NEWTOWN, Conn. - Changing market dynamics in the remote sensing satellite industry continue to affect DigitalGlobe. However, the company continues to respond to these challenges, and will continue to be a major force within the commercial remote sensing market.
A number of new firms with roots in Silicon Valley, like Planet (formerly Planet Labs), are proposing to build networks using dozens or even hundreds of tiny satellites (known as CubeSats) to provide imagery of the Earth. While the small-size satellites are not as capable as the larger DigitalGlobe satellites, the sheer size of the fleets will provide rapidly updated imagery that companies like DigitalGlobe cannot compete with.
Furthermore, many governments around the world are funding development of new remote sensing satellites as a way to boost domestic industries and technical capabilities. For example, Peru took delivery of PeruSat-1 in 2016. Once in orbit, these satellites will create imagery that will compete with DigitalGlobe's. Governments will increasingly use their own satellites, removing a source of business for DigitalGlobe. Governments will also sell imagery in the commercial marketplace, putting downward pressure on prices.
Still, DigitalGlobe will continue to be a strong player in the remote sensing satellite market well into the future. The merger between DigitalGlobe and GeoEye achieved efficiency gains through the consolidation of ground facilities and orders of fewer satellites. Starting in February 2015, DigitalGlobe began offering 0.3-meter resolution imagery. This extremely high resolution imagery will differentiate DigitalGlobe's offerings in the market. Moreover, DigitalGlobe has a strong relationship with the U.S. government. While the government has expressed interest in purchasing imagery from new satellite operators, DigitalGlobe already has a lucrative contract with the National Geospatial-Intelligence Agency (NGA) under the EnhancedView program.
Finally, DigitalGlobe has expanded from its original mission of providing raw data to providing geospatial services. In October 2016, it bought The Radiant group, a geospatial information company. DigitalGlobe is also increasingly promoting its Geospatial Big Data platform (GBDX), which uses machine learning, big data analytical techniques, and open source software borrowed from Silicon Valley companies to add value to its database of remote sensing imagery.
For those reasons, DigitalGlobe is expected to remain a major player in the remote sensing satellite market well into the future. The company will continue to purchase new satellites to replace its older spacecraft and to improve capabilities. DigitalGlobe has partnered with KACST and TAQNIA to operate its own network of small satellites, which will launch in 2019 and 2020. The company also plans to purchase replacements for WorldView-1 and WorldView-2 in either 2017 or 2018, for launch starting around 2021. The company will likely purchase them together to reduce capital expenditures.