Global Commerce in Small Satellites: Trends and New Business Models

28th Annual AIAA/USU Conference on Small Satellites August 4, 2014 Paper SSC14-I-2

Robert H. Meurer Seah, Peng Hwee VP, Business Development, Commercial & International Programs Vice President, Space Systems ATK Aerospace Group; Space Systems Division ST Electronics, Satcom & Sensor Systems Technical Chairman Emeritus, AIAA/USU Conference on Small Satellites

(Non-Export Controlled - ATK IPWG Approval 643)

Empowering thru’ Innovation Innovation…Delivered The Abstract Becomes Reality

“New business opportunities, rising demand for satellite based services, and particularly emerging nation markets have sparked the imagination of established providers and new space entrepreneurs to capitalize on the unique abilities of small satellites in bringing to market new businesses or government services.” “The collision of a Silicon Valley business philosophy coupled with the continued miniaturization of space technologies has given birth to a fresh set of New Space businesses, some of which have generated significant buzz in the venture capital community.” When I submitted the above abstract, I could not have known just how quickly the state of the market would be changing today – well at least not precisely • How many here would have predicted that we would be spelling small satellite this way?

August 4, 2014 1 New Space Entrepreneurs and Niche Applications

The Google acquisition was itself enabled by another revolution in our industry – the move by certain entrepreneurial “New Space” companies to create constellations of earth observation small satellites In 2006 I opined: “...small and micro-spacecraft have demonstrated an ability to provide high quality imagery at a cost per square kilometer that rivals (if not improves upon) the cost of imagery from the large imaging systems. Moreover, small satellite systems offer advantages that uniquely set them apart from the large systems.”  “Key Challenges and Opportunities After a 20 Year History of Promoting Small Satellites,” Robert H. Meurer, The 4S Symposium, Chia Laguna, Sardenia; September 25, 2006 No more compelling example of this fact can be offered than the entrance of Skybox Imaging to the commercial marketplace with the launch of SkySat-1 on November 21, 2013.

Joining Skybox in the pursuit of “New Space” markets are numerous firms looking to capitalize on the demand in established or unique niche markets

May 26, 2014 2 Constellations are in Vogue

Planet Labs raised $65M GeoOptics and PlanetiQ Dauria Aerospace is (est.) in venture capital GPS-RO constellations that pursuing a new generation • Business model is based on seek 1st to market status of low cost, small satellites an earth imaging satellite • Their mission is to improve • Planning to deploy network built on CubeSats weather forecast accuracy, constellations of both launched off the ISS timeliness, and contribute earth observation and • Planet Labs has launched to climate modelling and communications satellites >28 satellites in its first space weather prediction • Bringing a commercial “Flock” (28 more on ISS) • Both are still building their market capability to image with plans to get to 100 first satellites and raising “the entire arable surface over the next 12 months capital of the Earth”

• Earth observation remains the #1 small-satellite-based application worldwide, BUT... • Facebook has established Internet.org “to make affordable access to basic internet services available to every person in the world” using drones, satellites and lasers

August 4, 2014 3 Emerging Space Nations Prefer Small Satellites

• Nations from Chile to South Korea have shown a preference for small satellites • The worlds newest agencies established in this decade include the UK’s new executive space agency (UKSA), the South African National Space Agency (SANSA), Belarus Space Agency (BSA), Mexican Space Agency (AEM), National Aerospace Development Administration (North Korea), and Turkmenistan National Space Agency (TNSA); The United Arab Emirates has just held its first meeting for a new space agency there

August 4, 2014 4 Earth Observation by the Numbers

In this decade, small satellites are poised to become the core of numerous Earth Observation (EO) systems and a significant source of global imagery • Over 275 government-owned EO satellites are under contract, in development, or projected to be developed for launch in the period from 2013 through 2022 • Euroconsult research indicates “the number of Earth observation (EO) satellites launched by civil government and commercial entities is expected to more than double over the next decade to 360 satellites, translating into $35.8 billion in manufacturing revenues over 2013 to 2022, an 88% increase” over the prior decade • Significant growth in both government and commercial earth observation systems is, in part, fueled by projected Compounded Annual Growth Rates (CAGR) between 15% and 25% in the earth imagery market over the next five years • The growth in satellite-based earth observation products through commercial vertical markets, i.e., information, data products and value added processing, is projected to double, if not triple, from approximately $2B today to as much as $6B by 2022 • Over 40 countries will order, build and/or launch an EO satellite – most of them small  EO missions from emerging nations will contribute to staggering growth in the number of satellite launches in the coming decade • By every reasonable metric, significant growth in EO satellite systems and services is clearly evidenced. But what does this imply for the small satellite market?

August 4, 2014 5 Emerging Applications and Markets

While much of the activity in earth observation continues to focus on conventional visible and near-infrared imaging from space, three applications appear to be emerging and show potential for commercial space expansion • Agricultural Monitoring and Management – Assessing spectral signatures of various crops to determine the health, growing conditions, and yield prospects of crops • Synthetic Aperture Radar – Providing imagery to manage water or natural disasters • Weather – With applications for terrestrial as well as space weather prediction

Image courtesy of ParBleu Inc. and the Canadian Space Agency

August 4, 2014 6

ENTREPRENEURS SEEKING NEW BUSINESS MODELS

“TODAY’S COMPETITOR IS TOMORROW’S PARTNER”

August 4, 2014 7 The Commerce of Satellites in Tight Markets

When resources are tight, creative strategies offer opportunities to grow one’s business • Countries and agencies agreeing to a greater exchange of imaging data  Thailand and Japan share a common interest in the production of rice in their two countries  Despite being competitors on the world market for rice, Thailand’s Geo-Informatics and Space Technology Development Agency (GISTDA) and the Japanese Aerospace Exploration Agency (JAXA), have co-organized a series of workshops focused on rice crop monitoring • Imaging providers sharing distribution channels, each providing a piece of the picture th  On April 15 , 2014, DigitalGlobe, Inc. announced they would cooperate with MDA in Canada to offer combined optical and synthetic aperture radar satellite data solutions to their respective global defence and intelligence customers  The announced capability provides their customers with an ability to “task and collect with DigitalGlobe's constellation of high-resolution earth imaging satellites, along with ability to receive and process near real-time data from the RADARSAT-2 SAR satellite” • Traditional competitors joining forces to pursue space hardware manufacturing  In February 2014,– ATK Space Systems Inc. and ST Electronics (Satcom & Sensor Systems) Pte. Ltd., two independent suppliers of small and micro-satellites, entered into an agreement to jointly develop, manufacture and supply microsatellites and integration services to the world  Together, our two companies created a unique partnership to deliver cost-effective, turn-key microsatellite-based space mission services Working together, ATK and STEE SatComS will deliver market competitive microsatellites and mission services to the world space market

August 4, 2014 8 ST Electronics (Satcom & Sensor Systems)

Leading SATCOM Solutions Provider • VSAT RF components • Hubs & routers • Fixed and mobile earth stations Earth Observation Satellites, Subsystems & Services Provider

Satellite Buses Subsystems GeoServices

TeLEOS-1 A150S/ SS-400 SS-150

X_SAT SS-100 Provide High Availability Develop & Supply Small Develop & Supply Space- High Responsiveness Satellite Buses Qualified Sub-systems Services

August 4, 2014 9 Satellite Systems Programs & Missions

Small satellite industry leader for national security, civil science, and commercial missions • Agile, rapid systems up to 1,800 Kg THEMIS • Single spacecraft or constellation solutions A100 • Fixed, development, or fee-for-service pricing EO-1 A200 100% spacecraft bus on-orbit success • EO-1 Spacecraft 13+ years on-orbit TacSat-3  1-year, single-string mission design life A200 • THEMIS constellation of five spacecraft operating in Earth and Lunar orbit • TacSat-3 operationalized from successful experimental mission ORS-1 ViviSat MEV • ORS-1 declared operational for CENTCOM combat A200 A700 support use in January 2012 • Spacecraft systems integration leadership on next generation small satellite missions • Systems engineering, mission modeling & simulation, AI&T, payload and launch vehicle integration • Core subsystem disciplines: structures, mechanisms, thermal control, power, GN&C, and propulsion • C&DH, software, RPO test beds • DARPA Phoenix orbital servicing bus A150 • ViviSat™ commercial GEO communication satellite DARPA Phoenix Mission Extension Vehicle (MEV) A500

August 4, 2014 10 The A150S High-Performance Micro-Satellite

Drawing upon a mutual systems heritage, space experience and resources, ATK and STEE-SatComS have introduced the A150S/SS-150 microsatellite to the market as a platform optimized to respond to the global market demand for earth observation, scientific exploration, and technology maturation missions • The A150 bus provides better performance across most critical system metrics while targeting a lower unit production cost than other buses in the 150 to 200 kg class Spacecraft Bus Attributes Performance Metric Payload Accommodation Performance Metric Mission Class/Design Life (Years) Class B/C/D; 3 Design; 5 Goal Nominal Mass (kg) Up to 75 Redundancy Single String to Selective Nominal Volume (cm) 51 x 46 x 20 Bus Volume (Nominal, cm) 61 x 71 x 91 Payload Power (W-OA) 75 Attitude Knowledge (°) 0.008 Peak Power (W) 125 Attitude Control (°) 0.05 Voltage (V) 28 ±6 T&C Uplink (Band; Kbit/s) S; 2-32 Aperture Size (Ø cm) Up to 46 T&C Downlink (Band; Kbit/s) S; 16-2000 FOV (sr) 2π Battery Chemistry; Size (Ah) LiIon; 22.5 Payload Data Storage (GBytes) 16 (Expandable) Propulsion (ΔV, m/sec) 150 Data Downlink (Band; Mbps) X; 300 Launch Vehicle Compatibility ESPA, Athena, Dnepr, Falcon 9, The modular, scalable design of the A150 enables multiple payloads Vega, LauncherOne, and others to be accommodated with available FOVs on several faces of the bus.

The A150 is designed for dedicated/stacked launch on most small ELVs and ESPA compatibility

August 4, 2014 11 A150S ESPA Volume with CCL Compliant Telescope

New U.S. Export laws going into effect in November may enable provision of an A150S imaging satellite without ITAR restrictions

August 4, 2014 12 ATK-STEE Market Leads by World Region

ATK and STEE will lead in their regions of strength Turn Key Mission Capabilities and Services  Mission Analysis and Planning  System Development, Integration and Test  Mission Coverage and Utility Analysis  Regionally manufactured A150S/SS-150 platforms  Mission Design and Performance Trades  Packaged launch and ground systems & services  Payload Specification and Procurement  Operations support and value-added data services

STEE-SatComS Asia-Pacific Region

ATK Space ATK Space Americas Region Europe & MENA/GCC Region

August 4, 2014 13 Inferences for the Future Small Satellite Market

Observations: • Small satellites are an enabling technology within reach of emerging New Space entrepreneurs and small nations with very modest budgets for advanced technology • Technological advancements, many of them terrestrial-based, in an insatiable information age are enabling these New Space entrepreneurs to envision and pursue new businesses that only a few years ago were deemed unthinkable • The spatial, spectral, and temporal resolution of even the smallest systems is vastly improving, placing ever higher demands on the communications links and processing abilities crucial to receiving and interpreting massive amounts of data Predictions: • Before the end of this decade we will likely see a significant expansion in the applications of small satellites in global weather, agricultural management, and daily business functions like risk estimation and mitigation, commodity trading, insurance and real estate • Suppliers, be they of hardware or data, are faced with a necessity (or opportunity based upon your perspective) to join forces to respond to a dynamic market where traditional application and sales models are being trumped by web-based gateways • The possibilities for the future stretch well over the horizon of conventional thinking

August 4, 2014 14 Questions?

& DELIVERING VALUE IN THE

August 4, 2014 (Non-Export Controlled - ATK IPWG Approval 643) 15