Race to Space

Companies from different sectors are rushing to send satellites into space. Disruption and dynamism are the order of the day. "Space data as a service" is a key market trend that drives verticalization in the industry.


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769 active satellites were orbiting the Earth in 2000. By 2030 there will be more than 50,000.Getty Images

How well were the Covid-19 lock­downs in the spring of 2020 actu­al­ly fol­lowed? Views from space pro­vid­ed an answer to this ques­tion. Launched in 2017, Europe’s Sen­tinel 5P Earth obser­va­tion satel­lite showed sub­stan­tial reduc­tions in nitro­gen oxide con­cen­tra­tions over major cities like Paris, Madrid, and Rome—corresponding to the slow­ing down of pub­lic life in the EU. Less traf­fic meant fewer emis­sions and there­fore less air pol­lu­tion. The pre­ci­sion of the data is lit­tle short of mirac­u­lous. From an alti­tude of more than 800 kilo­me­ters, Sen­tinel 5P mea­sures light across a 2,600-kilometer swath of the Earth­’s sur­face in one sec­ond. It also mea­sures seven kilo­me­ters ahead in the direc­tion of flight, for it moves at a speed of near­ly 28,000 km/h—or 7.8 km/s. As it turns out, it has also pro­vid­ed Earth-bound pol­i­cy mak­ers with infor­ma­tion about the effec­tive­ness of their anti-Covid measures.

But arti­fi­cial satel­lites are not only use­ful for ana­lyz­ing pol­i­cy deci­sions. They and their data have become a part of every­day life, with an appar­ent­ly lim­it­less range of appli­ca­tions. “There would­n’t be any con­nec­tiv­i­ty on Earth with­out space,” says Elodie Viau, Direc­tor of Telecom­mu­ni­ca­tions and Inte­grat­ed Appli­ca­tions at the Euro­pean Space Agency (ESA). “There would­n’t be any nav­i­ga­tion, secu­ri­ty, or traf­fic safe­ty sys­tems. Space is the heart of all our con­nec­tiv­i­ty and mobil­i­ty systems—and the engine for quan­tum leaps in inno­va­tion toward what will become seam­less­ly inte­grat­ed, super-intel­li­gent, and high-per­for­mance hybrid infra­struc­tures.” Ms. Viau is one of eleven top experts from lead­ing Euro­pean avi­a­tion and aero­space enter­pris­es whom Porsche Con­sult­ing queried about the future of the indus­try in Europe.

Satellite phones and GPS are standard. In the future, satellite data will support autonomous traffic, and prevent accidents and disasters.Porsche Consulting / Florian Müller, GettyImages (9), iStock (7), Alamy (2), imago (1), picturealliance (1), NASA (3), ESA (2), IBM (1)

Hunting drugs and tax evaders

The satellite age began with Sputnik on October 4, 1957. A few years later satellites were already being used to monitor the climate and predict weather. In the mid-1980s Motorola developed the Iridium system for global communications. By the mid-1990s the most popular services included GPS, Galileo, GLONASS, and Beidou, which enable such advances as navigation systems in cars. Today, services from space are used in nearly all areas of our lives: examples include satellite calls from remote areas, credit card payments, TV shows, and Internet access on cruise ships and planes. Earth observation satellites provide rapid imaging of natural disasters and accidents. When the Ever Given container ship blocked the Suez Canal this past March, satellite images showed the growing line of nearly 400 ships on an hourly basis, letting shipping companies opt early on for a detour around the Cape of Good Hope. "Satellites already have enormous capacities to monitor the Earth—and the availability of space-based data will continue to rise as a result of innovative technologies and start-ups," says Dr. Arne Gausepohl, Managing Director of OHB Digital Services GmbH. "The data enable decision makers in government and business to efficiently and independently assess negative effects on the global economy, for example, or maritime incidents like the recent one in the Suez Canal." Police forces and administrative bodies are also making use of the eyes in space. During the Greek debt crisis, the country's tax authorities used Google Earth to find unregistered swimming pools in their search for concealed wealth and luxury tax evaders. Investigators in California have their sights on illegal cannabis farms. Plans call for satellites to monitor the oceans with the aim of ending illegal fishing. Earth observation is the focus of Maxar Technologies and Planet Labs, two US-based companies who offer their customers high-resolution images of traffic flow patterns, military vehicle movements, and the effects of natural disasters. Established space actors like ESA and its Copernicus program also monitor the planet for purposes such as measuring atmospheric concentrations of CO2. Space-based communications will become very important in the coming years as projects and companies like Starlink and OneWeb seek to ensure Internet access in the remotest parts of the globe. Satellite data will also benefit mobility. Connected cars will have broadband Internet everywhere and at all times, enabling over-the-air (OTA) updates of their operating systems and letting drivers activate higher performance or extra services like automated driving on demand. Highly accurate maps will make driverless cars safer. Precision location of landmarks like lamps and traffic lights along streets will help cars determine their own positions and calculate distances to other moving objects more exactly. Because traffic and the associated rules on oceans are less complex than on roads, crewless ships might soon by plying the seas and ushering in an era in which "all things are autonomous"—controlled by artificial intelligence and monitored via satellite. Accidents like the blockage of the Suez Canal might then be prevented. "Thanks to a combination of satellite navigation and autopilot systems, ships could find their own ways through canals or into ports in the future," reports Dr. Ralf Ziebold from the Nautical Systems group at the German Aerospace Center (DLR), who works on precision ship localization. "Control software should be able to reliably master the complex dynamics of large ships and prevent human error like the incident in the Suez Canal," he says. But localization systems would then need to be accurate down to ten centimeters, whereas navigation systems in cars today can be off by up to ten meters. To achieve the requisite precision for automated control, canals and ports would have to be equipped with reference stations. With precisely known positions, these stations would considerably increase the accuracy of satellite navigation systems by means of corrective signals to the ships.

New satellites—lightweight and low-priced

Around the world, estab­lished com­pa­nies and start-ups alike are work­ing on new appli­ca­tions and devel­op­ing inno­v­a­tive busi­ness mod­els. “The race to space is under­way, with dif­fer­ent man­u­fac­tur­ers and oper­a­tors launch­ing ever more satel­lites every year,” says Joachim Kirsch, Senior Part­ner for Avi­a­tion and Aero­space at Porsche Con­sult­ing. That was hard­ly con­ceiv­able until just a few years ago. The satel­lite busi­ness and access to space were con­sid­ered the realm of gov­ern­ments and their space agen­cies. But this has changed, for a num­ber of rea­sons. As Kirsch explains, “Cost-effi­cient small-scale satel­lites, some of which have a mass of well under 100 kilo­grams, are enabling rel­a­tive­ly eco­nom­i­cal access to space.”

They are joined by new launch sys­tems that carry pay­loads for a frac­tion of pre­vi­ous costs. “Small launchers—just like small satellites—will become an inte­gral part of the space econ­o­my,” pre­dicts Chris­t­ian Schmier­er, Co-CEO of the Ger­man start-up HyIm­pulse, in con­ver­sa­tion with Porsche Con­sult­ing. “They’ll func­tion like taxis by send­ing indi­vid­ual satel­lites quick­ly, direct­ly, and com­par­a­tive­ly cheap­ly into the desired orbits. That will enable rapid replace­ment of sin­gle satel­lites in larg­er constellations.”

Porsche Consulting / Florian Müller
The size and weight of satellites have steadily decreased in recent years.Today they weigh an average of around 250 kilograms. That meansmore and more launches. In 2020, 1,183 satellites circled in low Earth orbit.Porsche Consulting / Florian Müller

Just one rocket for 60 satellites

Space is bustling with activity. In late April of 2021 nearly 4,100 active satellites were orbiting the Earth, with more arriving at an unprecedented rate. Nearly 1,300 new satellites were launched in 2020 alone—the highest number in space history. By April of 2021 they were joined by about 850 more, so this year too is on a record-breaking course. An especially active player is Starlink, the constellation operated by SpaceX, which had sent approximately 1,800 satellites into space by May of 2021. Most of the active satellites are from the USA (around 2,500), China (around 430), and Russia (around 180). The majority are in low Earth orbit (LEO), meaning an altitude of 200 to 2,000 kilometers. LEO currently has more than 3,300 satellites, including the International Space Station (ISS), Iridium's communication satellites, and numerous spy systems. LEO is also where most of the new satellites are sent—1,183 of them in 2020. This invasion of space was made possible by a dramatic reduction over the past decade in satellite size and weight. They no longer weigh an average of several tons, but instead only about 250 kilograms. This means entire flocks can be sent into orbit by a single rocket at a favorable price. Starlink, for example, shoots up to 60 satellites into space with one Falcon 9 rocket—twice a month on average. Their number could reach 30,000 in the next few years. Criticism is on the rise, because more satellites mean a greater likelihood of collision. Already a problem for satellites and space stations, uncontrolled waste could become markedly more serious in a few years due to projects such as Starlink. There are currently no binding international regulations for the disposal of inactive satellites. The ESA at least is planning to start removing failed satellites and larger pieces of debris in 2025 as part of its ClearSpace-1 mission. A specially designed spaceship will approach the debris, secure it with robotic arms, and bring it down into the atmosphere where both will promptly burn up.

Small satel­lites and launch­ers have trig­gered ever greater dynamism and dis­rup­tion in the indus­try. Hun­dreds of start-ups, along with com­pa­nies from other indus­tries, are crowd­ing into the mar­ket and set­ting up shop in niche areas along the entire value chain with new busi­ness mod­els, tech­nolo­gies, and appli­ca­tions. In July 2021 alone, two companies—Astra Space and Plan­et Labs—were list­ed on the stock mar­ket with val­ues of over a bil­lion dol­lars. The poten­tial for prof­it is high, with indus­try sales expect­ed to reach 1.4 tril­lion dol­lars in 2030, up from 400 bil­lion in 2019. Among other things, the new­com­ers promise an unprece­dent­ed pace in mov­ing into space. “Speed and sim­plic­i­ty are key,” says Pierre-Damien Vau­jour, CEO of the Loft Orbital Solu­tions satel­lite ser­vice provider, in con­ver­sa­tion with Porsche Con­sult­ing. “There will always be projects for very sophis­ti­cat­ed end users that run for five years under strict super­vi­sion and cost half a bil­lion euros. But there are ever more users in the defense, research, and com­mer­cial sec­tors who view space sim­ply as a source of ser­vices and want to be there in nine months.”

Finding and forming successful business models

The most lucra­tive seg­ment of the satel­lite mar­ket is what is called “space data as a ser­vice,” or the sale of data to end cus­tomers. “My top mega­trend is real-time Earth obser­va­tion, because it gen­er­ates con­tent that sets entire value chains into motion instead of sim­ply trans­port­ing other people’s data,” says Marco Fuchs, CEO of the north­ern Ger­man aero­space sys­tems provider OHB SE and its sub­sidiary OHB Sys­tem AG. OHB’s Dig­i­tal busi­ness unit is active in space data as a ser­vice, offer­ing its cus­tomers the abil­i­ty to track ship move­ments in close to real time, for exam­ple, or the lat­est cli­mate and envi­ron­men­tal data.

Porsche Consulting / Florian Müller
Offering „Space data as a-service“, more and more companies are involved in the value chain in the satellite business, from the construction, launch and operation of the satellites to the processing of the resulting data.Porsche Consulting / Florian Müller

Data mean sales

The value chain in the satellite business used to be divided up in large part among the launch rocket manufacturers, satellite producers, satellite operators, and service providers. These boundaries are becoming increasingly porous. A trend toward verticalization is becoming more pronounced as companies cover multiple steps in the value chain (e.g., satellite construction, launch, and operation as well as processing the resulting data) and offer their customers complete "space data as a service" packages. The motivation is clear: more than 90 percent of sales are customer-oriented, such as the provision of data. Moreover, manufacturers can avoid becoming dependent on the satellite business with its sporadic ordering cycles, and instead enjoy continuous plannable sales on the basis of, e.g., monthly subscriptions. For their part, customers are not eager to deal with the challenges of space; they simply wish to make use of the data—and are willing to pay a surcharge for the complete service. "It's strategically and structurally advantageous in my opinion to make business models broad enough to cover the entire value chain and offer everything from a single source," says OHB CEO Fuchs. OHB and Airbus group are two of Europe’s most prominent providers in this field. Airbus offers proprietary satellite imagery and geodata analyses to its customers, which include defense, security, and intelligence agencies. OHB also offers space data as a service from its OHB Digital business unit, with satellites expected to provide data on climate change and pollution, or for fishing and farming. In addition to major players on the European market, smaller and lesser-known satellite makers like GomSpace and AAC Clyde Space are also broadening their activities. AAC Clyde Space, for example, wants to launch and operate three satellites in 2022 that will help the Canadian Earth observation company Wyvern support the agricultural sector in optimizing harvests and monitoring fields for harmful plants and animals.

The break­through in the satel­lite indus­try is still in its early stages. All play­ers have the chance to posi­tion them­selves favor­ably in this growth mar­ket. Porsche Con­sult­ing has been advis­ing clients for more than ten years in the avi­a­tion and aero­space sec­tor, and sup­port­ing them in the race to space. Its spe­cial­ties include choos­ing the right busi­ness mod­els and basic mar­ket posi­tion­ing such as ver­ti­cal inte­gra­tion along the value chain. Its experts also guide end-to-end indus­tri­al­iza­tion. “On the one hand there are con­sid­er­ably more satel­lites, yet on the other hand they have to be pro­duced in short­er devel­op­ment cycles and show con­sid­er­ably greater flex­i­bil­i­ty,” notes Kirsch. “This requires an indus­tri­al­iza­tion process along the entire prod­uct life cycle,” he adds, “from prod­uct engi­neer­ing to after-sales services.”

The con­sul­tants can also work with space com­pa­nies to check the eco­nom­ic via­bil­i­ty of pos­si­ble appli­ca­tions for space data as a ser­vice, in order to iden­ti­fy promis­ing strate­gic use cases. Thanks to their broad client base, the experts have a sound grasp of the poten­tial added value of space data in dif­fer­ent indus­tries. “It’s cru­cial not to be mis­led by hype,” notes Kirsch. “The busi­ness model has to be right—that’s the only way to be suc­cess­ful in the race to space.”

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