The Big Impact of Big Data
Satellite big data services are undoubtedly a growing market. A digital transformation across customer verticals has translated into new business opportunities for satellite operators and service providers, driving adoption of cloud computing at different layers of the satellite big data supply chain. Additionally, a market for analytic solutions that simplifies raw geospatial data to consumable business applications has formed around niche customer needs, from video feed analytics for mining majors to crop monitoring solutions for Big Ag. This entire satellite big data market, across both commercial and government solutions, is forecast in NSR’s Big Data Analytics via Satellite, 5th Edition report to represent a revenue opportunity of more than $3.5 B annually by 2030. Such growth makes the market landscape picture difficult to paint with a plethora of players vying to shine. So how will it have such a strong development role for the industry?
Big Data to Spur Big Changes
Satellite data analytics companies are by now a relatively established ecosystem: they once existed in the ether somewhere between space companies (with on-orbit assets) on one side and geospatial mapping organizations and IT/data analytics firms on the other but grew into their own segment in recent years.
Their USP is an ability to work with and transmute raw satellite data into customer-focused services and are positioned much closer to the satellite data/comms provider than other traditional mapping or analytics firms. They were expected to bring the ethos of big data, machine learning and cloud computing into an otherwise old school industry, leveraging the best of all worlds. And they have, to their credit, helped spearhead a much-needed transformation in the satellite industry. Over the last few years, they have grown in number significantly, forming a heavily fragmented market of platforms, services, and applications.
On the heels of this digitalization trend, the satellite industry has caught up on the corporate sustainable governance front, and in particular, the Environment, Social and Governance (ESG) movement. In 2021, ESG and sustainability became a recurrent theme in the PR and marketing efforts of various companies in the satellite sector, not just those related to satellite data.
Big Data to Solve Big Environmental Problems
Following the publication of the Sixth Assessment Report of the IPCC in August 2021, as well as the 26th UN Climate Change Conference later in the year, there has been significant news and media interest in the climate discourse, trickling also into the satellite sector. The industry has rallied behind the idea that investor dollars are flowing into climate risk related applications and solutions, with significant returns to be made from the same. High profile space SPAC entities too have not been immune to this: the investor presentations from Planet and Satellogic, for instance, make repeated references to the sustainability transformation and the role that satellite can play going forward.
This is not without cause: government agencies the world over have to put forth proposals and regulations that, directly or indirectly, touch upon environmental change. In November 2021, the European Commission published a proposal for a regulation on deforestation-free products. Complementary to the initiative on sustainable corporate governance (SCG), it focused on due diligence exercises to minimize the EU’s impact on global deforestation and forest degradation.
Throughout the past year, the U.S. Securities and Exchange Commission increased its focus on ESG and climate related disclosures, practices and investments. Multiple capital markets in Asia too have begun to shine a light on ESG assets: from India with its framework to regulate ESG Ratings Providers (ERPs) to Japan’s new wave of ESG investments.
While there are numerous reporting practices and standards that exist for the Social and Governance aspects, the Environment aspect of ESG has significant data gaps that make regulation a challenging task. This is where the current interest in satellite big data falls: solutions that provide a view into various supply chain dependencies that might otherwise be difficult to track. With continuous monitoring over areas of interest, high frequency global coverage and a variety of different space-based sensors and IoT solutions, satellite big data is one amongst the many solutions that can address this gap effectively. Or that is the promise, at least.
Big Data for Big Money?
Climate risk and ESG investments have thrust satellite big data into the spotlight, more so than before. There is much debate on what ESG itself contains and represents, given that it means different things to different stakeholders. However, what can be agreed upon is that this spotlight has also kindled the interest of investors from other parts of the space supply chain, each vying for a share of the market.
Satellite operators have already, for a few years now, dabbled in developing analytics solutions, initially competing directly with, and eventually becoming a part of the satellite big data market. A few years ago, two of the leading satellite EO data providers rolled out their own data services platforms but were perhaps a little too ahead of their time.
More data suppliers/operators followed suit, many of them launching downstream analytics pipelines and platforms while continuing to sell data in parallel. Others moved to developing alternative delivery channels, either via horizontal or vertical partnerships and acquisitions. What began as an “app” based movement solely focused on bringing a fresh perspective to existing business problems across verticals expanded to include more “platform” based services, and eventually, marketplaces. Satellite big data players have also realized the tremendous marketing potential in adopting and proclaiming ESG related goals, as it drives further interest from the investor community into satellite data and its applications.
On the demand side, customers that so far depended on external consulting organizations and platform service providers for their satellite data and analytics needs are keen on absorbing expertise. Energy majors have ramped up on hiring geospatial data scientists, and other traditional satellite big data customers have pushed to acquire and merge with satellite big data companies: such as Tellus Labs (by Big Ag) and Bird-i (by real estate advisors), for instance.
Marketplaces are taking shape to bring in much needed standards, attempting to bundle all the complexities of buying satellite data services behind an API and third-party data exchanges. The entrance of cloud computing majors further validates this downstream market and makes a stronger case for satellite data commoditization.
The line between supplier and customer at different layers has only gotten more blurred. The satellite big data market by itself is headed toward the next stage of its evolution, as it gets absorbed further by other parts of the value chain, leading to consolidation across the stack.
The Bottom Line
Satellite big data is present in the market in various forms: from platforms and specific apps that are dime a dozen to most notably, analysis ready data (ARD), the industry’s latest catchphrase. It is telling of the history of this market that the now defunct webpage of one of the first large scale satellite data platforms redirects today to the company’s ARD page. In a sense, it has evolved in any direction possible.
Customer friction persists, but as more companies look toward climate-tech and ESG solutions across the board, it is expected to decrease. The satellite big data ecosystem has only begun to make inroads into interesting use cases and customer verticals. Going forward, further business model innovations are expected. Access will get easier, and data will get cheaper, but not as fast as one might hope. Commoditization then, will remain in the distance, downstream of market verticalization and such diversification. However, it is quite likely that in the end, Big Data analytics' big impact on the satellite market will have lasting effects for years to come.
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