Amazon’s Cloud and E-Commerce Businesses Could Both Benefit from New Moves to Harness Satellite Communications

Summary Bullets:

• Amazon plans to apply its cloud computing business model to the provision of satellite communications infrastructure, while separately unveiling plans for a new satellite broadband Internet offering.

• Potential hurdles to Amazon’s new satellite business include the need to secure regulatory approval and intensifying competition from rival ventures such as Elon Musk’s SpaceX initiative.

Having established itself as a global e-commerce and cloud computing giant, Amazon is now looking to extend its technological prowess into space. A couple of projects, one of which is already underway, will see Amazon harness the power of satellite communications to unlock new commercial opportunities.

The first of these projects, AWS Ground Station, which Amazon announced last November, involves the construction of 12 “ground stations”, antenna-equipped facilities that will support satellite-to-ground communications. Amazon plans to rent out the use of its ground to satellite network infrastructure to firms and public sector organizations that need access to satellite data, including visual images of the Earth’s surface.

Many government agencies, educational institutions, and private firms already use satellite data for a range of purposes. However, those that lack their own ground station and transmission infrastructure typically face high costs and frequently refer to the complex process of dealing with satellite communications firms when uploading and downloading data. Amazon aims to address these challenges by providing customers with a more flexible and cost effective way of accessing satellite data, based on the replication of its elastic demand cloud computing model. Amazon’s “satellite-as-a-service” will allow customers to download satellite data on a pay-per-use basis. Proximity of the new network of ground stations to Amazon’s cloud data centers means that Amazon will be able to offer complementary services, including data processing, storage, and analytics.

The second of Amazon’s space projects, announced in April, involves the deployment of over 3,000 satellites in Earth’s low orbit, which it will use to deliver high-speed broadband Internet access to people around the world. Amazon’s so-called Project Kuiper aims to specifically provide connectivity to “unserved and underserved communities”. Maintaining the satellites in low orbit will make them less costly to operate than traditional satellites, while also making it easier to offer lower latency communications. Although Amazon has not yet revealed how it will launch the satellites into orbit – or whether it will build or buy the satellites – Amazon CEO Jeff Bezos has his own spaceflight company called Blue Origin, which could be used as part of the process.

Despite possessing considerable infrastructure and financial resources to back its new satellite business ventures, Amazon’s race to the cosmos won’t go unchallenged. Potential hurdles include the need for Amazon to secure approval from the Federal Communications Commission (FCC), which will scrutinize Project Kuiper according to criteria that include Amazon’s plan to decommission satellites that have reached “end of life”. It’s also likely that Amazon’s recent move to exploit the power of satellite to deliver broadband communications will provoke a competitive response from other companies that are targeting this opportunity. They include Elon Musk’s SpaceX initiative, which last year launched two test satellites for its Starlink network, and which ultimately plans to operate a constellation of 4,425 satellites. Going forward the potential is strong for Amazon, SpaceX and others to clash on several fronts, not least in the battle for skilled personnel to design, build, and operate their new satellite businesses.

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