More Space Data Means More Cloud

A surge of NewSpace startups and traditional companies alike have leveraged cloud services to reduce lead time and grow revenues across the space industry. According to NSR’s Cloud Computing via Satellite, 2nd Edition report, Communications and Earth Observation are identified as the biggest opportunities in this market. Together they account for $18B of the projected $21B market opportunity between 2020 and 2030.  With ambitious launch prospects, and supported with strong VC funding, EO and communication constellations are maturing by the day. This maturation of the ecosystem drives the demand for cloud services for data storage and processing. NewSpace players and cloud service providers have a unique relation where the former thinks of cloud early in their products and services development and is part of the architecture from the get-go.

Space is Busy

With more launches, especially in LEO, there will be a proliferation of new players managing and providing new space-derived data flows. Those EO players, will look to improve on currently available commercial imagery supply and further diversify the offering to meet the needs of their customers.  Not only will there be more data produced, but because of the various cutting-edge payloads that are being developed and planned to be launched, we can expect more data that will require further processing, be it on the ground or on the edge as proposed by IBM. The same goes for the recent activity of OneWeb and Starlink, as thousands of satellites are to be launched over the coming years.

The knock-on effects of this activity are more demand for ground stations as-a service model and cost-effective data-handling solutions. The revenue opportunity for downstream innovation is hard to ignore.



The growth is in part driven by expected advancements in communications and EO that will unlock applications and therefore will play a leading role in the success of big data. With a wide range of sectors that look to benefit from improved data, the satellite industry and cloud service providers are well positioned to work hand in hand meeting those future needs.

Up in the Cloud

Cloud providers like Google, AWS, and Microsoft all saw double-digit revenue growth from their cloud services in 2020  and have all made clear intentions with their business units and marketing that the battle for cloud dominance will extend to space. There is and will continue be heavy competition to secure future growth. Investors and cloud players alike have figured out there are benefits to be at the forefront of technology, and in this case of the data. Already cloud players have partnered up with space actors and made significant plays. One of the key driver is to collocate ground stations as  the space industry continues to build hardware generating more data-intensive requirements, and capabilities and cloud providers see this as a growth market worthy of investments.

The experience and expertise that cloud players can bring to space industry is crucial as well. That being said, cloud architects are not normally common in space companies, but NSR expects this to change quickly as space companies look to bring this in house.  Security weighs heavily on the decision-making when it comes to provider, and when it comes to price offerings by Microsoft, AWS and Google, the volume discounts are tough to beat. Furthermore, cloud players are flexible in offering multi-cloud compatibility and play a large role in the data delivery to the end customer. Finally, access to a cloud provider’s network of existing customers presents a prime opportunity for space startups that traditionally struggle to gain customer traction and hence contracts.

Bottom Line

Terrestrial derived cloud revenues fuel expansion and cloud providers see space as a strategic and business move to secure future revenues as the big data trends continue to roar, which is just the beginning of the ‘SpaceCloud’ era. Recent trends and activities all point to a battle of ‘cloud’ service in space with the competition heating up, which in turn will help pressure pricing for storage and processing.

The cloud has enabled and will continue to facilitate the business operations of many satellite markets with EO and communications leading the charge. Space startups bring more data to the cloud systems, and cloud providers facilitate business by being part of the delivery and sharing network and branding strengths in a win-win situation for both.