, perhaps low base HP, low-damage, high speed, low cohesion with fleet and the fact that it often absorbs the alpha strike is responsible for that... and poor micro on my part)
Armored Golem - Superweapon - 100k armor
Armor neesds to be:
Significant, turn the tide of battles and require thought to counter.
Simple, visible in-game with a mouse-over, little metagame knowledge required
Balanced, scales with changes to ship caps
More complex, perhaps paradoxically it needs to do what HP, hull-types and damage multipliers can't do and so must be a little bit more complex than just modifying HP,
My question is, what counters do you actually want? What to boost, what to nerf?
Armor Type: Old Shields, with range and to hit mechanics
Armor Counters: Long-range kiting
Countered by: Attacks at close range (nerf to turrets, long range ships, buff to... swarmers/fighters?).
Problem: Probability and range based, not clear or intuitive
Armor Type: Heavy Armor that Negates first x damage
Armor Counters: Swarms/high-rof low-damage ships
Countered by: Big weapons, glass cannons. (plasma siege, spire destroyers etc.)
Problem: Doesn't scale well with damage, caps, multipliers etc.
Armor Type: Armor simply increases effective HP by % damage reduction
Armor Counters: Nothing
Countered by: (anti-armor)
Problem: Requires no strategy to kill.
(unless you unlock a bonus ship type... simply lasts a bit longer but probably has a lower base HP so no effective change. Perhaps useful as a buff for starships against heavy hitters but otherwise dull, uninteresting, needlessly complicated and silly as HP already covers survivability of this sort, as does hull type).
Armor Type: Deflection or Evasion. Blocks x% of shots
Armor Counters: Glass cannons, heavy hitters, low cap ships.
Countered by: High RoF ships, Swarms of ships.
Problem: Probability based, people seem to hate their super weapons being ineffective against swarms or missing with that 10M damage shot.
For it to be more significant it would need to affect more ships. So perhaps if ship size/speed was more important.
Armor changed to Deflection,
Evasion = Ship speed/Ship size + Deflection (max 95%)
Small+fast ships have ~30% base evasion (speed 120/Size 40) + 0 deflection
Capital ships have ~10% evasion (Speed 60/Size 400) + 10% Deflection
Space Tanks ~80+% evasion (Speed/size + high deflection)
It would be a boost to all fleet ship against things like spire ships, capital ships and turrets. A nerf to large ships and heavy hitters by reducing their effective damage by a significant amount. Small ships would still have high losses, but would be more likely to be replaced rather than repaired while the big ships take heavy damage (and have high HP) and need time being repaired after big battles.
Personally, I like the idea of a very high chance of deflecting shots for a single special ship type (like the space tank or armor ships evading 19/20 shots). A large flat damage reduction makes sense only for the armored golem to give it a nice gimmick "Ignores the first (say) 10000 points of damage inflicted by any weapon".
A % damage reduction for every other ship to tweak their survivability when the stats are all reduced back to sensible levels could help... but it is already covered by HP and the hull and weapon types so I'd rather not waste the effort on it.
Whatever is done, I think it needs to be playtested to really get the feel of the new mechanics.