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SatelliteFinance: Growing need to simplify shift from data collection to analytics spawns..........

Monday, December 3, 2018   (0 Comments)
Posted by: Randall Barney
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Growing need to simplify shift from data collection to analytics spawns Amazon and Lockheed satellite cloud venture

The satellite data explosion is creating new challenges for the connectivity industry, prompting the creation of a cloud computing business that aims to simplify the flow of data collection to downstream analytics.

Two technology giants, Amazon (NASDAQ:AMZN) and Lockheed Martin (NYSE:LMT), have formed AWS Ground Station to target satellite startups, particularly those in LEO, in a move that could act as a catalyst for new business models.

“We think this will be a strong incentive for space startups, university researchers and more to lower the cost of entry into the market,” a Lockheed Martin spokesperson told SatelliteFinance.

Entrepreneur Jeff Bezos, who is CEO of Amazon, continues to deepen his ties to the satellite and space industry. In October the tech giant and satellite operator Iridium Communications (NASDAQ:IRDM) announced Iridium CloudConnect, an IoT service to offer a process for companies to integrate Iridium’s satellite service with Amazon Web Services, increasing speed to market. He also founded launch provider Blue Origin.

Big data growth

The new service was announced as big data solutions are expected to see sustained growth over the next decade, largely driven by Earth observation and M2M/IoT applications in several key markets.

Indeed, the highest increase in usage across key verticals will be seen in use of satellite imagery for data analytics applications, growing at 23.5% compound annual growth rate through to 2027, according to Northern Sky Research.

Picking up on this trend, Orbital Insight acquired artificial intelligence specialist FeatureX in September for an undisclosed amount. Specialising in satellite imagery, FeatureX uses computer vision and other machine learning technologies to discover patterns in data, including object detection and image enhancement.

In addition, M2M communications and IoT technologies are also expected to contribute a significant portion of the revenue opportunity. Some 54% of M2M/IoT applications and 46% from Earth observation (EO) applications will make up satellite-based big data analytics by 2027.

Digitisation strategies and rapidly developing machine learning in EO are helping drive adoption, as satellite players look to capitalise on this shift amid innovations in business models. Also, richer sensing capabilities have allowed for growth in a variety of EO-based datasets.

Overall, big data analytics via satellite is expected to generate close to US$18.1bn in cumulative revenues by 2027, NSR said. That is a 14% increase from the US$15.8bn by 2026 that the group previously predicted. Satellite big data analytics alone will reach close to a US$3bn opportunity.

Transportation, energy and general enterprise account for nearly two-thirds of demand for big data analytics. Government users represent nearly 27% of revenue.

Smallsats are fuelling a lot of the growth of big data as forecasts point to more than 3,000 nanosats being launched over the next six years.

Earlier in November, 21 geospatial industry leaders launched the World Geospatial Industry Council, which aims to create business opportunities for the sector and to advance its role in the world economy.

“These movements indicate an industry beginning to shift in its understanding and use of the data it generates, not just as a product/asset to be provided directly, but as a substrate to the larger business ecosystem of its customers,” NSR said.

AWS Ground Station basics

As onlookers consider the implications, AWS Ground Station involves on-demand cloud computing by Amazon Web Services, which reportedly generated US$16bn in revenue in 2017.

Amazon has two ground stations in the US, with plans for 12 to be completed around the world by mid-2019, an Amazon spokesperson said. Lockheed Martin via its Verge service would provide a downlink network of 12 ground-station antennas around the world.

Lockheed Martin and Amazon declined to reveal development costs.

The services are funded separately, the Lockheed Martin spokesperson said, with the defence titan paying for the capital and operating expenses to build, deploy and maintain the Verge network. The same is true for AWS and its ground stations.

Simplicity is key. Once customers receive satellite data at a ground station, they can process, store and move it. They can also apply analytics and machine-learning.

There are other advantages, as AWS Ground Station’s interface identifies antenna locations and communications windows and schedule antenna time.

Pricing has not been finalised, the spokesperson said, but customers will pay by the minute for antenna time.

The size and scale of the deal will inevitably stir concerns that teleports lose out, said Robert Bell, executive director of the World Teleport Association (WTA). “I have received one comment expressing worry that this portends a trend where teleports become ‘landlords’ of satellite antennas, rather than value-added service providers,” he said.

The upbeat side of the same point is that this deal validates the role of satellite connectivity in cloud services.

“I would expect this move to generate as much new activity as it removes potential business from the market,” he added.

Indeed, the Amazon-Lockheed Martin business points to potential partnerships with teleport operators.

Major cloud services, including Amazon and Microsoft’s (NASDAQ:MSFT) Azure, offer other enticements, such as structured partnerships, that reward teleport operators for acquiring competencies and bringing them business, according to a recent report from the WTA. In return, they offer value-added software solutions, access to cloud-based products and the opportunity to market services through large sales forces.

Media-focused teleport operators see the value of providing their own cloud services as well as integrating third-party providers, according to the WTA’s Teleport Opportunities 2018 report in January. It found in a survey of 30 teleport operators that nearly 90% plan to invest in cloud services, either their own or by integrating third-party services.

Non-media-centric operators see value mostly in third-party integration as almost 60% plan to integrate third-party service, the survey found.

Satellite data leaders

Several satellite operators are making forays into analytics. DigitalGlobe, BlackSky, Spire Global and other operators are customers of the AWS Ground Station service.

It is already working with Spire Global to build out and test the system, the spokesperson said. The company is also working with several government customers to assess their needs.

The service will be able to support a variety of satellite operators, including those in GEO-sensing, imaging and media.

Other industry players have begun to recognise the potential of big data.

In July Planet launched a business that provides imagery analytic feeds. Planet Analytics will leverage machine learning to transform global, daily satellite imagery into information feeds that detect and classify objects, identify geographic features and monitor change over time.

Finland-based imagery provider Iceye in April announced an agreement with US-based analytics provider Ursa Space Systems to monitor oil wells and measure global oil storage, deriving actionable oil demand insights for customers.

And late last year M2M satellite operator Orbcomm (NASDAQ:ORBC) acquired for an undisclosed sum telematics-solutions provider Blue Tree Systems of Ireland to provide transport management solutions.


Craig Barner is Senior Financial Journalist for SatelliteFinance. A journalist for 25 years, Barner previously worked for Mergermarket, a digital newswire covering mergers & acquisitions and related topics.





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