Initially, the preserve of governments and academia, space has rapidly transformed itself into a viable business proposition. It’s imperative both for our society and security. We can no longer live our daily lives as we know it without space.
Shumpeter’s ‘creative destruction’ is defined as the decay of long-standing practices, procedures, products, or services followed by more innovative ones. Space provides one of the most disruptive technologies for innovation and change. Space technology and its applications are on the path of transition from a standalone system to becoming a part of everyday life.
Initially the preserve of government and academia, space as a sector is rapidly evolving into a viable business proposition.
Earth observation (EO), positioning, navigation, and timing (PNT), and data analytics delivery over the Cloud is now dominated by industry players. Though globally government remain the single largest buyer of the space-based products and services, it can be seen that they are now increasingly being subsumed by new users or industries.
Transition from sovereign to commercial
Primarily, space applications were used by military under government control. Private industry was used as defense contractors. While the civilian benefits of space communications and broadcasting were realized long ago and commercialized through private entities, EO from space and satellite-based navigation took longer to realize their commercial potential.
Initially, they were government-funded systems like NOAA, Landsat, IRS, GPS, GLONASS, etc. Private industry promoted the downstream applications of the services these satellites provided.
The commercialization of upstream activities like satellites and sensors began in the US around 1994 when Space Imaging was authorized to build and launch high-resolution EO satellites. The first commercial EO satellite was IKONOS-2, launched in 1999. Since then, Maxar has emerged as a major player after a series of acquisitions and mergers.
Tony Frazier, Executive Vice President and General Manager of Public Sector Earth Intelligence, Maxar, sees a market opening up with “a ‘buy first, build last’ mentality for procuring geospatial imagery, analytics, and related products and solutions. While the pace of this trend varies from country to country, it reflects on the maturity of the commercial geospatial sector worldwide and the increasing willingness of government agencies and militaries to put trust in proven commercial providers like Maxar to supplement their capabilities”.
In Europe, ICEYE, and in the US, Capella Space are prominent synthetic aperture radar (SAR) data provider that use SAR satellite constellations. Payam Banazadeh, Founder & CEO of Capella Space sees an uptick in government agencies and local and international humanitarian groups interested in accessing commercial SAR capabilities, especially in the wake of the Ukraine crisis, to monitor the conflict and inform critical decision-making. “Commercial companies, like Capella Space, are uniquely positioned to create more direct and reliable access to the critical information needed for governments to meet their mission and business objectives”.
Commercial companies are playing an increasingly larger role in space. NASA has been leading the charge with commercial cargo and crew programs as well as its initiatives to replace the ISS with commercial space stations. The Space Development Agency, a division of the US Space Force, has been pertinently acquiring commercial technology to build the agency’s Transport Layer.
It’s noteworthy, while SAR has been available in the government sector for decades, it hasn’t always been as easy to operationalize and scale at the rate it can be now.
Given the impact of climate change on the industry, private players are also eyeing commercial meteorological satellites. GHGSat is detecting greenhouse gases essential for climate change studies. On the other hand, Planet has shaken the market with its constellation of small satellites for optical sensing. Hawkeye 360 provides a new twist to ELINT satellites by integrating RF transmission detection with geolocation.
Commercial companies are playing an increasingly larger role in space. NASA has been leading the charge with commercial cargo and crew programs as well as its initiatives to replace the ISS with commercial space stations. The Space Development Agency, a division of the US Space Force, has been pertinently acquiring commercial technology to build the agency’s Transport Layer.
Dylan Taylor, Chairman and CEO of Voyager Space sees that, “governments are also leveraging commercial satellites and technology for several use cases, including Earth observation and national security.” He opines that “most people would be amazed to learn how many commercial companies are investing in space-based assets. The ‘space race’ of the 21st century now has dozens – perhaps hundreds – of players, and with that comes the need for a different way of looking at collaboration”.
AWS Director of Aerospace and Satellite, Clint Crosier says, “commercial organizations are developing new space technologies and driving innovation across various mission areas. Many of the 70-plus space agencies around the globe are looking to leverage this innovation to solve future mission requirements more quickly for space-based missions that directly benefit citizens and protect natural resources.”
Organizations like Ursa Space rely on AWS to maintain a catalog of over 10 million SAR satellite images which is used by government customers, first responders, and other users to easily find relevant information within minutes.
European countries are also opening up the commercial space sector for some time now through different European Union (EU) authoritative bodies.
“For the last 18 years, commercial space companies have been contracted by the Joint Research Council (JRC) to centralize the provision of imagery for the different countries. From 2023 the countries will need to rely on the commercial space sector to supplement Sentinel imagery for verification purposes,” indicates Skye Boag, Marketing Manager, and Maria Hochleitner, Sales Manager, European Space Imaging.
Emmanuel Pajot, Secretary General at EARSC observes “Governments and international organizations like the ESA have been working on transferring routine EO activities like procurement of data and services to commercial entities. Driven by the increasing demand for EO data and services, private companies are also developing their EO capabilities by launching their satellites and developing new technologies.”
The commercial EO industry is expected to grow through EU policies aimed at opening a level playing field to support the promotion of the private sector. ESA’s ScaleUp program is for making Europe a hub for space commercialization by providing business incubation, business acceleration, intellectual property, and technology transfer services to new companies while ensuring that business ideas scale up in new marketplaces and attract private and institutional investors.
In India, an independent agency, IN-SPACe was created to regulate and promote building of routine satellites, rockets and commercial launch services through native companies. Dr.
Vinod Kumar, Director – Promotion Directo- rate, IN-SPACe & Executive Secretary – ASI, Department of Space, Govt. of India concurs, “There is a paradigm shift from government to the involvement of many diverse space actors who are carrying out activities in up-stream, mid-stream, and down-stream.”
Crafting the future
Technologies
The transition from sovereign to commercial is powered by the emergence of new application areas through the evolution of new user communities. It is an interplay of technological advances, emerging needs, and enabling policies.
Apart from new sensors on board satellites and satellite constellations, there are many advanced developments in data usage. Edge computing on satellites can reduce on-ground data curation and efficient bandwidth usage for data transmission.
The use of data ensembles, originally restricted to the oil & gas industry and meteorologists, is now becoming a common practice in many fields ranging from agriculture to urban planning.
There’s huge amount of EO data and an increasing awareness among non-space companies about the benefits of EO. Technological advancements, lower operating and launch costs, are also encouraging companies to participate in the space industry.
Cloud storage and computing is another technology impacting geospatial data and service delivery. This enables the ensemble approach by providing analysts with data aggregation, and AI/ML tools. The analysts, in turn, can provide easy access and insights to users who are not experts in geospatial analytics.
Customers across the public and private sectors increasingly demand integrated offerings that give them the insights they need 24/7 and in all weather conditions. That requires combining traditional optical imagery with other forms of intelligence, such as SAR and radio frequency (RF).
In illustrating this, Frazier describes a real-world test: “a camera on a Saab Gripen E fighter jet flying over Sweden captured a live stream of its flight path. Maxar’s Precision 3D Registration (P3DR) compared that incoming livestream to the Maxar 3D Surface Model of the area stored on the jet. By matching scenes in the livestream to the 3D data in real time, P3DR could determine the jet’s precise location, enabling the pilot to navigate and carry out the mission without GPS. The ability to transform satellite imagery into a 3D environment, paired with accurate geo-registration, is a new and powerful tactical navigation capability within GPS-denied environments.”
Then there is a growing popularity of low-Earth orbit (LEO). Space-based assets in LEO support much of the terrestrial infrastructure including utilities, emergency communications, military operations and more. Taylor explains that other technologies that will make an impact sooner rather than later include laser or optical communications between satellites in space – in other words, how the satellites in these vast new constellations will relay information and data to each other efficiently and securely.
Internet from space is another massively disruptive opportunity – this was seen when Starlink became a crucial tool in the Ukrainian war.
There’s huge amount of EO data and an increasing awareness among non-space companies about the benefits of EO. Technological advancements, lower operating and launch costs, are also encouraging companies to participate in the space industry. Thus governments, scientists, and other end-users must sort through huge volumes of data and intelligence quickly and at scale.
In 2022, AWS collaborated with D-Orbit and Unibap to directly address the secure processing of large amounts of satellite data with low latency. Crosier points out, using AWS-developed AI and ML software models in a payload onboard a D-Orbit satellite, real- time data analysis of EO imagery revealed that it helped reduce image size by up to 42 percent, increasing processing speeds and enabling real-time inferences on orbit.
The Cloud makes designing, testing, running, and analyzing space missions easy and affordable. In the Cloud, users can handle a hundred times more data than could be handled 30 years ago and at a fraction of the cost, with enormous processing power accelerating the innovation we see today. With this, companies do not need to build supercomputers or run data centers for their space programs.
For example, Descartes Labs collects huge volumes of geospatial data derived from satellites, aircraft, and other sources and uses AWS cloud technologies like AI/ML, and high-performance computing (HPC) to store, process, and rapidly analyze vast volumes of raw data, and deliver analysis to customers, which helps them make timely decisions about complex issues such as climate change, food security, and the protection of natural resources.
In the Earth Observation industry, resolution, revisit, accuracy, and pricing are important parameters. Boag & Hochleitner share example, “new constellations such as Albedo and EOI Space are coming onto the market next year and offering resolutions of 10-15 cm. This is the highest native resolution (not resampled) the industry has seen to date.” Maxar will launch Legion this year, offering intraday visits so the customer can get multiple images from sun up to sun down over the same AOI.
In terms of pricing, there are new opportunities for a wide range of industries; with many different satellite options, prices are becoming very competitive and will continue to do so as more and more constellations are launched.
Applications
Application is an area that attracts many service providers. The opportunities are limited only by the imagination and innovativeness of the data analysts. Data analysts can use AI and ML to provide simple, intelligent user interfaces, which can provide insights to end-users in many new fields. The increasing availability and affordability of EO data and services also enable smaller companies and startups to enter the market, increasing innovation and scope of application areas.
3D visualization and the resultant emergence of Digital Twins using high-resolution imagery is the next most important application, which is helpful for war fighter training, autonomous navigation, telecommunications planning, gaming, metaverse applications and more. Frazier highlights that Maxar was selected as the prime contractor for the US Army’s One World Terrain (OWT) program, which delivers 3D terrain and information services that support a fully accessible virtual representation of Earth through the US Army network.
According to Banazadeh, there is a massive growth opportunity for commercial applications across a range of commercial industries that can help social sector, NGOs, civil governments and other organizations make informed decisions and assist with humanitarian and environmental action.
Capella Space has launched vessel detection, change detection, and global change monitoring capabilities directly within their image tasking console to offer their customers automated insights into their collected data. They have also opened the door to commercial partnerships with data analytics companies.
This is seen as a major benefit to enabling faster, data-driven decision-making and for commercial users who might not otherwise have been able to leverage geospatial data.
Undoubtedly, advancements in AI and ML are opening up many new application areas like insurance, financial services energy, shipping, supply chain management, automatic object and change detection over and above the traditional areas like agriculture, forestry, security, etc. Such systems can be used by professionals who may not be experts in geospatial systems but are experts in their domains.
Utilization and development of space is no longer the preserve of the government alone. VCs, and SPACs, along with space associations are playing important roles in the new space era.
Taylor expresses this view when he says, “the set of use cases for commercial users is growing exponentially. A few standout categories are research in biotech, AgriTech, and financial services companies looking at space-based data (like Earth Observation imagery) to predict global markets.”
He further asserts that “a large percentage of the Fortune 100 is actively investing in or at the very least exploring the opportunities that space-based assets can offer from an innovation and competitive standpoint today, and only envision that number growing over the next 5-10 years.”
Financing the future
The drive to innovate both in technology and applications is the realm of innovators thinking out of the box. They are not burdened by legacy, hence can afford a fresh view of space technology and applications. Governments have appreciated the new space drive and provide financial support. They are the main source of funds.
The world is heading for a trillion-dollar space economy – the share of geospatial is about 700 billion dollar – the private sources must step in to reach the target.
Venture Capital (VC) firms are playing an important role in financing the new space companies. They provide seed capital to develop their technologies and market their products and as well as services. VC firms are also playing a pivotal role in identifying new opportunities for growth in the industry and in helping start-ups to navigate the challenges of the new space industry.
“There has been an incredible amount of investment and attention on the new space sector over the last five years, and we’ve seen many companies achieve incredible things, and some others haven’t panned out,” says Taylor. Ultimately, investment in this sector is critical to the future of its growth. Still, it can be challenging for some traditional non-deep-tech VC models because the development cycles are much longer, and their technical sophistication to diligence space-related deals is limited.
While Pajot observes “SPACs (special purpose acquisition companies) are becoming increasingly popular for new space companies to go public. This allows new space companies to raise capital and access the public markets more quickly and efficiently than traditionally.”
Boag & Hochleitner strikes a cautious attitude by noting, “In the last three years, we have also experienced several global crises that have resulted in very high-interest rates and extraordinarily high inflation. Investments in the space sector are steadily declining, and some experts believe we are on the verge of a major recession.”
On the contrary Narayan Prasad, CEO of Satsearch says, “One of the key features of any successful space industry ecosystem worldwide has been the hallmark of governments acting as first customers to risky products/services. This enables their maturity to leverage the fruits of success to scale to markets abroad.”
While government support vary by country, he highlights some best practices. For example, the US government has supported NASA by creating special procurement reforms through the NASA Space Act Agreement.
Another interesting example is the use of Indefinite Delivery Indefinite Quantity (IDIQ) contracts by the defense establishments in the US, such as the Space Force to provide contracts for immature technology products to come to fruition through procurement support based on their utility.
Achieving ubiquity
All the technological developments are leading to a disruption in the space landscape. New entrants in the market are giving competition to traditional companies. They are also challenging the traditional business models by offering new services and creating new markets.
Additionally, these developments are leading to a democratization of access to space data, as smaller companies and organizations are able to launch and operate their satellites, and this is creating new opportunities for innovation and growth in the space industry.
“Because of our global reliance on connected technologies including cell phones, we can no longer live our daily lives as we know it without space. It’s imperative both for our economy and our security, so I think you’ll see all sorts of solutions and organizations getting involved and participating in the space ecosystem,” sums up Banazadeh.
“With all of this opportunity, we see organizations bringing forth innovative and exciting new space missions. At AWS, we work closely with customers to understand their challenges, and innovate to enhance their missions with industry-leading cloud solutions,” says Crosier. However, he also considers the challenges associated with latency, or delay, involved with transmitting space data back to Earth, and operating in a limited bandwidth environment.
Utilization and development of space is no longer the preserve of the government alone. VCs, and SPACs, along with space associations are playing important roles in the new space era. “Associations are playing a key role in promoting the development of the new space industry through activities such as advocacy, education, and networking. They also help to bring together industry players, government agencies, and academia to collaborate on research and development and to identify new opportunities for growth in the industry,” concludes Pijot.
The ever-evolving world challenges and recent geopolitical events have proven how crucial are space-based services and products. The use of space technology for applications that will enhance the quality of life for humankind is on the way to achieving ubiquity.
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