This slide from my opening note at EO Summit summarises the evolution of the commercial Earth observation sector over the past decade and a half.
While the number of EO satellite companies has risen from a handful in the early 2010s to over three dozen today, we can see some common themes and trends in how the industry has evolved.
Not including the longstanding industry giants such as Maxar and Airbus, I describe the growth of the commercial EO sector, or the so-called NewSpace EO as an evolution that happened in three waves: the horizontal pioneers, the vertical-focused innovators and the backward integrators.
➡️ Horizontal Pioneers from the early 2010s had to be vertically integrated as the NewSpace era had just started and few services or components were available to buy off-the-shelf.
Since they were mainly pioneers in EO, they had to go with a horizontal approach to selling data to several market verticals. However, gradually they have expanded down the value chain with many of them recently starting to sell analytics.
➡️ The Vertical-Focused Innovators, thanks to the advancements in the satellite and space industries, leveraged the off-the-shelf products and the increasingly available ‘as-a-service’ models.
They also had the opportunity to learn from the businesses of the horizontal pioneers that may have led them to build EO satellites to acquire data relevant to specific use cases (vs a purely horizontal approach). Given that many of these companies validated what their customers want and how they want it, they started to directly offer analytics services (vs data).
➡️ The Backward Integrators, in the meantime, started appearing in the market towards the start of the 2020s, and they came from a completely different angle.
Many of these firms were analytics providers actively delivering solutions to their customers, but as a result of their strong understanding of user needs and perhaps, because they found the current crop of EO satellite companies to not answer to their needs, they pivoted to launching their own satellites, almost always with proprietary sensors and satellite architecture, designed specifically to their requirements.
And, all this, while the major space agencies of the world continued to launch scientifically significant and technologically advanced EO satellites.
P.S.: Yes. You might find that there are several anomalies in the market today that do not fit into any of these categories. You might even find that the vertical integration model is slowly coming back, in some companies. This is not a comprehensive market landscape, but simply a framework to understand the evolution of EO.