EO from LEO: Earth Observation Going Mainstream

The amount of innovation and investment around NewSpace has not been exaggerated: 120 venture firms invested $3.9 billion in the industry during 2017 alone. More than 295 nanosatellites were manifested in that same stretch and live streams of launches reached every corner of the internet. Nanosatellites are no longer considered toys; real science and real decisions are being made with data collected by CubeSats.

With seemingly every month a new company raising seed funding for a constellation, it begs the question whether there is a market appetite for so many satellite companies. Imaging and imaging analysis have been the most popular introduction to space products and have helped drive a wider awareness of “alternative data.” Just about every customer segment wants to know and talk about space data — finance, energy, construction, logistics, agriculture, insurance — but talking about it is very different than buying it. Ultimately what customers are willing to pay for are data and insights that help them reduce costs, reduce risk, gain a competitive edge, or drive operational efficiencies. For the NewSpace enthusiasm to bear fruit, the sector must respond with products that customers need. The heavy focus on imaging (especially from freely available sources with a poor revisit), despite capturing the imagination, does not necessarily widen the use cases or broaden the paying customer base with a relevant product. And neither does another satellite constellation that is partially funded and planned for full deployment in 2022.

This confluence of factors is driving the sector toward a necessary maturation. Multiple complementary data types combined together can produce more relevant customer products than any single data type. Investors are starting to realize that the world doesn’t need more satellites per se, but the world needs more and diverse types of data that can all contribute to a holistic understanding of our planet, our resources, our movement of goods, and our communications — all delivered in a way that suits the customer segment. That is what truly makes the commercial potential of New Space so large and as yet untapped.

“What do you want to track from space?” was the provocative question from Data.Space 2018, a conference held each year in Glasgow, which alludes to the connection between data diversity and customer need. NewSpace has largely put the idea of one-off satellites into the rearview mirror. Now the sector seems to be pushing the idea of a one-off constellation behind us as well. Customer interest in new data sets, and the very real need to show returns on all the investment, is guiding the industry away from its period of me-too satellite constellations. We are shifting into a future where a proven constellation acts as a platform for custom data sets, leaving the time and money to focus on customer applications.

Cost has been a major limiting factor for sensor deployment. Now innovations in the value chain and satellite engineering are changing that quickly. Companies and governments are beginning to realize that there is no need to build their own satellite or limit themselves to the commercially available satellite data. The middle ground of an end-to-end hosted payload service, something we call “space as a service,” is the next evolution of NewSpace. Rather than building or contracting every aspect themselves, companies or governments simply need to provide their own sensor and slot into existing infrastructure and processes that have already been built by the leading NewSpace constellations. Just like Amazon initially built Amazon Web Services (AWS) for its internal use and then made the infrastructure available externally with incremental pricing, existing large nanosatellite constellations built the infrastructure for themselves and can now offer cost effective access to it, reducing the time, price, and risk.

Nanosatellite constellations have already amassed several decades of on-orbit legacy for buses and the ground segment has quickly matured. With launch risk spread over many vehicles, the result is the safest and most reliable access to orbit that the industry has ever seen. A decade ago, it took about $1 billion and 10 years to launch a constellation. Today, the advent of nanosatellites has cut that down to around $100 million and three years — still significant. Platform sharing on nanosatellites will bring the cost of launching a global sensor network down by another order of magnitude. This is when the market opens beyond just the leaders and when customers start to be offered solutions that didn’t exist last year; this is when space goes mainstream and when no one even realizes it is a space solution.

The road to more data sets and groundbreaking sensor fusion isn’t without its challenges. Bottlenecks in the supply chain for downstream applications are quite real. Analytics companies have been slow to adopt new data sets, leaving end customers to do much of the analysis themselves. That kind of blockage will need to resolve quickly as not every company or government agency has the expertise to perform the large-scale computational analysis to get the most out of the rapidly increasing types of data coming from orbit.

With eager interest for new types of data, any challenges with analytics or processing will soon be solved. Space as a service will once again redefine how we think about businesses that we never thought would benefit from the world of aerospace. VS