We are spending over a billion dollars between GeoEye 1 and 2 so that our customers can see an assured source of data over the long term
CEO, President and Director, GeoEye
What are the offerings of GeoEye at present and what else is in the pipeline?
We have GeoEye 1 that was launched in 2008 and GeoEye 2, which is on track for launch in March 2013. We are spending over a billion dollars between GeoEye 1 and 2 so that our customers can see an assured source of data over the long term. GeoEye 2 will start selling imagery in the fall of 2013 and once it is up and operating, we will start working on GeoEye 3. GeoEye 1 captures imagery at 0.41 metre resolution, which is delivered to the US government. Imagery for the public is available at 0.5 metres because in the US, we cannot sell imagery that has resolution higher than 0.5 metres to anyone other than the government. While the policy might be changed going forward, it may not necessarily be a near term change. It is a relevant point of discussion because the next satellite we are building for the US government, the Geo- Eye 2, will have the ability to capture imagery at 0.33 meters.
However, the issue is whether we would be able to sell imagery to others or at what point will the US revisits the limits. I think what US does in this regard will be guided by what is going on in the foreign market. For instance, if other nations are pushing for higher resolutions then the US will also do that.
Tell us about the changing user needs and GeoEye’s strategy to cater to those needs?
We have said for years that the industry has to evolve beyond simply gathering pixels. Our biggest investments are gathering more pixels and having higher resolution and higher accuracy. GeoEye has been doing value added production for the US government in St. Louis since 1987 and is one of the few satellite operators who blend imagery from different sensors and different sources to create complex, value added products. The ability to create imagery from various sources will gain importance as you get additional satellites as it is more important to focus on what the imagery tells you than simply looking at the picture for what you see. We call that multi-source production or imagery fusion. In December 2010, we bought a company called SPADAC, which was a leader in predictive geospatial analytics, and renamed it to GeoEye Analytics. Predictive geospatial analytics has a lot of utility as it can help predict a future scenario by looking at certain characteristics of a present situation. Thus, it can help various agencies allocate their scarce resources in an efficient way. The ability to extract more information from the pixel will always be useful to your clients. The director of NGA said that she wanted on demand delivery of geospatial information to people and we have been doing this with our EyeQ platform. She also said that we need to get information out of the pixel, and that is exactly what we are doing with the analytics effort. The industry is going to evolve this way and there will be many more sensors soon. While that may increase the competition, it will also increase the supply of imagery and thus help produce more value added products.
Is the change in user needs bringing a change in the distribution and delivery of imagery?
The first thing that comes to our mind when we see the increased amount of satellite data is how to make it easily accessible for all. A major revolution in the music industry is the iPod and one of the reasons it became a revolution is its ease of use. Likewise, we want to make it easier for non-technical people to access, manage and share imagery and that is what we have been doing with our EyeQ platform. That then ties into another aspect of web distribution, which is the cloud. We often use business applications where companies do not store information themselves but there is another company that hosts and manages that information. We are doing that for the US government under a very successful programme called the Rapid Dissemination of Online Geospatial Information. Every major military activity and every major disaster relief is a coalition effort where imagery needs to be shared rapidly. In order to do that, the imagery has to be unclassified and one should have effective and efficient web distribution so that disaster relief, whether it is in Haiti or in Japan, can get the imagery through the web. Another thing that we focussed on while designing this service was giving people the ability to chip out just the image that they needed. For example, if they want to see the Fukushima nuclear plant, we have to make sure that they are not seeing too much of Japan because imagery is very dense and it is hard to transmit.
One of the challenges in web delivery, whether it is for a government or commercial entity, is to ensure adequate security. People, for commercial or governmental reasons, do not want other people to know what tasking they are requesting or what pictures they want taken. They do not want others to see the imagery that comes down. Working through the cloud has a lot of advantages in terms of speed, economy and agility. However, the one disadvantage that it brings is that one really needs to work on the security aspect. Thus, we will have to work together to figure out security for effective data distribution through the cloud.
GeoEye has been working with regional partners for distributing imagery. What is new on this front?
We have always thought that it is smarter to work through local partners in all markets. We have strong partners in Europe, Asia and Middle East. We do not try to go into the market and compete with them because they speak the local language, know the local culture and have market intelligence. We are following the same route in emerging markets and have developed GeoEye’s market over the past few years in China. In China, we work with a group called East-Dawn, which is a distribution and production company. We see signs in India that it is beginning to think about brining policy change. In Russia, we work with ScanEx, which has ground stations, production and distribution facilities. Russian market has been expanding and so is ScanEx. If you look at the global economic situation, the most promising areas for growth are the developing countries because the more developed countries in Europe and America are challenged by the financial situation.
We do a lot of production in India. One of our most successful products, the airport 3D model, is being increasingly produced in India. Now, we do less and less of that work in Denver, Colorado. While the Indian market is opening up, the Latin American market too shows a lot of promise. It is a big market and it is somewhat fragmented, but I think that should develop with time. In each case, we prefer working through a local reseller because the reseller knows the culture, knows the buyer and thus it is not worth us investing in setting up an office there.
We have groups like GEOSS, who are trying to act as linkages between users and providers. What should be the role of such organisations?
We should try to design an effective financial model so that there would be sharing of the benefits of job creation, sharing of information and at the same time sharing of the economic burden because these things are expensive. I know that GEOSS and other groups have worked at trying to get people to cooperate but it is awfully hard because each nation has its own budget.
Do you think such groups should be formed that the regional level gets involved?
I do not know what the most effective route would be, especially given the fact that everybody is watching their budgets carefully these days. I think it has to be more on a global than regional level. Every nation has to step back and think about what it can afford and what does it really need. We will have to plan for the long term and not just do it for one mission. For example, we can set a target for land coverage imagery for the next 20 years and so on. These two types of information are of such general application that nations would not feel such proprietary about them as they would about information that could be used for defence or intelligence purposes.
Given that everybody is watching their budgets, what are the kinds of business models that are evolving in satellite-based commercial EO industry?
People have traditionally depended on governments for what we call anchor tenants, where the government puts in a big order that helps somebody build a big satellite and then they sell the excess time. I think there will be more and more sharing of imagery and sharing of revenue. The analogy I have often used is cell phone roaming charges where a number of companies are involved in sharing the revenue. I think that pricing will become more complicated but it will also become more rewarding because if we expand the market and make our imagery available to the users at large then the market will continue to grow. We are seeing a period of economic uncertainty that might slow us down for a year but it is inevitable that this industry will continue to grow, because it makes every decision maker more efficient. Every decision maker using geospatial information can make more informed decisions. For the next year or two it maybe a little cloudy but then the clouds will clear and the growth will continue.