Unlocking the Potential: Reimagining the Commercial Remote Sensing Market
During the GEOINT Symposium 2023, I was struck by the sheer number of commercial remote sensing providers, many with on-orbit capabilities. This, coupled with the diverse spectral phenomenology on the horizon, gave me pause. I began to think about the obstacles hindering more rapid growth and market expansion in this vital industry. I've been pondering how the commercial remote sensing industry, despite its impressive growth, seems to have hit a plateau. We see limited widespread adoption in the Intelligence Community and shockingly limited use within the Department of Defense. I believe freedom of access and high costs are the primary culprits.
Following events like the demise of FIA and the subsequent delays, a crucial study, led by the National Geospatial-Intelligence Agency (NGA) in coordination with the Director of National Intelligence, the Under Secretary for Intelligence, the National Reconnaissance Office, and the Joint Staff, highlighted a critical need. The strategic decision was made to invest in viable commercial remote sensing capacity and capabilities. This was driven by three core principles: fundamentally, to gain a strategic global advantage in capacity; secondly, to be the world leader in capability and access; and most importantly – to establish a sustainable capacity within the nation to retain a workforce capable of producing the world's finest remote sensing satellites.
The development requirements focused on global coverage supporting unclassified mission areas primarily for the Department of Defense. While driving use and utility to commercial verticals for commercial sustainability was always the long-term vision, the initial acquisition strategy was large, expensive, and cumbersome. It notably included management (or control) of access to content via NGA's SOURCE Management – necessary at the time to arbitrate and exercise access due to budget and contract limitations. In essence, arbitrary management of contract execution became the management of access to commercial data.
Over time, this initial investment, while envisioned to support the DoD in a larger, separate fashion, was never truly scaled to support all associated mission areas. Resourcing has almost entirely been captured within the National Intelligence Program (NIP). Moving to Defense-wide accounts could be considered, but this requires a significant change in how we manage access. This has a significant negative effect on the access of commercial remote sensed data for the warfighter – the absence of budget allocation limits dynamic access. If I were still managing efforts (resourcing, access, use), I would be unlikely to want to work in an environment where NGA controls Naval budget, access, and mission support. It's just not an efficient or effective model.
A recent exercise in South America, where Space Systems Command supported U.S. Southern Command and their partners, demonstrated yet again the critical need for commercial remote sensed data. While ultimately successful, the exercise highlighted the need for change. Why was SSC needed to support the command and exercise? Where are the Service’s experts and access at the echelon units that support the unified combatant commands? The military fights as it trains, and these artifacts continue to impact readiness. We need to empower those closest to the fight with the tools they need.
By 2015, commercial capacity (both organic US companies and those overseas) had increased in constellation size, access, and coverage by orders of magnitude. Yet, commercial applicability has not significantly increased, even as use and apparent demand have risen. Part of the issue, I believe, lies in the need to re-factor the executability of the commercial and government markets from a macro-economic perspective. The bottom line is that much of the potential commercial market has been priced out due to the inflated value driven by US Government procurement/acquisition models. These models drive high prices and simultaneously limit user adoption. Simply stated, if the government (US) resourced (budgeted) for commercial data from a Defense-wide perspective, rather than a limited Intelligence Community perspective, the price per image or access would decline, amortizing the value and creating a price point where commercial adoption would rapidly increase, essentially baselining the cost. This would be a game-changer.
Budget, as with most things in government, reigns supreme. Even requirements are driven by physical materials, feasibility, cost, schedule, and performance – it drives everything. Authority, joined by budget, then drives ‘strategy,’ acquisition strategies, procurement strategies, delivery strategies, and ‘who gets to decide for everyone.’
If we were speaking to the development, building, launch, operation, and use of capability by and for the USG – this would make perfect sense for classified government-owned and operated capabilities. In fact, we need the government to focus on these areas. However, we are discussing the open procurement of commercial capabilities. At this point in the life of commercial imagery (EO and SAR), I would have expected major shifts in the methods, authorities, and funding of what should be a consumable commodity. Some will still argue the case for the status quo. In the end, I hope the primary drivers become access, use, and adoption. Costs of commercial imagery continue to remain high. Some believe this is due to development, the long lead time to build, and then there are launch costs, while actual operations appear lower.
Perhaps there is another, more arbitrary reason. Government control of access, additional layers of procurement, government oversight, and regulations could be significant factors contributing to significantly higher rates with limited distribution of access. The pricing established by the government becomes the de facto commercial rate.
These artificially inflated costs likely inhibit adoption. Amortization of cost can be a critical factor that could significantly broaden adoption, which in turn would drive costs down. At this stage in the overall timeline of commercial imagery, market forces and widespread adoption should have had an impact on cost, driving it to an amount that democratizes access for many.
In today’s market, each piece of data is handled and distributed as if it were gold (because the price certainly indicates it might be true), so licensing and distribution are tightly controlled. Now imagine an environment where a soldier or sailor – or a farmer, or an employee investigating a power or gas line – could download (even if the need is fleeting) an image for $5 or $10. Downloads would certainly increase exponentially. Additionally, commercial customers would also adopt more ‘casual’ use and download access because of the price point. Considering imagery data like a consumable, like paper, electricity, or gas, would be a great step toward shifting the macroeconomics of our industry.
These changes in the cost models could have a significant secondary impact on associated technology markets, such as analytics, AI/ML, application-based tool expansion, and some we have yet to even envision. A more accessible market would spur innovation and create a whole new ecosystem of geospatial tools and services. The future holds more and more diversity of phenomenology, spectrum, and capacity, which will only strain against the current antiquated model, requiring even more flexible procurement models. To ensure the growth and continued investment, procurement models, resourcing, and budgeting must keep pace with development and demand.
I am not suggesting an overnight shift – though that would be fantastic – this is an effort that will take careful consideration and planning. Timelines, budget carryovers, and account shifts – from acquisition-based to procurement-based, and (within DoD) potentially Defense-wide accounts – will require oversight and forward thinking. But the true ‘release’ across the economic markets could be the momentum to widespread adoption and use, finally enabling the full promise of global insights.
In conclusion, to unlock the full potential of the commercial remote sensing market, we must reimagine the way we approach data access, procurement, and utilization. Democratizing access through innovative licensing models, embracing a consumer-based approach, and fostering collaboration across sectors will not only drive down costs but also ignite innovation and create a thriving ecosystem of geospatial tools and services. It is time to move beyond treating commercial imagery as a scarce commodity and instead embrace its transformative power as a ubiquitous tool for understanding and improving our world.
