Google in Space? Startup Disruption Reaches the Final Frontier Wall Street Journal
By Robert Wall 7:47 am ET Sep 17, 2014
A SpaceX launch from Cape Canaveral, Fla., in 2012. —Orlando Sentinel/ZumaAre Google and Facebook a new breed of competitors for aerospace and defense behemoths like Boeing BA -0.03% and Airbus Group EADSY -1.16%, or a potentially emerging market?
For years, large aerospace and defense companies have rarely had to worry about startup rivals. Barriers to entry are huge on the commercial-aerospace front, where developing new jets can require more than $10 billion in capital outlays, while defense contractors enjoy close ties with their national governments that newcomers struggle to match.
The serial entrepreneur Elon Musk has upset that world view, though, with his SpaceX rocket venture, which offers satellite makers launches at rates other Western companies struggle to match.
SpaceX has begun to shake up the established landscape and on Tuesday won a coveted contract from the National Aeronautics and Space Administration to develop and fly a capsule to ferry astronauts into orbit. Space Exploration Technologies, as the company is formally called, won a $2.6 billion contract alongside Boeing, which snagged a $4.2 billion deal.
The startup also has forced Airbus to acknowledge that Europe’s current construct for building rockets isn’t sustainable, and has driven the European aerospace leader to team more closely with engine maker Safran to develop a less costly operating model for future launchers. Boeing and Lockheed Martin LMT +0.37%, which supply rockets to the U.S. military and intelligence community, also are feeling the heat from SpaceX.
With that backdrop, the decision by Google to buy drone maker Titan Aerospace in April and Facebook’s purchase of British aerospace company Ascenta for $20 million have raised the question of whether technology companies will muscle in on other areas traditionally dominated by more-established aerospace and defense contractors.
“They certainly are sitting on a lot of money and could do a lot of things in the marketplace where we have expertise,” Craig R. Cooning, president of Boeing’s Network & Space Systems unit, said in an interview. “We would rather collaborate with them than compete with them.”
Defense contractors in particular have a poor track record serving commercial markets, where upfront investments rather than government-financed developments are the norm.
Mr. Cooning acknowledged the markets are widely different. “The commercial business is completely different from the defense business. It becomes more the art of the deal” than the structured processes used on military projects, he said, adding that “I think because of our experience, particularly in the commercial-satellite market, in creating deals that are win-win situations for both us and our customer, that base enables us to work with the tech giants.”
Boeing last week announced its first commercial order for the 502 Phoenix satellite from HySpecIQ. The two satellites will feature a hyperspectral sensor, a camera that can record more than 200 spectral colors to provide a more complete map of the earth, including vegetation and minerals. Mr. Cooning said the output could appeal to Google in the tech giant’s quest to create fuller representation of the world. Google declined to comment.
http://blogs.wsj.com/digits/2014/09/17/google-in-space-startup-disruption-reaches-the-final-frontier/?mod=yahoo_hs
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