Transforming the space industry: How cheaper technology and new business models are creating opportunities

James White

VP of Strategy, Duro

May 8, 2023

AerospaceNewSpaceSpace IndustrySpace StartupsSpace Tech


Since it began over 60 years ago, space exploration has come a long way. Powerful, proven technologies from the commercial sector are now being adapted and used in space exploration. This includes IoT devices, solar panels, and ruggedized hardware. Because of this, commercial companies can now enter the space industry and create incremental revenue streams.

Additionally, lighter, cheaper, more powerful technology, coupled with scalable cloud infrastructure from ISPs such as Amazon and Google, have created new possibilities. This confluence of events has created a Space Value Chain, as described by Deloitte in a recent article. By leveraging this value chain, manufacturers of space technology can monetize valuable services such as satellite data and rockets to businesses that lack expertise in aerospace manufacturing.

This blog discusses what’s changed in the industry. It examines the new opportunities arising for Space Technology as a Service.

What’s changed in the space industry?

Deloitte’s research shows that technological advances have driven costs down, resulting in a reorganization of the space industry. But it’s not only about cost reduction, there’s a fundamental change in the space industry business model.

Miniaturization of satellites

Smaller satellites, like SmallSats or CubeSats, orbit at lower altitudes so don’t need to travel as far before going into service. Consequently, the rockets that deploy them don’t need as much fuel, their payloads are smaller and lighter, and so are simpler to engineer and are cheaper to make and operate. The economics are compelling:

  • Smaller rockets traveling shorter distances with lighter payloads require less fuel than their larger counterparts. In turn, the rocket’s structure is simpler because it doesn’t have to endure the same intensity of forces, and manufacturing the rockets is, overall, less expensive.
  • Furthermore, larger rockets carrying many smaller satellites can now have more paying customers to defray the cost of engineering, building, and launching them. Commercial customers have different funding models and interests. For example, they may be deploying constellations of small satellites to provide telecom and internet services to third-world countries. 

The emergence of commercial revenue streams

Companies that invented technologies for products used on Earth can repurpose them to create new products which can be sold to space companies. Technologies used in solar panels, energy management systems, IoT devices, avionics devices, and ruggedized hardware are used in manufacturing factories, hospitals, electric cars, commercial aircraft, robots, and drones, as well as in space vehicles.

As a result, industrial companies with versatile IP, can pivot toward space product applications and build multiple revenue streams which buffer the peaks and troughs of each industry. They can also achieve economies of scale by repackaging their core technologies for the space industry, which gives them an advantage over dedicated commercial Aerospace and Defense companies. In doing this, however, they must adhere to governance standards such as ITAR compliance

New opportunities for space technology

It’s quite common these days to pay for something as a service instead of buying it outright. This is because it saves us from having to pay for large equipment and R&D costs, plus the infrastructure needed to use it. Services like internet, TV, telecommunications, and clean water supply are all good examples of this.

Space-Technology-as-a-service (STaaS) is an exciting new development. It involves the provision of valuable services such as satellite data and the utilization of rockets and satellites. With STaaS, businesses that lack expertise in aerospace manufacturing can easily leverage space vehicles for their new business models without having to worry about designing or building the equipment themselves. 

For space technology manufacturers like SpaceXMomentus, or Gilmour Space, STaaS offers the potential to generate a constant revenue stream instead of relying on revenue per single transaction. Moreover, the satellite owner can sell services to multiple paying customers, which helps to amortize investment and establish a strong business model.

Emerging innovators disrupting the space industry

Duro works with companies that are pioneering the use of Earth-based technologies for space purposes, including:

  • Astroforge The scarcity of certain resources on Earth is a pressing concern, especially as we continue to rely on them for technological advances, from batteries to clean energy. Astroforge is developing technology to mine asteroids in space and extract valuable minerals for use on Earth. 
  • Orbit Fab Launching satellites and rockets with enough fuel to carry out their missions is a major challenge due to the weight of the fuel, which increases the rocket’s payload and engineering complexity. To address this issue, Orbit Fab is leading the way in developing in-space refueling stations for satellites and rockets. The company’s innovative technology enables spacecraft to refuel in orbit, reducing the cost of launches and extending the life of satellites.
  • Momentus Space has developed a revolutionary propulsion system. Its Microwave Electrothermal Thruster (MET) relies on solar power and uses water as a propellant. Water is a more abundant resource accessible on the Moon and elsewhere in space. In addition, this new propulsion method is more cost-effective and environmentally friendly.

Diverse applications for new space technologies

Additionally, there are emerging possibilities for use of space technology across several industries, from telecommunications to safety and energy.


Space technology has the potential to improve telecommunications and internet access in developing countries. Satellites can connect remote areas without traditional infrastructure. Companies like SpaceX, OneWeb, and Amazon are building constellations to connect the globe. 

Let’s look at the example of a social media platform exploring ways to expand its subscriber base. They want to reach large under-served markets such as rural India and China but lack the expertise to design and build satellites. Instead, they can contract with a satellite manufacturer to build a customized satellite that meets their specifications, for example, a broadband download speed of at least 500 Mbps and territory coverage of 500,000 square miles. In exchange for the satellite, they commit to subscribing to services such as:

  • a certain number of hours of satellite broadband operation per month
  • a specified amount of Mbits/s data downloaded per hour, and
  • a specific square mile coverage in India and China. 

Climate change monitoring

As the effects of climate change worsen, it’s crucial to have accurate weather forecasts. Extreme weather events, like hurricanes, tornadoes, and heavy rain after droughts, are happening more often and affecting billions of people. Staying informed about the weather using satellite monitoring services will help keep our communities safe. STaaS could be used to help understand the impact of climate change. 

For example, the Amazon rainforest is a critical global resource under threat due to deforestation caused by Brazil’s push for export revenue and the impact of climate change. In 2021 the rainforest reportedly emitted more greenhouse gasses than it absorbed for the first time. With the rainforest spanning over 7,000,000 square km and covering territory belonging to nine nations and 3,344 indigenous territories, monitoring it without using satellites would be a significant challenge. The world needs to monitor deforestation in the Amazon and take action to protect this valuable resource.

But the need for monitoring services doesn’t stop there. Water depletion, rising sea levels, rising temperatures and droughts are also important to track. 

GPS and personal safety

Space technology can also be utilized for personal safety, especially in remote or hard-to-reach areas. For example, with satellite-based SOS calling from smartphones, individuals in distress can have a lifeline even in regions without reliable terrestrial communication networks. GPS tracking devices can also allow individuals to be located in an emergency. Additionally, vehicle-specific services can provide real-time location tracking for different types of transportation, enhancing safety for both passengers and drivers.

Renewable energy sources

The energy sector is also in need of new, sustainable solutions. One such solution is a solar farm in space that can transmit energy wirelessly to Earth. Unlike ground-based solar farms, these space-based structures can be positioned in geostationary orbit, receiving sunlight 24/7, regardless of weather conditions. Energy can be transmitted reliably to Earth, paving the way for clean and renewable energy sources. Although this technology is still in its early stages, it holds immense promise.

What challenges do new tech companies have to overcome?

It’s evident that there is a tremendous potential for expansion in the space tech market. However, there are also challenges materializing. From a build-up of space debris to talent shortages, here are some of the most pressing concerns and what’s needed to overcome them.

Increased risk of collisions

The 2009 hypervelocity collision between the Iridium 33 and Cosmos-2251 satellites was a notable accident. Although navigation guidance systems are more sophisticated today, far more countries and companies are launching satellites into orbit in 2023. Cooperation between nations needs to improve to prevent collision incidents from happening. 

A build-up of space debris

Hypervelocity collisions, even between small particles, result in much space debris. Assuming space debris continues to expand because of accidents and abandoned and malfunctioning equipment, the “Kessler Syndrome” risk becomes increasingly likely. 

Rogue actors

The same volume economics, which makes the production of SmallSats and CubeSats feasible and benefits humanity, may fall into the hands of rogue actors, terrorists, and enemies of democracy, for their destructive purposes. Consequently, manufacturers must adhere to national and international security standards to mitigate the risk of industrial espionage.

Increasing regulation

Ensuring that standards are in place is crucial to mitigate some of the risks described above. As a result, space companies will have to stay on top of and comply with emerging regulations, such as the International Traffic in Arms Regulations (ITAR) or the Export Administration Regulations (EAR). Trusted Traceability software systems using intelligent “agents” and Blockchain will monitor vast numbers of data transactions of all data generators throughout the supply chain. This hasn’t been achievable before, but now it is.

Competitive work environment

As with any industry, the desire to be the first to market pushes companies to innovate. However, this also puts pressure on them to move quickly. Therefore, it’s best to strike a balance between pushing boundaries and being cautious, especially given space technology’s complexities and potential dangers.

Recruitment and talent shortages

Space engineering is a niche field that demands expertise in areas like propulsion systems, guidance and control, and materials science. Finding qualified candidates with these specialized skills can be difficult, which poses a challenge for businesses looking to fill open positions. New programs are required to build up a talent pool and build a diverse workforce.

What does this mean for the engineering department?

The definition of an aerospace engineer is changing

The structure of the space industry is changing because technologies are being repurposed from other industries. As a result, the space industry draws from many talent sources and disciplines beyond the industry itself.

Engineers with vital skills and experience needed by the space industry might not be “aerospace engineers” by training. And there’s an opportunity for engineers of various disciplines to enter the expanding space industry. A talent shortage means space companies must engage talent differently. They might hire for fractional roles, co-design with engineers in other countries, or partner with academics and competitors with valuable IP.

Engineers must factor in profitability and costs as well as design and feasibility

The miniaturization of electronic components and modules alters the price/performance ratio. As a result, there’s a lower barrier to entry for new startups.

Additionally, engineering disciplines now focus on profitability as well as invention. Therefore, in the new ecosystem, sourcing must be engineering-driven. To do that successfully, engineers must have access to the global sourcing marketplace and real-time commercial analytics, providing insights into lead time, availability, and price. Then, engineers use this data to optimize their designs upfront for high-priority business parameters.

3 considerations for emerging space companies

As new companies enter the Space Tech industry they should focus on building a culture that facilitates innovation. This means choosing technology that’s easy to use and enables efficiencies as well as setting relevant goals. Consider these three steps as you build your business:

1. Create a culture that fosters creativity

Inventing new products and services involves researching, brainstorming ideas, and creating prototypes. How do you foster creativity and novel ideas? It’s better to avoid rigid workflows or established best practices. It’s important for individuals to feel at ease with ambiguity and be able to adapt to changing circumstances. Workers of all positions must be versatile and collaborative, working together to uplift one another. Entrepreneurs and young engineers driven by their own innovative concepts will thrive in this environment.

2. Use flexible technology that’s easy to set up and requires minimal maintenance

You need suitable software systems in place to support an agile engineering process. Workflows should allow seamless collaboration with internal and external stakeholders rather than being too restrictive. Additionally, your chosen technology should be user-friendly, low maintenance, and easy to implement. Users should be able to load data, run the system, and connect with other applications independently, given that there may not be a fully-staffed IT department to provide support.

3. Define the right milestones

It’s necessary for every worker to feel like they’re making a difference and contributing to the company’s success. Objectives and Key Results (OKRs) are a common way to ensure that employees work on the right things and achieve their goals. In a mature company, OKRs focus on improving business metrics like lowering costs or improving product quality. However, in a startup, the goals may differ, such as creating the first working product that meets customer requirements or passing the first article inspection for the production version. Regardless of the specific objectives, having clear goals and metrics for success is essential.

See how Duro PLM benefits space tech companies

Duro works with leading space tech companies to help them streamline product development and manufacturing — lowering costs, boosting productivity, and improving product quality and team collaboration. Contact us today to learn more.

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