Historically, differentiation in the EO data market was achieved through spatial resolution and spectrum. Since the data commercially available reached the limit of shutter control regulations (WorldView-1 in 2007), the race for data product differentiation slowed down. Companies providing 50cm resolution imagery cashed-in, some of them developing their spectrum capabilities, while other companies worked at catching-up.

Now that more companies propose 50cm imagery, incumbent players have to find new means of differentiation to maintain their niche and the revenues that come with it. The recent calls to lower the shutter control regulation limit are now in line with incumbent future capabilities:

• DigitalGlobe (USA) claimed it would immediately be able to address the new data market thanks to satellites currently or soon-to-be in-orbit with a resolution close to 30cm (and unique spectrum).

• Thales Alenia Space (France) claimed it would immediately be able to provide Optical payloads with a resolution lower than 50cm.

It is likely only a matter of months before shutter control regulations are lifted in the main markets, especially as other imaging means, such as Aerial and UAVs, are not constrained by such regulations and provide imagery with a resolution below 10cm, considerably weakening the legitimacy of such shutter control regulations for satellites.

One could expect Defense & Intelligence (D&I) organizations to be the main clients of <50cm imagery. However the largest D&I organizations already have access to commercial <50cm imagery; therefore, they will not be at the origin of a huge boost in orders. However, other vertical markets such as Energy & Natural Resources (Oil & Gas, Mining), Services and Industrial will welcome this imagery. This will have large consequences on Processing and Information Product markets for two reasons:

• First, D&I (and Public Authorities) have a strong trend to internalize such processes, limiting the growth of the market, while commercial verticals tend not to. Historically, as D&I were the first and main clients of the highest resolution imagery, growth of data did not translate into huge growth of Processing and Information Products.
• Second, the value of Processing and Information Products done over imagery is correlated to the resolution; the higher the resolution, the higher the Processing and Information Products over Data.

As large parts of D&I needs of <50cm imagery are already satisfied, the ratio between the growth of data markets and the growth of Processing and Information Products will differ greatly. While Processing market growth will be restrained by other factors (such as automation), Information Products will not. Information Products will hugely benefit from any weakening of shutter control regulations, over time representing an increasingly higher share of the Satellite EO Industry.

Bottom Line

In a somewhat typical situation, major players are competing on historical differentiation aspects, while new players work on proposing radically innovative data products (data products with very specific characteristics):

• Video Data Products: Several companies announced such projects; the most advanced is SkyBox Imaging (first launches in 2013) with video data products featuring 30 frames by second.
• Meteorology Data Products: Several companies announced such projects; the most advanced are GeoMetWatch (Hyperspectral Atmospheric Sounders in GEO) and GeoOptics (atmospheric sensing satellites).

The satellite EO industry is therefore at the dawn of new period of strong growth, driven by old factors pushed further (spatial resolution and spectrum) and brand new products.