Where Do Satellite Manufacturers Fit in the NewSpace Revolution?
A key part of the NewSpace movement is the small satellite. It offers the ability to rapidly innovate and launch new technology within a very short timeframe. How can manufacturers keep up with no compromise on performance and how is NewSpace impacting their thinking?
The small satellite is taking the space industry by storm – but it’s not as if it’s a new thing. Small satellites have been around for decades, yet their recent renaissance is capturing the industry’s imagination like never before. Satellite companies are looking to small satellites to enable the industry to go ‘mainstream’ and make a significant impact in the data market, opening up new markets and revenue streams. So what is behind this explosion in small satellite demand?
Small satellites and nanosats were the preserve of the scientific community in the past, used to pioneer new technology. But as Robin Sampson, a senior member of the business development team at Clyde Space explains: “This usage in turn was a positive driving force which enabled them to evolve more rapidly than previous kinds of satellites and to quickly emerge as a commercially viable solution.”
These solutions have provided a platform for a new wave of space-based applications to flourish, creating significant opportunities and advancement in capability. Sensor and imaging technology has moved on to an impressive extent and today small satellites are capable of delivering extremely high resolution imagery, Synthetic Aperture Radar (SAR), video and communications on a satellite that is as small as 400kg.
The satellite industry has had to reassess its place in the universe. Things have changed dramatically over the past five to ten years with a huge shift towards data-centric demand spurred on by the advent of High Throughput Satellites (HTS). The mobile revolution has changed the way in which individuals consume data and video. Today, high-speed connectivity is in demand everywhere. And then there is NewSpace. The influx of private companies entering the space sector is having a remarkable effect, and many of these companies have turned to the small satellites rather than their much larger, traditional cousins. Companies such as Planet, Spire, OneWeb, SpaceX, LeoSat, and Sky and Space Global are in the process of developing large constellations that will provide connectivity for a plethora of different applications, some established, some emerging. Space has become a field for entrepreneurship, no longer dependent upon funding from the likes of NASA. This is a new, independent space where disruptive technology is being trialled and exciting potential is being unleashed.
The list of applications that can benefit from small satellite technology is growing apace with new markets emerging all the time. M2M/IoT, meteorology, agriculture and environmental monitoring, telecoms and mapping and navigation are all very well served by the smallsat market and benefit greatly from frequent re-visit times.
“We’re seeing a lot of interest for applications where satellite networks communicate with machines on the ground — driverless cars, trains and cargo ships, for example, as well as static devices like remote weather stations in regions prone to flooding,” says Sampson. “Having lots of our satellites on-orbit enables our customers to reach these devices wherever they are, whenever they are, as weather events change throughout the day. Using nanosatellites, we can generate near real-time datasets for almost any imaginable application and at low-cost.”
Drivers for Demand
A number of important factors are driving this interest and growth in demand for small satellites.
The first is cost. Small satellites are cheaper to manufacture and cheaper to launch. Nanosats and smallsats are highly flexible and the technology on board can be regularly refreshed. In comparison to traditional satellites, nanosats/smallsats enable operators to become more agile and responsive to their end user needs. “Rapid volume manufacture ensures the latest technology can be incorporated into the small spacecraft across mission types,” continues Sampson. “Larger satellites take much longer to build and can span years, meaning some technology may be outdated by the time they are launched. A Clyde Space platform can be delivered in six months. These reduced timeframes from order to delivery are a key pull factor, especially for time sensitive missions."
Manufacturers have also been able to standardize their nanosat and smallsat platforms, which rapidly reduces the timeframe in which they take to produce. The constellations currently on the table demand production of satellites in large numbers and manufacturers are adapting to this with a Commercial -Off-the-Shelf (COTS) philosophy. Clyde Space uses components from complementary industries that exhibit characteristics suitable for operation on-orbit. “A great example is the automotive industry that uses components rated for extreme temperature ranges and harsh environmental conditions,” says Sampson.
In addition, smallsat manufacturing, which has long been conducted primarily in-house, is gradually moving towards outsourced manufacturing. Carolyn Belle, senior analyst for Northern Sky Research, comments: “COTS components and additive manufacturing continue to be leveraged to keep prices low and build cycles fast. Development of new solutions, like propulsion or more capable communications systems are changing the way smallsats can be used. Finally, efforts are ongoing to optimize the Size, Weight, and Power (SWaP) attributes of components and subsystems.”
Responding to Customer Needs
Manufacturers must now rise to the challenge of meeting the varied demands of their customers. Customers want their satellites to be deployed rapidly so that payloads may be replaced more frequently and new technology can be brought to market faster. They need access to incremental capacity with reduced capital consumption and less speculation, with relevant payloads that maximize use of available capacity in-orbit. They also want to be able to spread capex over time and offer flexibility to deploy to different orbital slots and to address market uncertainty and changes in market demand.
Manufacturers also need to start thinking about themselves as a one-stop shop. New players coming into the market want to streamline the journey to their end goal and manufacturers need to look carefully at the expansion of current services. “Customers are seeking a full service,” says Sampson. “This includes feasibility studies, consultancy, design, development, integration, testing, through to launch and on-orbit operations”.
Orbital ATK is another manufacturer that is working hard to meet these requirements through reviewing their processes. The company uses standard and modularized architectures, utilizing off-the-shelf hardware and products wherever it can to deliver advanced flexible and adaptive digital payloads. The company is also focused on looking at additive engineering and manufacturing, or 3D printing, which means that there is less waste, easy access to parts and the freedom to innovate. Streamlining of processes and requirements also enables Orbital ATK to reduce the procurement time. On top of this, Orbital ATK is heavily focused on the simplification of processes and is working towards automated, optimized, streamlined assembly, integration and test procedures.
“We expect to see a rise in demand for smaller satellites compared to larger, traditional satellites, driven by rapid changes in market and technology (much quicker than the typical 15 year replacement/expansion cycle). It is very hard to predict or forecast business needs over 15 to 20 year period and commit to significant up-front capital required for larger, traditional satellites,” says Amer Khouri, vice president of the satellite business unit at Orbital ATK.
A Case of Large Versus Small?
So where does this leave the traditional satellite manufacturers? If the industry is favoring small satellites does this mean that the days of the large satellite are numbered? Not so, according to Carolyn Belle. “Some traditional manufacturers are establishing new facilities and processes to go after the smallsat market and capitalize on momentum as the NewSpace movement takes off such as Airbus and SSL,” says Belle. Belle believes that the growth in NewSpace is not necessarily a challenge for the traditional manufacturers as the value of large GEO communications or large LEO Earth Observation satellites are high. However, they will be challenged on price, value of R&D and the pace of manufacturing moving forward.
As previously mentioned, SSL is a traditional manufacturer that is adapting and evolving its own business to accommodate the demand for smallsats. The company does not view the smallsat market as competition to its traditional satellite business as they satellites are used in different ways. Instead, they see it as complementary and they are working to integrate smallsat manufacture alongside their core large satellite business.
“With smallsats you have to consider the market for communications constellations separately from the market for imaging satellites for Earth Observation or Space Situational Awareness,” explains Matteo Genna, Chief Technical Officer (CTO) and vice president of product strategy and development at SSL. “For example, growing demand for observational persistence is driving the proliferation of Earth Observation (EO) satellites. We see continuing demand for both smallsats and large satellites.”
The company is focusing on stripping away processes that had been built up over the years and no longer add value which, in turn, benefits both SSL’s large and small satellite manufacturing. On top of this, in terms of scaling up smallsat production, SSL is ready to invest in new tooling to help streamline the work. Genna continues: “At SSL, we have focused teams that take small satellites from concept to flight. Instead of following previously defined steps they are able to take a more holistic approach and issues such as design for manufacturability just become second nature.”
In addition, Genna also stresses the benefits of experience and the assistance that the company can offer to NewSpace companies. “While we are inventing new ways to meet the needs of new space companies, and always looking for out-of-the-box solutions, there is still a lot to be said for experience. For example we can provide guidance on regulatory requirements, systems engineering, supply chain, financing, and other issues that sometimes can be unexpected hurdles for next space players. SSL really brings together the best of both worlds.”
Amer Khouri believes that traditional manufacturers will need to re-think the way in which they do business. “Just like the new satellite operators are adapting to new market and competitive dynamics by aligning with or building their own constellations and changing their business models, traditional satellite manufacturers will need to also adapt rapidly and be disruptive to fit into the NewSpace movement if they want to survive and thrive,” he says. “The next few years will see a transformation that requires a new mindset and several strategic initiatives to meet future challenges.”
GEO Satellites Matter
Despite the burgeoning demand for small satellites, there still very much remains a place for the traditional GEO satellite within the market, especially for the core industry markets such as broadcast. Demand is fairly stable, despite a few slow years for GEO communications satellite demand, according to Belle.
Marco Caceres, senior space analyst and director of space studies for Teal Group, says that although some traditional manufacturers are looking to provide smallsats, most are set to bide their time before jumping into any smallsat production.
“We don’t really know how the traditional manufacturers are coping with this revolutionary NewSpace market,” Caceres says. “The Boeings of the world, the SSLs, the Lockheed Martins are still not building these small satellites en masse. The one traditional company that seems to have a foothold in this market is Thales Alenia Space that has been awarded contracts to build hundreds of satellites for Iridium and GlobalStar. They are in a good position to take advantage but I’m not sure that the big satellite manufacturers are in a good position.”
Caceres agrees that the traditional market is here to stay for the foreseeable future and that there will still be a fairly lucrative market to produce big $300 or $400 million satellites. However, there will come a point where they will need to make changes. “They will however, need to switch gears if they want to keep up with the trends,” Caceres says. “But the point is that I think a lot of these companies are not convinced that this trend is going to succeed.”
The fact is that no one can possibly know how successful these initial constellations are going to be. He alludes to the early days of Iridium and GlobalStar, where their small satellites were hailed as the next big thing, but never fully materialized.
“If you look back to the 1990s, there was a lot of talk and excitement in the market about smallsats, in regards to players like Iridium and Globalstar, which were seen as the wave of the future,” continues Caceres. “It turned out that it was a wave, but it was a small wave. I think the traditional companies are wary of investing too much money into this market until they see it develop.”
The truth is that this is an extremely exciting yet nervy time for the satellite business, as no one really knows how this will work out. With so many constellations in development, who knows who will succeed in making their vision a reality? This time around, different models are being used, such as SpaceX’s vertically integrated business, and perhaps this is going to be the secret to success. However, there are no guarantees. Traditional companies may be placing a toe in the water in terms of smallsat production, but they are reluctant to commit. After all, it would take huge investment to develop these huge constellations.
So, we wait. Though the smallsat is very much the talking point, can it really eclipse the large, traditional satellite that has been at the core of the industry for so many decades? Is there room for both in the market? One thing is for sure — we are soon to find out.
The NewSpace Launch Conundrum
NewSpace is bringing a big problem with it. There will be hundreds, possibly even thousands of small satellites heading for space, yet there is only a limited supply of launch vehicles to get them there. There are several exciting launch vehicles in development such as reusable designs from SpaceX and Blue Origin to expendable versions from Virgin Orbit, Rocket Lab, Arianespace and ILS. However, most are still very much in the development phase, and with limited capacity on existing systems, this will undoubtedly leave small satellite operators frustrated when they come to launch their assets. This could cause many issues for operators eager to start making revenue, yet left waiting for their ride to space for a lengthy period of time.
This launch bottleneck is well documented. It is all a matter of timing. With the raft of new small satellites proposed, and with companies trying to make their first launches in the next five years, there will still be insufficient capacity to cater for them. Marco Caceres, senior space analyst and director of space studies for Teal Group, says: “There is no way we are going to have sufficient launch capacity to launch even a fraction of all the satellites that are being proposed over the next five to eight years. So there will be a lag, and many of these satellites, if they are already built and ready to be launched, are going to have to wait. My sense is they may not be ready anyway, due to delays. The target launch dates may not be met — but if they are, there will not be enough capacity to get them all up there.”
The road to delivering a new and proven launch vehicle is not an easy one. Caceres emphasizes that it is much easier to build a satellite than a launch vehicle and to launch it regularly. In addition, even if there were many launch vehicles, there is a lack of launch site from which they may be launched from.
The only real and rapid solution, as Caceres sees it, is in reusable technologies. “The only way you can do this relatively quickly is to use re-usable technologies, such as Stratolaunch, where you have an aircraft as the first stage that can be used over and over again and can take off from runways anywhere in the world. If SpaceX is able to reuse its first stage over and over again and launch every week, then you could start to see some hope that many of these satellites can be launched.” VS