A few years ago, Ursa Space Systems’ first customer called the company with a problem. Ursa had delivered a geospatial data image to the customer, but the customer wasn’t able to open it because the image required too much RAM for their laptops.
“It was really a watershed moment,” says President and Founder Adam Maher. This situation influenced the development of Ursa’s platform, which pulls in satellite imagery and terrestrial-based data from various sources, and synthesizes it into insights for the customer. The customer in Maher’s story, an oil and gas customer, is still with Ursa today.
“We have the ability to buy this imagery, we have the relationships. But we also had the analytic capability that folks want,” says Maher.
Like many other geospatial intelligence companies, Ursa is navigating the gaps between companies in the space industry and their commercial customers who can benefit from images taken in space, but may not understand the difference between Synthetic Aperture Radar (SAR) and optical imagery, or Geostationary Orbit (GEO) versus Low-Earth Orbit (LEO). This is a challenge these space startups have to face in their search to secure commercial customers in a sector of the satellite and space industry that has historically heavily relied on government and defense customers. Companies must meet customers’ needs in a way they are able to easily integrate into day-to-day processes.
“The defense and intelligence community doesn't want us to be just defense intelligence,” says Scott Herman, BlackSky CTO. “They want us to be a viable commercial entity that they can lean on, but not necessarily subsidized. They want to make sure that this crop of New Space companies are able to provide what they need in terms of imagery and monitoring and best in class customer experience, but not be solely dependent upon government contracts.”
Dallas Kasaboski, a senior analyst for NSR, recounts how like many other parts of the space industry, government and defense have primarily supported Earth Observation (EO) because of the cost of satellite assets and launch. As the market has matured, EO companies have branched into high-end enterprise industries like oil and gas, mining, and construction. As the cost to launch and build satellites declines, along with innovations on the ground like Machine Learning (ML) and Artificial Intelligence (AI), collecting and processing this type of data has gotten cheaper, driving a shift from imagery to insights. Now, EO companies can provide intelligence to diverse customers in areas like agriculture, weather, and financial services.
But the market is in transition, and faces challenges of scale, scope, competition, and a lack of standardization in the industry, Kasaboski says. “There's a lot who believe that we are ‘here’ already and that you can download 10 million images and get all this information — but we're not quite there yet. The Earth Observation market is still trying to pivot to widespread adoption and usage, but it's still coming at it and focusing more on enterprise-level solutions,” he says.
Catering to Commercial Customers
Ursa, which does not have its own satellites, but purchases imagery from other companies, was founded to solve cloud storage and user experience issues with satellite imagery. Maher says a challenge was deciding which markets to pursue, as there are so many applications for satellite data. When Ursa was in its early stages, it put together sample analytics, went to conferences for different industries, and did deep customer research across markets like agriculture, insurance, and oil and gas to learn what industries were looking for.
Maher says the company’s customer base is 75% commercial. Many of Ursa’s customers are oil and gas companies as it has specific products for oil, along with customers with global supply chains, and financial institutions. “A lot of times we were the first ones into these markets. We're the first ones able to successfully and reliably deliver these products,” he says.
Planet, an early and major player in the Earth imaging space, has a similar focus on its platform. The EO company has many customers in governments, especially state and local governments. Jim Thomason, Planet's vice president of Imagery Product says the company’s split between the two is about 50/50, and Planet has been working the past few years to expand into commercial markets. Planet has seen success in agriculture and forestry, particularly illegal and commercial forestry monitoring, in addition to supply chain tracking for multinational operations.
Thomason says Planet is working to develop its product in order to monitor infrastructure, and identify macroeconomic trends on a global scale. Planet invests heavily in customer support, to help customers set up the platform for their own imagery monitoring needs, like a choose your own adventure.
“We're trying to really demystify satellite imagery for customers,” he says. “We want them to be able to order a high resolution SkySat image without any expertise. So that is delivered without [the customer] having to understand all the complexity.”
He also says Planet tries to have a sales team with diverse backgrounds that can speak the businesses’ language: “[The sales team makes] sure that we're positioning our products to unlock real business value for them and not get overly focused on the cool space aspect. I think it helps our customers to have someone sitting across the table from them that speaks their language.”
Planet also expands its reach through a program where it partners with companies with specific domain expertise for last-mile solutions. Thomason mentions Planet’s partner European data analytics company Kayrros, which uses Planet’s tools and provides facility monitoring for energy traders.
Another player, Spire has launched over 100 satellites, and currently has 88 on orbit and 12 awaiting launch. The company utilizes its constellation of satellites to solve problems for the maritime and aviation industries, and is particularly successful in weather data. Spire’s customers use APIs that allow them to integrate their own data, and depending on the industry, may track ship journeys for a maritime customer, or monitor frost forecasts for an agriculture customer.
CEO Peter Platzer says Spire has three guiding principles which it calls pillars, which led the company to focus on maritime, aviation and weather. These principles are data can only be acquired from space; the value and resolution of the data increases not with the size of the sensor used, but with the number of sensors used; and the sensors and satellites used are re-configurable via software.
Platzer did not provide a breakdown of government vs. commercial customers, but says Spire has a diverse customer base in terms of industries and regions. He says the company has seen triple-digit growth over the past few years, attributing this success to Spire’s ability to hire the right people, iterate quickly, and stay attuned to customers’ needs and challenges.
“As the applicability of our products is so wide — rarely a week goes by where we don’t identify yet another potential application of our data through a customer conversation or the comment of an advisor. Staying focused and working through these opportunities in a sensible and manageable fashion is critical for us,” he says.
Insights from Military Customers
Some EO companies like BlackSky are targeting defense and intelligence customers first, and then commercial customers with similar needs. Herman says that BlackSky, which focuses on global monitoring, has a customer base that is also heavily defense and intelligence. BlackSky has four satellites on-orbit and is hoping to have eight more launched this year as it works toward a constellation of 24 satellites, which will increase its revisit capabilities to provide customers with global monitoring of a site up to five times per day.
“We're heavily defense and intelligence right now. That's on purpose, that's where the money is, that's where a lot of the early adopters are. That's where you have what you call an educated consumer base. They know what they're looking for,” Herman says. “But as we build our constellation, the goal is to flip that ratio, and within three to five years be predominantly commercial with some very solid, government anchor customers.”
Herman says BlackSky is targeting commercial markets like risk management and supply chain management, where global monitoring is important to the business — customers who want to be the first to know when a change that matters to them occurs.
PredaSAR, which is working to build a constellation of 48 SAR satellites, is taking a similar approach to secure commercial customers, although its business model differs from BlackSky. Executive Chairman and Co-Founder Marc Bell says the company sees its niche in offering raw SAR data captured by satellites built for military specifications, selling to customers who are able to process it themselves, versus customers who want a full analytics suite.
“Instead of building satellites, and looking for customers, we went to the customer first and said — ‘What do you need, and what do you want?’ Then we built the satellite, so they are purpose built,” Bell says. “A lot of people build these large optical satellites and hope people will come. We found our customers first.”
PredaSAR has not yet launched a satellite, but Bell says its customer acquisition strategy has already paid off, and the company has already signed its first contracts, and the constellation will have both government and commercial customers the day it is operational. In addition, the satellites which are built for military needs will have added benefits for commercial customers.
“The beauty of building it with the U.S. military and government in mind is we’re building things to a much higher specification, much higher quality, much more redundancy than you would for a commercial customer. And so commercial people benefit from everything that we’ve done,” Bell said.
The Untapped Market in Big Data
A number of players talk about satellite imagery’s future in the Big Data movement, as financial firms and insurance companies seek out geospatial data to gain an edge. Both Maher and Herman talked about how insurance companies and financial services are in the early stages of wanting geospatial data, which that industry calls “alternative data.”
Herman explains that hedge funds and commodities traders are looking for any sources of non-traditional data to give them an edge in financial trading — a “secret stash” of data that others may not have access to.
“What they're doing is they're trying to mine non-traditional forms of information to see if there are indicators in that data that will give them an advantage in financial trading,” Herman says. “One of the things that's really hot right now in the alternative data world is geospatial data. That's giving us some good entrees into markets where it might not be as obvious.”
NSR’s Kasaboski says that as of last year's forecast through 2028, NSR estimated that Big Data revenues for the services vertical would remain at least two times that of the defense vertical, though defense revenues are growing slightly faster. NSR’s Satellite-Based Earth Observation 11th Edition report, released in September 2019, projects Earth Observation satellite data and services represent a $56 billion cumulative revenue opportunity over the next ten years.
He adds that information products, which combine satellite imagery with other data, like Google Earth, have opened opportunity in this market, and now Big Data analytics has the potential to do the same by extracting insights and business intelligence from imagery, and presenting this information with the speed, resolution, accuracy, and relevance that customers demand.
“Services stand as an opportunity to literally expand the size of the Earth Observation market,” Kasaboski says. “You're not just dealing with the traditional customers anymore, you're starting to deal with Wall Street and other clients who may not have cared in the past for Earth Observation. Now they are interested because of some of the insights you can derive.” VS