Listen: Next in Tech | Episode 40: Tech goes to Space

View Full Transcript

Eric Hanselman

Welcome to Next in Tech, an S&P Global Market Intelligence podcast where the world of emerging tech lives libs. I'm your host, Eric Hanselman, Principal Research Analyst for the 451 Research arm of S&P Global Market Intelligence.

And today, we will be discussing space, a lofty topic with Rahiel Nasir and Craig Matsumoto. Welcome to you, both.

Rahiel Nasir

Hi. Thanks, Eric. Thanks for having me.

Craig Matsumoto

Yes. Thanks, Eric. Hello.

Eric Hanselman

So space is tremendously vast. Whatever particular cliched angle I could work into this, I'm just not going to go there. But I think the -- a lot of what we've been talking about, some of the coverage, the interesting things we're looking at really boils down to interest in satellites specifically and their role in a lot of the capabilities that they're bringing to the tech landscape.

But it's something -- it's an area in which there's been a lot more interest of late over the course of the last year and some odd. I wanted to talk with both of you about really what's changed why is it that there's so much more that's going on right now?

Rahiel Nasir

Well, I think, Eric, it extends to more than just -- even on the news this morning, I read about how William Shatner here, Captain Kirk fame is being shot into space. And space tourism, of course, has been hogging the headlines of late.

But if you peel beneath the surface and look at what's happening in the enterprise space, if you like, the last decade or so, I think, has seen the telecom satellite industry shift away from its age-old business model of selling whole cell capacity on space fleets to selling value-added services aimed at enterprise customers.

And I think this is the key thing to bear in mind. This hasn't happened this year. This hasn't happened in the last 2 years. It's actually been an ongoing process for the last few years. And I think the satellite industry or mass has decided, hey, listen, we can't just base business models on selling megahertz anymore. It's got to be about selling megabits.

So prior to, I don't know, 10 years ago, they would be selling transponder capacity because space -- to launch a satellite into space is a multibillion-dollar venture, and you got to start making that money back by leasing capacity on those transponders. So you're selling megahertz and you're selling sort of time and capacity.

But it's not all about that. Here in the real world, back on Planet Earth, we're looking at megabits. We're buying data. We're consumers of data. So it's going to be about all-you-can-eat in terms of data rather than what you pay for upfront. I suppose it's rather like going into a restaurant and being confronted by the waiter saying, well, the more you pay, the bigger the table we can give you. And -- but really, what you're saying is, well, actually, I want to pay by how much I eat and how much I consume. And I think that's where the industry is at the moment. And that's what's really bringing a lot of these issues to the fore.

Eric Hanselman

So enterprises are no longer required to boldly go where no one has gone before and in fact, are now getting services and capabilities that are more suited to what they really need, all Captain Kirk references aside.

Rahiel Nasir

I think that's right. And also, if you start looking at the tech as well, I mean, what's happened to satellite technology over the last 10 years, you've had -- you've got the advent of more powerful, high-throughput satellites as well as new and more efficient ground stage in technologies. That meant that the costs for satellite usage, I think, have fallen.

And that's why operators now tend to base their prices on the usage of megabits rather than megahertz, which is what I was talking about earlier. And that enables the users on the ground, if you like, to more readily compare satellite tariffs to tariffs charged by fiber and other terrestrial connectivity providers. So -- and I think that's where we're at the moment.

Eric Hanselman

Well, and you bring up another important point in all of this, which is that we've now got the advent of new types of capacity that also start to offer new capabilities at different orbital paths, which, of course, mean that they've got different latency characteristics, and so you've got new applications.

So low-earth orbit, you -- what you're identifying, a lot of those big hefty geostationary satellites really were geared towards a lot of outbound capability, places where we didn't have to worry quite so much about latency, satellite radio, broadcast signals, all sorts of other odds and ends of things. But now with low-earth orbit, we've got a whole set of new possibilities.

You've got SpaceX' Starlink, running Internet connectivity globally at relatively low orbit, low-earth. You've got all sorts of other things that start to open up new characteristics to the communications capabilities themselves.

Rahiel Nasir

We're talking about LEO increasingly, and there have been a lot of missions and -- that have been in the planning process that have begun. I think on the negative side, it's not going to be the be all and end all that a lot of people are hoping for. We've seen certain missions. Quite a lot of them actually fall by the wayside for want of funding.

The established satellite industry criticized LEO missions because, obviously, you need many more satellites orbiting out there to create a meaningful web and an Internet, if you like, up in space. And there are all sorts of technical difficulties that have to be overcome and they are being overcome.

But on the plus side, the fact that you can bring broader coverage to those who don't have coverage, that it gives you the ability to support edge computing via space, it gives you the ability to support IoT here on the ground, these are the things that I think that people are talking about when they talk about low-earth orbit missions that we're going to be seeing increasingly. And you've mentioned Starlink, which is one of the missions. And there are a host of other ones that are going to be coming up as well. For example, you've got Telesat's Lightspeed as well.

But one of the things I would say here, Eric, is that it's -- if there's one thing that the ICT industry has learned, I suppose, over the decades it's been active is that standardization is quite crucial. And in order to create a ubiquitous space web, if you like, you need all of these satellites from different missions to be able to communicate with one another, right? You need sort of intersatellite links. And that has to be built into the mission.

Otherwise, what you do is you run the risk of having these silos in space where Starlink doesn't talk to Telesat. Telesat doesn't talk OneWeb, et cetera, et cetera, et cetera. And there, you run the risk of clients buying capacity or data capacity on satellites and they're tied to a particular operator or a particular -- a vendor in space. Nobody is going to hear you scream about vendor lock-in.

Eric Hanselman

It's the final edge frontier, right?

Rahiel Nasir

Yes. Yes, you have it.

Eric Hanselman

Well, I think the challenge is that as you identified, we've got all these other services that are coming out here. But I think the thing that -- one of the core points you're making here, I think, is one of the other fascinating aspects, which is that we've now got hyperscalers who are coming to this environment. You've got AWS Ground Station and Azure Orbital starting to bring links directly to data center environments, which is this whole new area that, in theory, we can start to treat those satellite links in some of the same ways that we've had other dynamic resources that have been available to us.

Craig Matsumoto

Yes. That is really interesting. One were motivations for it. If I could start with the boring one, is that okay, is...

Eric Hanselman

Craig, come on. We're talking about space. We can't be boring.

Craig Matsumoto

We're talking about space, but the boring part that's actually important is that this lets the hyperscalers own more of that network chain, right? Because you see them doing this with terrestrial fiber, where you can now basically rent out a chunk of the AWS or Azure or Google backbone for your own transport to transport things back and forth to the cloud.

This is the satellite analog of that. It's a lot harder because what they're doing at AWS and Azure is setting up literal satellite ground stations with antennas and everything and connecting it directly to the cloud. But it gives them more ownership of that whole data chain, your data's in their hands longer, and I think the hyperscalers like that. So that's a base motivation.

But what excites me about this is that you've got a lot more data available through satellite now, right? If you can beam that directly into the cloud, you can start mingling it in closer to real-time with whatever other data and applications you have in that cloud, right? You can start mixing data in ways that you couldn't have before. And that's what excites me. They're just finding possibilities and what you could do with a greater amount of data in closer to real-time.

Eric Hanselman

So we've got clouds in space. This is awesome.

Craig Matsumoto

Clouds in space.

Eric Hanselman

Yes. Well -- but actually, in all seriousness, one of the other things that I think is really interesting about this is the fact that this is doing space in a cloudy fashion, hyperscale fashion, however you want to characterize it, but you're talking about the ground station connectivity pieces. Now in fact, you can book these buy the drink, buy the individual time slice when you know your satellite's going to be there, and to Rahiel's point, you don't have to go buy huge amounts of time. You don't have to buy a whole transponder. You don't have to buy -- lease satellite antennas. Now you can actually get time slices in each of these various resources to interconnect all this.

Rahiel Nasir

Yes, I think that is exciting. It's not cheap. I don't know if you've sort of had a look at any of these prices, Eric. It can actually rack up by the minute if you wanted to book those -- the space segments in order to download and process your data. But it's another tool, I think, that's available to enterprises and also to the satellite operators themselves.

And I think -- one of the questions I ask is, is this being driven by hyperscalers? Or is it being driven by the satellite industry itself? Because the satellite industry, one of the questions I think you asked before we began talking about this is, why is this happening now? And I instantly thought, well, why didn't it happen some time ago? Why has it taken this long to happen?

Because the satellite industry has been crying to talk to the enterprise user, particularly because in the past, satellite has always been used as the connectivity of last resort. And in order to differentiate themselves, the operators have brought in new enterprise services so they themselves have been talking about managed services and cloud connectivity for a number of years now.

And going back to the LEO missions that you mentioned, in 2015, one of the most significant LEO missions that was unveiled at a press conference in London that I was at was the OneWeb mission that I mentioned earlier on. And at that conference were the key stakeholders in the business venture and that was huge or EchoStar, I think, as they prefer to be called now. Indian operator Bati Telecom, Airbus, Qualcomm, Richard Branson with Virgin Galactic and forgot to say, will.i.am from the Black Eyed Peas was even there.

But there was no there was no cloud service provider, even though we had cloud service providers at that time. There was no cloud service provider. There was no IT service provider present at that launch because people weren't thinking along those lines. And you think, so why weren't they thinking along those lines?

And I think the answer in that -- and I think, Craig, you kind of touched upon it as well by talking about some of the ground infrastructure. I think it's now that the likes of AWS and Microsoft have a decent footprint of cloud regions across the world that enable them to sort of like put ground stations in there and satellite connectivity station in there in order to pull down the data from satellites for Earth Observation or IoT or whatever the application is, and then offer that as an enterprise service. So it's another string that they've added to their bow here, I think.

But who needs more who the most, I think. And I think it's the satellite operators that probably need the hyperscalers more than the hyperscalers need the satellite piece. I may be wrong here, but that's what I'm seeing.

Craig Matsumoto

Yes. I would agree with that balance. But I think the other thing we're also seeing is just a general cloudification of the world, and I don't mean hyperscalers taking over the world per se. I mean, more and more technologies and functions going into that as-a-service, pay-as-you-go cloud model, right, as opposed to rigid schedules and long-term contracts.

And that's a process that -- it takes time. And it hasn't even happened in all of IT yet, right? I covered networking, and networking has been really slow to move toward those kinds of consumption models. I mean, it's happening. The services are out there. But networking -- compared to compute and storage, networking was really late to the party there.

And some of it has to do with culture. Some of it has to do with the technological shifts that are required because the technology has to become available first, then people have to start adopting it. And then people have to find a way to consistently make money at offering it that way. So in some ways, it's satellites' turn to get that cloud treatment.

Eric Hanselman

So how should organizations be thinking about the capabilities of space? I mean, now we've gotten to a point at which there's broader access and Rahiel, to your point, while it's still not cheap, it's certainly a lot less expensive and the barriers to entry have been lowered significantly.

Rahiel Nasir

Right. Right. Yes.

Eric Hanselman

I mean, you're identifying some of the interesting aspects that are out there. I think people tend to think about communications first. We're bouncing things off satellites and we're sending streams of bits in that -- sort of that first aspect. But I think, Craig, you're identifying some of those new enterprise use cases of people starting to integrate all of that satellite sensor data.

Because you're now fielding a set of satellites that can do all sorts of interesting things. You've got, of course, all the imaging that's up there, visible IR. You've got Capella now doing relatively fine resolution synthetic aperture radar, you -- suddenly, there's a lot more out there that organizations could put to work.

Craig Matsumoto

Yes. Imaging is the thing that comes to mind first, just plain old earth imaging. Because imagine what you could do with a real-time glimpse of just what is happening across a large swath of geography, right? Natural disasters are one of the first use cases that they talked about.

If you have an entire municipal area that is flooding, or hey, I live in California, if you have a wildfire happening, you can get real-time shots of what's happening across a broad region and start to do some predictive work about, okay, what areas do you need to be worried about next? Which areas need to help right now? And then maybe in a more cynical way, if you're like an insurance company, you can say, okay, which parts of the city did flood, where are my liabilities?

Rahiel Nasir

Right. Yes.

Eric Hanselman

Being able to look after the fact at some of this as well. Yes. Well, it's -- that real-time aspect that I think that we're just starting to really leverage some of that real-time perspective. Because it's something, I think, that people hadn't expected they would be able to do. And Rahiel, to your point, that's really, in many ways, simply being able to envision what that use is.

Rahiel Nasir

Yes, I think so. And also, you've got to remember, this isn't sort of -- it's going to be a solution for a problem. It can't be sort of a solution looking for a problem, right? If you know what I mean? It's not the be all and end all. And there are certain applications -- so for example, the satellite industry's traditional clientele, I mean, they're going to -- as well as one that you've mentioned, Craig.

We've talked about weather observation, Earth Observation and disaster zones, it comes into its own. And don't forget the maritime industry and the aeronautical industry and all those areas, where there's remote activities such as mining going on, for example, and -- who have struggled to have the connectivity that they need. And now, they can take it to the next level because they can download and process and ingest huge amounts of data that they can suck down, draw down from space. And that's going to certainly help their enterprise missions.

But another issue for me, if I could just sort of pose a question back to you guys, is the issue of data sovereignty. When data is in space, what -- who owns that data? Who owns that data, if you like, at rest? As it's drawn down? What data sovereignty laws are at play here? And what's stopping bad actors from intercepting that data? And I think those are certain things that haven't been discussed as yet as far as I know.

Craig Matsumoto

That's a good point because when you're in space, when you are a satellite, nothing stops you from taking a picture of any part of the world you want, right?

Rahiel Nasir

Right.

Craig Matsumoto

There aren't laws about that. And even if there were, what are they going to do about it? That's a good question.

Eric Hanselman

Well, there are conventions. And I think if you look at where a lot of that space imaging has typically gone, there's -- the big commercial operations, of course, are reasonably sensitive about political concerns on various odds and ends of things. So there are certain areas in which you can and others where you can't get imaging.

But that's an interesting idea about, really, simply where that data is more broadly. We've talked about, Rahiel, to your point, data sovereignty in data centers on location -- terrestrial locations. But there's going to be -- there is some level of data storage already and more coming within the satellites themselves.

And then you get into those questions about, okay, who owns that data when it's passing over a region? Or is that an international border in space? Some complicated questions here?

Rahiel Nasir

Correct, right. Yes.

Craig Matsumoto

The other aspect that we touched on just a little bit, but I don't want to let go is just the vastness of data that could be made available this way. Because we can handle that vast amount of data now. This isn't something that would have been possible, I don't know, 10, 20 years ago.

But if you can take that data in chunks and move it straight to the cloud in large chunks, you start working on it in large chunks. All kinds of interesting things could start to happen. I think about -- you think about what happened when street maps became available to everybody, right? When -- basically when Google Maps APIs became available, all kinds of businesses spawned out of that.

Now the data from satellites might not be as vast because it's not something that you and I are going to use in our day-to-day lives, but still, there are a lot of possibilities there to think about.

Eric Hanselman

Well, that's something I think that the various space agencies have always had to deal with, which is not only the vastness of space, but the vastness of space data and I think that's something that we're going to have to leave for a future discussion topic, a vast one, nonetheless. This is an area where there's clearly an awful lot more that we could be talking about.

But I want to thank both of you for a great conversation today and something that I think is opening the doors to a set of much deeper conversations about these various aspects. So thank you.

Rahiel Nasir

Thank you.

Craig Matsumoto

Yes. Thanks, Eric.

Eric Hanselman

And that is it for this episode of Next in Tech. Thanks to our audience for staying with us, and hope you will join us for our next episode, where we will be tackling even vaster subjects, I am sure, because there is always something Next in Tech.