I recently published a report profiling six Earth Observation (i.e. NewSpace) firms that included how each firm goes-to-market, their target markets, their capabilities, and other attributes. When I learned that IoT is the essence of one of the six firms – Fleet Space Technologies, headquartered in Australia – I became very interested.
Because I believe that Internet of Things (IoT), which is a fusion of information and telecommunications technologies, is going to reshape the dynamics of our marketplaces and our lives. As an aside, one of two major insurance IoT reports that I wrote got me invited to London and NYC to chair two insurance IoT conferences.
I also believe that NewSpace will become an increasingly important source of data, imagery, analytics, and other services for the (re)insurance industry.
Put the two together, IoT and NewSpace, and the result is the start of a new wave of capabilities marrying space and terrestrial geo-capabilities and concomitant services. (Re)insurers should consider experimenting with, if not actually deploy these capabilities for, at a minimum, product development, underwriting, claim adjudication, and target marketing (where allowed by regulations and laws).
Let’s discuss IoT and Fleet Space Technologies.
What is IoT?
IoT is a continually increasing number of interconnected objects that have IP-addressable sensors embedded in or attached to them. The objects could be physical artifacts, animals on land or in the oceans, flora or fauna, or people.
Like a natural ecosystem, IP capabilities enable IoT objects to sense and respond to other IoT objects and the surrounding environment (whether the surrounding environment includes IP-embedded objects or not).
[And yes, there is another post, if not several posts or an essay or a book, that could (should ?) be written about the emerging IoT Ecosystem including its attendant issues and implications for society, markets, and industries from the perspective of the (re)insurance industry.]
As importantly to consider, the IoT will expand over time until it becomes a digital layer of web-connected objects around the globe. Essentially, our species is overlaying our planet’s natural ecosystem with a global digital communication information-enabled ecosystem of interconnected living objects including tangible and intangible artifacts.
As an example of some IoT capabilities, consider the following diagram. Without getting into each element of the diagram, IoT capabilities encompass both passive and active monitoring and management. There will be extensive flows of data (almost all unstructured) moving among and between IoT objects, data repositories, analytical engines, user-friendly (I hope) dashboards, alerts, and responses.
[I feel that a video clip from the 1974 Gene Wilder Frankenstein movie is needed here. You know, the one where the mad scientist screams “it’s alive, it’s alive!!!”. You’ve just have to imagine it or Google / YouTube it.]
In summary, IoT will be wrapped around our planet.
(As a note, the titles of the two IoT reports I wrote are: “The IoT Creates New Insurance Product and Service Opportunities” in 2015 and “Managing Inland Marine Insurance on an IoT Platform” in 2016.)
Let’s move on to Fleet Space Technologies. The following discussion is directly from my recent report profiling six NewSpace firms including Fleet Space Technologies. The report is titled: “Profiling Six NewSpace Firms: An Insurance Industry Perspective” and is available for free to any person wanting a copy.
There is significantly more detailed information about Fleet (and the other five NewSpace firms) in my report for each of the sections shown below.
Fleet Space Technologies
Fleet Space Technologies is a telecommunications firm that builds a wireless infrastructure tying together IoT devices (sensors and hubs) and orbiting satellites. Using an interdependent bridge connecting IoT devices and satellites, Fleet provides a data flow that enable clients to optimize the management of their physical assets whether the assets are equipment, facilities, or animals. (Note: Fleet is also helping manage bees. How would you like to put sensors on those little rascals?!)
Fleet Space provided me the following visual snapshot of their NewSpace firm which I’ll let speak for itself:
Genesis, location, and employee information
Capitalizing on a moment of ‘aha’ is the genesis of launching Fleet Space Technology. The two Fleet co-founders, one an expert in space operations and the other a serial entrepreneur, realized that combining IoT and orbiting satellites would generate information that clients, specifically those hampered by a lack of connectivity, could use to manage their terrestrial assets.
Launched in 2015, Fleet brings highly skilled engineering, telecommunications, and satellite professionals together in four locations around the world to create NewSpace solutions based on two of society’s emerging technology areas: IoT and commercial satellites.
Strategic, investor, and revenue model information
Combining the elements of IoT (specifically IoT sensors and hubs), orbiting satellites, and geographic areas restrained with limited or no wireless connectivity encompasses Fleet’s value proposition. The value proposition has attracted two investors to-date and taken the firm through a Seed Investment round with a Series A investment round that will be announced late 2Q19 or early 3Q19.
I think that Fleet has a strong sense of what the firm needs to accomplish to be successful: and that is to become self-sustainable after launching 10 satellites. I question if that number of satellites or constellations of satellites is sufficient for self-sustainability given the industries and the locations of the industries that Fleet is targeting.
I believe that Fleet’s primary and secondary revenue sources leveraging the NewSpace and IoT physical assets that the firm uses should generate a reasonable level of baseline revenue. However, I also believe that selling access to hardware devices, including selling network access license fees per connected device, will prove inadequate to long-term success. I think that Fleet’s strategy should quickly move to data products (including analytics and models) and, more specifically, to offering subscriptions to clients for the use of the various data products. (Since I published my report, Fleet told me that I should ‘stay tuned’ to announcements of their new revenue generation initiatives.)
Fleet is targeting a half-dozen industries whose facilities and/or operations are, at times, located in areas without any or adequate connectivity. Moreover, all of these industries have physical assets that are candidates to be outfitted with IoT devices (including farm animals and bees, as examples of Fleet client applications). I believe that Fleet’s use of SIs to go-to-market is a strong, logical approach for a new firm.
Although the insurance industry is not a Fleet target market, per se, the firm considers the insurance industry as a client for the data that Fleet’s IoT – Satellite infrastructure creates. I believe that risk managers of the companies in the non-insurance industries that Fleet is targeting will require risk-based information for their risk planning, Risk Management Information Services, and/or for any Alternative Risk Transfer vehicles they participate.
Fleet’s solution is primarily to provide inexpensive connectivity solutions tying IoT sensors and actuators anywhere in the world. The IoT connectivity that Fleet provides enables clients to create analytically-driven insights. If Fleet decides not to create the insights or work closely with companies in their target industries to create the insights, I recommend that Fleet partner with technology firms that offer analytical capabilities to Fleet’s target clients.
Solution dependency information
Fleet does not use any existing government satellites but instead depends on the satellites (actually, nanosatellites) it launches. Fleet plans to launch 100 nanosatellites into near polar orbit every three years. As of February 2019, Fleet has four nanosatellites in orbit.
Fleet is obviously dependent on the number of satellites in the constellation that remain in orbit. I assume that Fleet has plans to replace nano-satellites that come out of orbit (and burn up in the Earth’s atmosphere). If yes, then Fleet is also dependent on the new capabilities they build into the new nano-satellites the firm eventually launches as replacements.
Fleet is also dependent on the capabilities of the IoT sensors it deploys for clients or that their clients deploy.
Technology and data information
Fleet relies on LoRaWAN wireless architecture, Edge computing hardware, and data analytics to collect and analyze the 100 bit messages collected each day. Fleet’s system sends the end-to-end encrypted data from the satellite links (capturing IoT sensor data) to AWS and/or to client’s premises.
I believe that because many (re)insurance companies want to access pre-analyzed data that Fleet should find a willing audience to pilot and/or purchase Fleet’s data from the IoT-Satellite wireless bridge.
Client training information
Fleet states that they don’t offer training to clients and that their system has been designed with clients needing very few geospatial / analytical skills. However, Fleet told me they are considering offering webinars to assist clients use Fleet’s solutions.
Roadmap and exit plan information
Fleet’s roadmap consists of planning to launch a new constellation of nano-satellites every three years. I hope that Fleet alters this roadmap to include creating strong partnerships with technology firms offering (advanced) analytical solutions to Fleet’s target clients, including (re)insurance clients.
The firm states they have no plans to exit. I believe that if Fleet remains primarily a hardware provider or a Telco provider of IoT data that they will find themselves into an unsustainable financial position.
Obviously I believe the combination of IoT and NewSpace will create a set of capabilities that (re)insurers can’t ignore. And I must note that Fleet is not the only NewSpace firm to use IoT in some fashion even if the firm doesn’t provide the IP-embedded / attached sensors as part of their business model.
But for both you and me, several questions remain, including but not limited to:
- What are the best ways for (re)insurers to use NewSpace and IoT capabilities?
- What questions should (re)insurers ask NewSpace firms to determine their financial viability?
- Are (re)insurers in a position (i.e. do they have the resources and infrastructure) to experiment with / deploy NewSpace and IoT capabilities?
- Do (re)insurers want to use the raw data from the IoT feed captured by NewSpace satellites … or do (re)insurers want some level of massaged data / analysis of the data (or both)
- If (re)insurers want to integrate the data feed into their SoR, SoE, or SoI from the IoT flows captured by NewSpace firms, how can they accomplish that objective?
- How much do (re)insurers want to know about NewSpace to feel comfortable doing business with a NewSpace firm?
- For that matter, what do (re)insurers know about IoT, specifically the data flows from IoT objects and how the data could be used to assist getting and keeping customers?
Are you ready to use IoT-driven NewSpace capabilities? What are your concerns?