DigitalGlobe Chief Sees No Competitive Threat from Earth Imagery Startups

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PARIS — Satellite geospatial services provider DigitalGlobe Inc. on May 19 dismissed the threat potential of the numerous startup Earth imagery providers, saying those that survive the inevitable shakeout could become DigitalGlobe imagery partners, much as competitor Airbus Defence and Space of Europe is today.

DigitalGlobe Chief Executive Jeffrey R. Tarr also said the company’s next satellites likely would be much less costly to build than today’s WorldView-3 and the coming WorldView-4. Each of these cost around $750 million including launch and insurance and took four years to build, he said.

In a presentation to a J.P. Morgan investor conference, Tarr said DigitalGlobe has several ways it can reduce the capital expenditure when it comes time to order new spacecraft.

One way would be to use much of the same technology embedded in WorldView-3 and WorldView-4, reducing the nonrecurring engineering charges that would accrue with a new design.

A second cost saving, he said, could come from replacing the older WorldView-1 and WorldView-2 satellites at the same time with a two-satellite order that would cut per-unit cost.

Tarr said launch services are more widely available as well, and that launch costs have come down with the increased competition. For both WorldView-3 and WorldView-4, DigitalGlobe elected to use United Launch Alliance’s Atlas 5 rocket, whose price has generally kept it on the sidelines of the commercial market.

WorldView-3
Tarr said DigitalGlobe’s next satellites likely would be much less costly to build than today’s WorldView-3 (above) and the coming WorldView-4, each of which cost around $750 million including launch and insurance. Credit: Ball Aerospace

Internet search giant Google remains what Tarr called “a strategic and important customer” for DigitalGlobe despite Google’s purchase of Skybox Imaging, which is building a constellation of small, high-resolution optical imaging satellites. Several other companies, many with a Silicon Valley heritage, are also building commercial Earth observation businesses.

Tarr said he saw no competitive threat in any of them.

“We’ve seen a lot of business plans over the past couple of years and we’ve seen a couple of organizations launch satellites,” he said. “We’ve seen a couple of them fold. It’s a very different product offering with vastly lower resolution. Our resolution is 10 to 100 times these other satellites’.”

Tarr said a satellite’s ground sampling distance is only one measure of its imagery sharpness, and that highly precise geo-location accuracy is just as important. “The other satellites often don’t have a geo-location capability to them, so they’re much less accurate,” he said.

Google’s June 2014 purchase of Skybox Imaging for $500 million in cash notwithstanding, the startup Earth imagery companies so far have not demonstrated an ability to attract a customer set large enough to sustain the business. How long their investors will wait for this to occur may depend as much as anything on how long cash will remain as plentiful among Silicon Valley startups as it is today.

Longmont, Colorado-based DigitalGlobe plans to launch its WorldView-4 satellite by September 2016. The U.S. government has no advance claim to the satellite’s capacity as part of DigitalGlobe’s EnhancedView contract, which runs to 2020, as it did with three previous WorldView spacecraft.

“For the first time, we’ll be able to offer our DAP [Direct Access Partners] customers the ability to have capacity that cannot be pre-empted by the U.S. government,” Tarr said. “On all the other satellites, our customers often get pre-empted if there’s an image they want and the U.S. government wants the capacity at that same time. So WorldView-4 should be an unlock for additional growth.”

WorldView-4
DigitalGlobe plans to launch its WorldView-4 satellite (above) by September 2016. Credit: Lockheed Martin artist’s concept

Tarr said the company had about $120 million more to spend on WorldView-4, which was called GeoEye-2 before DigitalGlobe purchased it in a buyout of competitor GeoEye.

DigitalGlobe has DAP customers in 10 nations that are close allies of the United States. These customers have the right to command imagery from one or more of DigitalGlobe’s current four satellites on their own, having taken delivery of special ground satellite-control infrastructure.

For other nations, the company has regulatory liberty to sell images, including WorldView-3’s 30-centimeter imagery, just about anywhere in the world except for nations under U.S. government embargo, he said.