YVONNE WASSENAAR: Drones are doing particularly well in industries that are ripe for development, offering a burning platform for change, and where there is a good alignment of regulatory support. For example, measuring stockpile in a mine, inspecting a roof top for the insurance industry etc. It's easy to see how a drone can replace much of the mundane and repeatable work humans do with a much higher degree of efficiency and safety.
Industry disruption can also throw up new opportunities. Remember what Uber and Lyft did to the taxi transposition industry? This may be the case for drones as well. When a new player does something so revolutionary and innovative that both economics and engagement change, competitors either follow or go out of business.
Industries such as mining and construction tend to have a high level of comfort with drones because some of their workers were initially drone hobbyists. I remember one customer of Airware who, years back, duct taped an iPhone at the bottom of a drone to start playing around with measuring stockpiles. This type of experimentation helped these industries find use cases for drones that, combined with today's more permissive regulatory environment, is driving adoption. The commercial insurance and property management sectors also come to mind.
Drones are allowing these industries to do rooftop and building inspections with both feet firmly on the ground, reducing the risk of casualties and fatalities. Additionally, these companies are starting to do predictive work using drone analytics and machine learning to better manage their capital expenditures.
The other sector, which stands to benefit tremendously from drone-use, is agriculture.
It's easy to see how a drone can do much of the mundane and repeatable work that humans can do, but with much higher efficiency whilst ensuring a far higher degree of safety.
YVONNE WASSENAAR: Not many people have been to a mine so they don't necessarily understand the challenging work environment. In a given year, a mine might dig up 136 million tons to produce 1.2 million ounces of gold. This requires blasting, digging, loading and crushing, with lots of large equipment driving around an everchanging site that runs 24/7. Safety in these environments is critical. Part of creating a safe environment is the management of high walls and safety blocks along the haul roads, along with measuring the grade and width of the haul roads themselves. In the past, this had to be done manually. Now it can be done automated, leveraging drone imagery and machine learning.
Because mining is linked so heavily with commodities, operations economics are critical. Drones not only improve safety, they also make tasks more efficient. Measuring stock piles takes minutes, not hours. Managing the grade and width of haul roads can improve fuel efficiency. Sometimes a mine might spend 20% of its operating cost on fuel alone, so small percentage improvements mean big bottom line benefits.
YVONNE WASSENAAR: I hear a lot of debate around the cost of data storage on Cloud. The Cloud is perhaps the only practical way to manage data, enrich and provide access to drone analytics in the long term, unless you are an extremely large company.
Airware leverages Cloud very effectively and the benefit reaches well beyond just the storage of data. In the past, we had a customer who had terabytes of drone flight data sitting on storage drives in the corner and ultimately had to stop the drone program because all that data was meaningless. By leveraging Cloud, data collected via drones becomes accessible. It is easy to compare it from one date of collection to another. The data is also easy to visualize, annotate and collaborate across a site and around the globe. Moreover, Cloud makes it easier to access burst compute power required to do value added machine learning.
YVONNE WASSENAAR: The regulatory environment is crucial. The issue is that the advancement of drones has been challenging for regulators to understand and manage and that is holding back innovation. Thankfully, there is awareness that should the challenges surrounding regulation not be addressed, as a country, we will become less competitive in this shapeshifting industry.
Airware has a regulatory expert on its staff and from the beginning, we have been actively involved in helping drive commercial drone regulations by testifying as an expert before Congress and serving on standards committees both in the United States and abroad. What we're pushing for is a more agile approach and hopefully we'll get to what I call the "common core". Every country will have its unique set of regulations but if we can get to a place where there is uniformity in basic and minimum standards that companies can expect, it will be a tremendous win!
To achieve the value that drones can bring, businesses need to have the ability and regulatory permission to fly beyond the visual line of sight, for instance. Another pressing insistence is that one operator should be allowed to control multiple drones and fly over areas that might have people. Significant work is being done around tagging of drones - how do you identify specific drones flying in a particular airspace? There's also a lot of work being done around advanced airspace management, drone flight path, anti-collision ability, etc. Hopefully, all of these things combined, will make regulators feel confident that a flying robot can be effectively controlled in any scenario and that quick corrective action can be taken should something start to go wrong.
YVONNE WASSENAAR: This might be a surprise but I personally know the CEOs of Airware's top competitors and speak to them on a regular basis. That's really a reflection of how early we are in the market. We all realize the tremendous potential for growth ahead - we are just at the tip of the iceberg of what's possible. The biggest barrier for a commercial drone company's success today is the lack of large scale adoption. We do not necessarily want to fight over the same piece of the pie but expand the pie itself. The successful expansion of drone usage into new companies is a win for all of us.
A great example of our collaboration is the future of mobility group pulled together at the World Economic Forum (WEF) so that a variety of different players can work on regulatory recommendations.
YVONNE WASSENAAR: Technological progress will fundamentally reshape our work, our companies and our society. I'm a strong advocate that we need to rethink not just what we're doing with our workforce but also how we educate our youth and prepare them to be workers of tomorrow.
What we need to do is embrace the potential for change early on versus running away from it. In my experience, people avoid change. It makes them feel uncomfortable to think about things differently or reimagine life.
YVONNE WASSENAAR: There is financial pressure but I think much of this comes from the psychology that the new future is going to have horrible outcomes so it's better to ignore it. Ironically, if people think creatively and start early, they can craft a much more positive outcome.
I would advise companies to plan early, think about reinvesting some of the benefits and be thoughtful about engaging the workforce because workers are creative. They help identify new innovations if they don't feel burdened by physically challenging tasks, which technology can easily replicate.
Every country will have its own unique set of regulations around drones, but if we can get to a place where there is an uniform minimum standard that companies can expect across geographies that they operate in - that will be a tremendous win!
YVONNE WASSENAAR: As easy as it is to conceptualize the amazing things drones can do, it is far tougher to execute. The sector initially attracted immense funding based on its potential. Subsequently reality set in. The proliferation has been driven by sophistication in drone technology but that has taken time. The regulatory environment was not permissive enough and as a result, businesses weren't convinced that the benefits were crystal clear for them to start writing big cheques. The market did not materialize as fast as people had expected.
But the market momentum is accelerating now because we are at that sweet spot where regulations are beginning to change in favour of drone technology. Hence business cases are stronger and machine sophistication is far more reassuring. You will see consolidation; the less productive firms will be weeded out.
YVONNE WASSENAAR: We have now moved from the experimentation phase to the value realization phase. Already, repeatable solutions have been proven so customers are working towards capitalizing the benefits.
Innovation will dominate the next phase of growth. We will not only replace processes with ones that add better value, but also start integrating data streams and building predictive analytics.
I firmly believe that winners in this marketplace will be those who capitalize on the value realization component and drive up revenue to that $100 million mark while demonstrating their ability to lead the next phase of innovative change.