Global cloud computing giants are making a big foray into India. And space tech might play a key role
The space deals will add spice in India too. India’s cloud computing market is estimated at $2.5 billion. The govt has also decided to open up India’s space sector to private players
On 22 September, Microsoft CEO Satya Nadella announced the preview of Azure Orbital at Microsoft Ignite 2020 in New Orleans. According to Microsoft, Orbital is ‘Ground Station as a Service (GSaaS)’, which is aimed at helping its customers to communicate with, and analyse data from, their satellites or spacecrafts on a subscription basis.
Around two years ago, it launched the AWS Ground Station to allow its customers to control their satellite communications, process data, and scale operations without having to build or manage their own ground station infrastructure. On 30 June, AWS said it was establishing a new space unit called the Aerospace and Satellite Solutions.
These are but a few cases in point to demonstrate that leading cloud computing service providers have begun flexing their muscles in space too. But why is there a sudden race to outer space?
According to the International Telecommunication Union (ITU), non-geostationary satellite orbits (NGSOs) such as medium earth orbits (MEO) and low earth orbits (LEO) are being increasingly used worldwide. NGSOs, unlike fixed or geostationary satellite orbits, move across the sky during their orbit around the earth. With space launches becoming more affordable and accessible, a slew of private companies are starting to rely on this new array of satellites.
They are used for applications like weather forecasting, surface imaging, communications, and video broadcasts. However, the data from these satellites need to be processed and analysed in data centres on the ground, which explains the term ‘ground stations’.
While the cost of the satellite itself is falling, building and running ground stations can cost up to $1 million or more, according to a recent blog post by Jeff Barr, chief evangelist for AWS. Complex data processing also requires a lot of computing power, and the huge data storage requirements only add to the cost.
Leading cloud computing service providers are now starting to offer satellite operators the option to use these ground stations on a ‘pay-per-use’ or subscription basis, thus, helping the latter save on capital expenditure costs by employing an operating expenditure model.
These ground stations, thus, can help satellite operators download high-resolution imagery faster, more regularly, and analyse the data with artificial intelligence (AI) tools—all of which results in faster and enhanced monitoring of changing climate patterns, forests and agriculture, among other things.
While Microsoft and IBM are testing their services, AWS Ground Station already has customers such as NASA’s Jet Propulsion Laboratory and satellite operators Iridium Communications and Spire Global. It also has private sector customers such as Lockheed Martin, Maxar Technologies and Capella Space.
The worldwide cloud infrastructure services market continued to surge in the April-June quarter of this calendar year to touch $34.6 billion, according to research firm Canalys. The growth was attributed to the consumption of cloud-based services for online collaboration and remote working tools, e-commerce, remote learning, and content streaming which hit new records during the lockdown.
During this period, AWS was the leading cloud service provider, accounting for 31% share of the total spend. Microsoft Azure came second, followed by Google Cloud and Alibaba Cloud.
The revenue of the cloud unit of Amazon totalled $10.81 billion in the April-June quarter of this calendar year, accounting for 12% of its parent’s revenue.
Microsoft, on the other hand, said its “commercial cloud surpassed $50 billion in annual revenue for the first time" for the quarter ended June 30 (which is also its financial year ending). But it does not spell out what this ‘commercial cloud’ consists of.
Nevertheless, the space forays will only add to the revenue of all these companies.
Battle lines in India
Space deals will add spice in India too. India’s cloud computing market was estimated at $2.5 billion in 2018, dominated by infrastructure as a service (IaaS) and software as a service (SaaS), according to industry body Nasscom. It is forecast to touch over $7 Billion in 2022.
AWS, Microsoft and Google are leaders on the local turf too. Last August, for instance, Microsoft signed a deal with Reliance Jio Infocomm Limited (Jio)—a subsidiary of Mukesh Ambani-owned Reliance Industries Ltd (RIL). The agreement included deploying the Microsoft Azure cloud platform in Jio’s data centers in locations across India.
This January, Google Cloud signed a deal with Bharti Airtel to cater to small and medium enterprises (SMEs) in India. However, Google said this July that it was pumping in $4.5 billion into Airtel’s rival Jio Platforms in exchange for a 7.7% stake. Not surprisingly, a month later, Bharti Airtel announced a multi-year agreement with AWS to deliver cloud solutions to big companies and SMEs in India.
According to Alok Shende, Managing Director of Ascentius Insights, the “fusion of cloud computing with networking, linked by a satellite, is expected to shave off milliseconds in transferring data from source to destination. This is the holy grail in many applications, more specifically in finance and in mission-critical applications. There are many India-centric applications (like defence and in the stock markets) where this could play a powerful role."
He believes that “for Microsoft, particularly, this move opens a new avenue to entrench itself in the enterprise market where it has traditionally been a strong player on the application side but has lost the leadership position in terms of market share for cloud."
Jayanth Kolla, founder and partner of Convergence Catalyst points out that India has always been a strong player in the space sector with the Indian Space Research Organization (Isro) developing and launching satellites at a fraction of global costs. He believes that the Indian government’s decision to open up India’s space sector to private players is an encouraging sign.
“It has already resulted in Indian space tech startups such as Pixxel, Bellatrix Aerospace, Vesta Space and Agnikul raising over $20 million funding from venture capitalists (VCs) in the last six months. TV media, agriculture, telemedicine and logistics are a few sectors that can benefit from strong satellite communication and space technology development. The ground station services launch by Microsoft and AWS will only expedite this ecosystem development significantly in India," says Kolla.
Sanchit Vir Gogia, chief analyst and founder of Greyhound Research, concurs that the timing of this space move is right since many organizations are now beginning to try new use-cases by tapping into geospatial data (data related to a specific location on earth) that is omnipresent, given the proliferation of devices and edge computing devices.
“This space is increasingly getting busy with the likes of AWS and IBM investing money and resources to cater to this opportunity," notes Gogia. He cautions, however: “We believe the trick in making such an offering successful is to ensure that it is cheap to start with, since most of these projects are nothing more than trials and, hence, have an extremely high failure rate."
The distributed cloud
Space is just an additional frontier for the leading cloud services providers. It all began when companies, which traditionally used servers for their computing needs, realised that they could lower costs by accessing IT resources over the internet, and paying only for the services they needed, reducing capex—a trend we now know as cloud computing.
Many companies today use private clouds (on-premise), public clouds (on a network, typically the internet) and hybrid clouds (combining public and private). User companies, though, became wise and began adopting a ‘multi-cloud’ vendor approach to avoid being locked in by any single technology or cloud vendor.
With billions of devices getting connected to each other as part of the Internet of Things (IoT) trend, computing is now also getting done at the so-called “edge", which simply means near the source of the data.
General Electric Co. (GE), for instance, believes cloud computing is best suited to situations that demand actions such as significant computing power, management of huge data volumes from across plants, asset health monitoring and machine learning. Edge computing, on the other hand, makes sense in places like mines or offshore oil platforms that have bandwidth constraints, which make it impractical or very expensive to transmit data from machines to the cloud.
During his speech at the Ignite event, for instance, Nadella pointed out that Microsoft was “extending Azure from under the sea to outer space". He was referring to Project Natick that aims to serve customers in areas near large bodies of water. Natick uses AI to monitor signs of failure in its servers and other equipment.
Going forward, Microsoft says it will explore powering a Natick data center by “a co-located ocean-based green power system, such as offshore wind or tide, with no grid connection".
Similarly, other than deploying internet balloons in space to provide broadband services, Google also provides services to companies like Planet Labs Inc. The US-based aerospace and data analytics company uses Google Cloud platform to process all of its satellite images and Google Cloud storage to host its image archive.
These moves have given rise to a trend called ‘Distributed Cloud’, which research firm Gartner describes as “distribution of public cloud services to different physical locations".
By 2023, posits a 22 January note by Gartner, “the leading cloud service providers will have a distributed ATM-like presence to serve a subset of their services for low-latency application requirements... ‘Micro data centers’ will be located in areas where a high population of users congregates, while pop-up cloud service points will support temporary requirements like sporting events and concerts."
Greyhound Research believes offerings such as ground stations will be highly valuable in the next wave of investments in more distributed computing environments. “More than 7 in 10 of our end-user inquiries with global majors have confirmed that organizations, in the next 3-5 years, will use a large variety of computing environments and make them more contextual to the use-case," says Gogia. “This change is likely to be paced multiple times, given the investments in edge networks and 5G that allow remote sites in utilities, oil and gas, manufacturing, and many other scenarios," he adds.
The distributed cloud market is forecast to reach $3.9 billion by 2025, growing at a CAGR of 24.1% during the forecast period from 2020-2025, according to market research firm, IndustryARC. Security, though, remains a concern if proper protocols and policies are not adhered to in a distributed cloud.
For now, though, ground stations that cater to satellite companies will remain one big component of the distribution cloud. A race is clearly on and all the main players are looking up at the sky.
Leslie D’Monte is a consultant who writes on the intersection of science and technology
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