Commercialisation of Space Data
The Space Economy
As national space agencies look towards more challenging space missions beyond the confines of Earth, the private industry has started making their foray into space. Starting with the commercialisation of the Low Earth Orbit, space infrastructure is also being built to further support operations in those orbits, as well as act as a starting point for deep space missions
The success of SpaceX’s Crew Dragon launch is the beginning of what should pan out to be – a golden decade for space entrepreneurship. As the glass ceiling broke, several companies set up shop in and around space over the last decade. Right from launching missions to owning satellites to accessing space data, starting a space business has never been so easy.
A space start-up can now build, design & launch a satellite into orbit with a budget as low as $ 1 Mn!
Commercial Space businesses can be broadly divided into two categories - “internal” & “external “. The “internal” focuses on providing value to consumers back on Earth while the “external” focuses on deep space missions to aid government space agencies - trying to re-define boundaries of what is possible. While the “internal” model has been a proven one over the last decade, the “external” model has been a recent development. Wherein companies like SpaceX and Blue Origin are looking to help NASA in deep space missions, thereby opening up even “deep space” to private companies.
Besides launch companies - massive value and growth has also been captured in the Earth Observation Industry. As a matter of fact, over the last couple of years - multiple-launch companies have built their business models around making small capacity, cheap disposable rockets just to send Earth observation satellites to space. These remote sensing satellites capture the physical characteristics of an area using various types of sensors. Further processing on this data can give rise to use-cases aimed at solving complex business problems to even one-day potentially bettering an average consumer’s life.
The Remote Sensing Opportunity
The Remote Sensing Industry or the Earth Observation Industry is built around capturing and processing data which provides an intelligent assessment of our physical world. While the bulk of the satellites currently in orbit are communication satellites (used for TV, broadband, radio), remote sensing satellites have seen a major spurt in growth over the last couple of years.
There is no denying that this spurt has been on account of decline in launch costs as well as miniaturisation of satellites – further decreasing the overall cost to make & launch assets in orbit. Advancement in sensor technology also allows for data capture with an accuracy of the sub-one meter. Some of these sensors can extract information which goes way beyond the visible spectrum, and some sensors even can capture thermal signatures.
Data collected from these sensors has been increasing in variety, volume, veracity, and velocity over the last few years. Ambitious start-ups in this space are also trying to bring in new sensor capabilities as well as capture data more frequently - to help us decode the physical world even better. That being said, one needs to know that space data itself doesn’t have a value of its own; the real value comes from analysing it.
The insights provided via remote sensing data has many takers - spanning across various industries. For example, commodity traders and investors can estimate the price of oil better by imaging oil fields. Traders and manufacturing companies can accurately predict prices and foresee supply gluts by monitoring major commodity hubs and Agri-input companies can effectively push their products to geographies which have poor crop health.
This business opportunity is at the core of the emerging remote sensing industry. Many ompanies have centred their business models around capturing & monetising space-based (sensor) data.
Companies which started in the first half of this decade; the so-called pioneers of the industry are mostly vertically integrated. They own their data (have sensor-based satellites in orbit), analyse their data and sell it to large enterprise customers. These companies also sell their raw satellite data to other companies - who aim to derive insights from them. These companies focus on innovating the tech behind making satellites cheaper, better, and easier to manufacture. Their strong points are that they have assets in orbit and strong R&D capabilities.
On the back of a somewhat solved data capacity issue - the second half of the decade saw the emergence of young companies centring their business models around analysing this data. These companies leverage ML algorithms and data fusion techniques to derive meaningful insights from space-based sensor data. Companies like these, are usually focussed on finding new and innovative ways to come up with novel business use-cases and provide them to businesses. These companies typically follow an asset-light model wherein they acquire data from big players, process it and try to innovate on finding more business use cases.
Looking At The Future
With data capacity expected to increase on the back of companies sending more & more remote sensing satellites to orbit - space data is going to get commoditised, and its cost shall tend towards zero in the long term. So, while the first wave of investments for this industry came with an intent to set up shop in space, the second wave of investment is expected to flow into companies providing insights to a broader base of audience.
This will inherently make space-based insights more accessible to the masses & will give earth observation companies a lot to innovate on in-terms of B2B as well as B2C use-cases.
Who knows maybe in a decade - governments might even leverage space-based insights to conduct their national census twice a year!
Principal Product Manager @ New Relic | Driving Product Strategy and Growth
4yVery aptly written
Data Scientist | Machine Learning Engineer | User-centric & Interpretable AI
4yLoving the clarity with which all the info has been laid out, looking forward to more such interesting articles! 👍🏻