Future Business Models for Space Companies

Paper number

IAC-19,E3,6,6,x54800

Author

Mr. Frederick Slane, United States, Space Infrastructure Foundation

Year

2019

Abstract

Space companies have evolved over the past two decades or so from monolithic architectures to modular architectures for purposes of flexibility, cost and growth opportunities. New Space economics puts added pressure on the industry to integrate with terrestrial capabilities. Exploration and mining opportunities drive technological innovation. This paper explores the evolution of the space company business model and suggests that future successful space companies will adopt open architectures with industry standards to maximize business opportunities, growth and profits. The effect on contracts is developed to include procurement of systems, and insurance.
Old models relied on captured customers for decade long development programs and multiple decade operations. Very high cost was justified by national needs, as was indemnification under government contracts. Fast forward to the modern space era where new models are needed because those factors have changed. While still costly, space services are coming to market with costs in the hundreds of millions of dollars (US), not the tens of billions of earlier solutions. Monolithic architectures have given way to more modular concepts allowing for reduced costs over time.
This evolution has come at a cost of reliability and exposure to liability for system failures. The space industry is coming to face the challenges other industries have had to face and needs to adjust business models. Open architecture with industry standards of reliability, performance and interfaces is needed and will address reliability and liability challenges. Such an approach will also protect intellectual property from unintended transfer. Current market examples of successful application of this model and needs for future application are to be presented. The role of insurance companies and standards development organizations (e.g., ISO) are described. One example of the former is the proliferation of launch services across the globe. A second example of the latter is the integration of space payloads with spacecraft buses manufactured by different companies in different countries.
Possible IAC Tracks: D3- architectures; E3 – Economics

Abstract document

IAC-19,E3,6,6,x54800.brief.pdf

Manuscript document

IAC-19,E3,6,6,x54800.pdf (🔒 authorized access only).

To get the manuscript, please contact IAF Secretariat.