It’s time to break open another satellite silo — your business model.
I just returned from World Space Business Week. As I reflect on it, I think the organizers Novaspace perfectly summarized where we are as an industry: “Despite ongoing challenges, including a complex macroeconomic environment and increasing competition, the space industry remains focused on long-term growth, innovation, and international collaboration.”
Prior to WSBW, I spent August and early September on a whirlwind global tour where I had the pleasure of meeting with so many of you. It has been incredible to see the creative ways you’re using our technology to push your businesses forward and are developing strategies to expand your customer base to meet increasing demand.
We had honest discussions about the challenges we’re all facing — tougher competition, higher costs, increasing customer expectations, and the financial risks of launching and monetizing new constellations and services.
Having been in this industry for almost 25 years, I’ve witnessed one recurring issue that has held us back and that can amplify our current challenges — silos.
The satellite communications industry has traditionally operated in isolation, disconnected from the broader telecom world. We have relied on proprietary technologies that have lacked interoperability. This isolation has relegated us to being a last resort. Outdated technology and vendor lock-in limits our industry’s from reaching its full potential.
Recently, new and consolidated businesses disrupted the norms of our industry — I think for the better. Patience for long life cycles and high prices has waned. Added external pressure comes from telco and cloud industries whose ubiquitous influence is shifting mindsets.
During conversations with customers and partners on my trip, we agreed it is a real challenge to run a business today with the rapid pace of changing technology. None of our businesses is unaffected and all of us must become comfortable with shifting strategies. Gone are the days of set-and-forget massive satellite programs where migrating from one system to another had a defined start and finish every decade or so.
Industry silos that once made satellite expensive and difficult to use no longer serve us.
At ST Engineering iDirect, we’re believers in breaking down these silos. We’ve been working diligently to align satellite and terrestrial communication through common standards, driving interoperability, ecosystem collaboration and opening new market opportunities. These efforts are for the betterment of our industry and customers.
Together, I believe we need to face a new challenge: business model silos. Our industry traditionally has been split into two competing paths to market — vertically integrated models with full control but limited interoperability, and horizontally distributed models that rely on a broader ecosystem of partners and resellers to bring services to market, but often leave revenue on the table.
There’s a better way, a growing and surprisingly positive middle ground. It’s time to introduce a new concept into the satellite industry: Diagonal Integration.
I see diagonal integration in our midst: Previously vertical and horizonal operators alike are consolidating. These once staunch competitors are now strategically merging resources. Managed service offerings have replaced satellite operators’ once purely MHz sales — and value-adds from a growing ecosystem are proliferating. Satellite manufacturers are seeking collaboration with ground segment partners to fully realize the potential of next generation software-defined satellites. Cellular and wireless industries offer our industry many lessons learned. And we are all forging partnerships with mainstream telecom and cloud providers.
Diagonal integration is the necessary hybrid approach we need for the satellite industry to prosper.
Let me elaborate on the key tenets of a diagonal model:
- Common Standards: Companies adopt industry-wide standards that ensure interoperability across systems. In this way we can make the most of our innovations. Take the idea of API standards to support ground and space segments. As we work with manufacturers to design satellites that take ground and space capabilities fully into account, let’s seize the opportunity to make sure these innovations are fully leveraged by supported API standards.
- Adaptability: A diagonal model enables companies to quickly adapt to market changes or technological advances by leveraging both in-house capabilities and industry partnerships. Think about how users are currently constrained by existing hardware. Partnerships, like ours with cloud service providers, allow us to virtualize not just remotes and hubs, but our entire infrastructure, enabling you to scale and adapt your operations as demand changes.
- Hybrid Connectivity: Satellite technology can no longer operate in isolation. A diagonally oriented business is ideal for hybrid scenarios, including integration with other satellite systems, terrestrial networks, and emerging 5G technologies, to remain viable and offer more robust services. We’ve designed the new Intuition ground networking system to support multi-orbit, hybrid connectivity in every possible manner, from industry-renowned applications such as iDirect’s Global Bandwidth Management (GBWM) to the latest applications including our new Domain-based Automatic Beam Switching (D-ABS) and cloud-native Intuition Network Management System (NMS).
- Customer Value: Customers benefit from comprehensive, interoperable solutions delivered faster and more reliably. A diagonal business model offers this advantage to you — our customer — and to your customer base. We are activating ‘sophisticated automation and analytics’ to intelligently manage end-to-end networks and enable new service offerings. Complex technology can be simplified for the user by augmenting it with tools such as machine learning. A diagonal approach, leveraging available innovation to enhance the output, will help you improve service performance, better monetize capacity, and fully capitalize on the latest advancements like software-defined satellites and ground infrastructure virtualization.
- Ecosystem Partnerships: Diagonal integration fosters collaboration across related industries, leading to integrated solutions that benefit the entire ecosystem. ST Engineering iDirect is engaging its ecosystem to enable next generation constellations and software-defined satellites. Our partnerships drive standardization and virtualization enabling flexible hardware and multi-waveform software, and virtualized network and baseband processing. Some of these are formalized, but all are grounded in the principle of collaboration.
- Flexibility: The ability to evolve as business grows and changes is perhaps the most basic aspect of diagonalization. I understand that our customers need a variety of go-to-market strategies to succeed as you scale. Intuition is built for flexible scalability with a single platform that enables managed services to ease operational burdens.
The market is rapidly changing and customer demands are intensifying. As the satellite communications market grows, so will competitive pressures from new entrants.
At ST Engineering iDirect, our Intuition ground system is designed to support a diagonally integrated business model.
By embracing this diagonal approach, we can break down barriers, seize new opportunities, and succeed together.
Our innovation roadmap will guide us, but what we build together as an industry will always be more powerful than what we accomplish alone.
Looking forward to the journey ahead,
Don Claussen
CEO, ST Engineering iDirect