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Space Markets
Nov. 15th, 2005 09:56 amAlso on AtomicRazor!
There are some interesting discussions going at the moment about SpaceX and the Falcon programme they are working on. SpaceX is actually rather interesting, not only is it funded by a billionaire, but it is funded by a fan billionaire who is prepared to spend pretty much everything he has. I suspect that means until he's down to his last few tens of millions, but hey, a guy's gotta live.
Elon Musk is a South African, a nationality I admit to having more than a personal aquaintance with and he certainly fits the bill. He's currently got a law suit going with some of the big boys about unfair business practises. A part of me is worried about that. Sendo, the now defunct British mobile phone company, had a good business in writ serving, but it still went under.
That's a whole other post. I'm more interested in the idea that once they crack the cost to orbit issue, the market will explode.
I'm a skeptic on this. For a start, I'm not convinced the price elasticity of the market is quite that high, there are too many other factors involved. One argument is that once launch cost is lower, there will be a different paradigm for designing and building such essentials as com-sats. The logic goes something like this:
"A comsat has to work, you can't get to it when it's up there, and they're expensive to replace if they go wrong. So you spend a fortune over engineering them and making damn sure they don't break."
It sounds lovely, it sounds beguiling. But you then have to figure in the way that businesses think and operate. Why pay for Windows when you, as a major bank, could do everything OpenSource? Why buy expensive clothes when you could replace cheap ones more often. Ok, so the last one is a spurious argument, but into this comes what Terry Pratchett calls "Vime's Law". To whit: a poor person buying a $5 pair of boots will spend more in a life time than a rich person who buys a long lasting $50 pair. I wonder how much of that effect would come into low cost sats for business critical operations?
Space is an inhospitable environment, hardening technology to work out there is pricy. For things to work, there is going to be an absolute rock bottom cost you can't get around and then how do you handle down time? If you are designing for things to fail, you'll need to have multiple layers of redundancy all of which increases the price.
The constellation satellites which were meant to drive the new industry failed because a new paradigm destroyed mass market global sat phones.
I'm still concerned that the Killer App is out there and we still haven't seen it.
Worse. There might not be a killer app.
There are some interesting discussions going at the moment about SpaceX and the Falcon programme they are working on. SpaceX is actually rather interesting, not only is it funded by a billionaire, but it is funded by a fan billionaire who is prepared to spend pretty much everything he has. I suspect that means until he's down to his last few tens of millions, but hey, a guy's gotta live.
Elon Musk is a South African, a nationality I admit to having more than a personal aquaintance with and he certainly fits the bill. He's currently got a law suit going with some of the big boys about unfair business practises. A part of me is worried about that. Sendo, the now defunct British mobile phone company, had a good business in writ serving, but it still went under.
That's a whole other post. I'm more interested in the idea that once they crack the cost to orbit issue, the market will explode.
I'm a skeptic on this. For a start, I'm not convinced the price elasticity of the market is quite that high, there are too many other factors involved. One argument is that once launch cost is lower, there will be a different paradigm for designing and building such essentials as com-sats. The logic goes something like this:
"A comsat has to work, you can't get to it when it's up there, and they're expensive to replace if they go wrong. So you spend a fortune over engineering them and making damn sure they don't break."
It sounds lovely, it sounds beguiling. But you then have to figure in the way that businesses think and operate. Why pay for Windows when you, as a major bank, could do everything OpenSource? Why buy expensive clothes when you could replace cheap ones more often. Ok, so the last one is a spurious argument, but into this comes what Terry Pratchett calls "Vime's Law". To whit: a poor person buying a $5 pair of boots will spend more in a life time than a rich person who buys a long lasting $50 pair. I wonder how much of that effect would come into low cost sats for business critical operations?
Space is an inhospitable environment, hardening technology to work out there is pricy. For things to work, there is going to be an absolute rock bottom cost you can't get around and then how do you handle down time? If you are designing for things to fail, you'll need to have multiple layers of redundancy all of which increases the price.
The constellation satellites which were meant to drive the new industry failed because a new paradigm destroyed mass market global sat phones.
I'm still concerned that the Killer App is out there and we still haven't seen it.
Worse. There might not be a killer app.
