Up, Up, And Away | Accenture...3 | Up, Up, & Away: Harnessing Opportunity in the Stratosphere Disruptive Innovation World View is the first business to commercially offer an affordable,

AWAYHARNESSING OPPORTUNITY IN THE STRATOSPHERE

UP, UP, AND

2 | Up, Up, & Away: Harnessing Opportunity in the Stratosphere

Disruption is everywhere we look these days, with profound positive implications for the global economy. Advancements in infrastructure and technology have always transformed industry and opened up new realms of economic opportunity. Routine and affordable commercial flight created a new travel and transportation industry; cell towers sparked the birth of wireless telecommunications; and rockets birthed the possibility of the space industry. World View is pioneering technology that we believe will have a similarly profound effect—a platform with endless commercial application that will unlock an entirely new economy in the stratosphere—the modern high-altitude balloon, otherwise known as a Stratollite.1

—Jane Poynter, Chief Executive Officer, World View Enterprises


Disruptive InnovationWorld View is the first business to commercially offer an affordable, long-duration, persistent high-altitude flight platform using a proprietary and tested method of stratospheric balloon control. This station-keeping balloon platform is known as the “Stratollite.” As a software-enabled platform, these Stratollites have been identified by Accenture leadership as a technology that will unlock numerous commercial applications and generate significant opportunities for the firm. With Google and World View Enterprises leading the high altitude balloon R&D effort, there is great promise for this disruptive technology in the global marketplace. As the technology roadmap for stratospheric platforms unfolds over the next several years, we will see manufacturing and supply chain efficiencies take hold as development ramps up—driving down cost, accelerating market impact, and opening up new opportunities in the A&D sector and beyond.

The Space RaceWith companies like Blue Origin and SpaceX vying for the spot as low cost suborbital and orbital launch providers, the space launch service business model is changing. High altitude balloons are expected to become highly efficient deployment platforms for quick and inexpensive access to space. The high altitude balloon itself can act as a connectivity and geo-spatial asset while hosting both communications and earth observation payloads. With increased M&A in the A&D space, it’s highly likely that larger A&D firms will invest in the acquisition of small innovating companies developing high altitude balloon platforms.

Asia and Middle East Growth Emerging and developing economies within Asia and the Middle East are catching the attention of Defense firms as they turn to these markets for opportunity to capture and accelerate growth. With commercial air traffic growth in Asia and the Middle East outpacing other regions of the world, there is a growing need for increased connectivity and geo-spatial intelligence. With little infrastructure available on which to rely, the stratospheric balloon offers an inexpensive solution for immediate serviceability for the growing needs of these regions.

Accenture pays close attention when the horizon promises new technological advancement that will have world-wide impact. Accenture is exploring the high value commercial applications and promise of stratospheric platforms on industry and the global market. Together with World View, we at Accenture have found that stratospheric balloon technology is projected to have a global market impact in three of the four strategic pillars that anchor the agenda for Accenture A&D executives.


THE HISTORY OF THE BALLOONThe history of the balloon dates back to the Chinese Empire around 200-300 A.D., when the Chinese Empire used flying lanterns for military signaling. The Mongolian Empire marked the introduction of balloon technology to the Western World 1000 years later, when they used them for their invasion of Eastern Europe in the early 13th century. By the 1700s, the Montgolfier brothers lifted the first human approximately eighty feet off the ground in the first controlled flight of a hot air balloon. The gain in altitude and flight time associated with using light gas instead of hot air drove further innovation and, in the same century, the first manned hydrogen balloon reached almost almost two-thousand feet and to clock in a flight time of just over two hours. Helium and hydrogen quickly became the standard for fueling high altitude balloons and they became critical for scientific research applications in the fields of weather and early aviation.

Despite promising early progress, the innovation in balloon technology plateaued sometime in the 18th century until the late 1920s when there was a spark of innovation in stratospheric ballooning. Unfortunately, this push was soon eclipsed when the United States and Soviet Union engaged in the space race of the mid-20th century, focusing on going much further than the stratosphere. As a result, both balloon manufacturing techniques and ballooning capabilities stalled; however, removed from the space race, India continued to build upon balloon innovation. The Tata Institute of Fundamental Research (TIFR) was founded in 1945 where Dr. Homi J. Bhaba began sending balloons up to the stratosphere to study secondary cosmic radiation. India now stands as a world leader in balloon engineering and stratospheric science, inspiring a new breed of balloon innovation. Now, companies like World View and Google are building upon the successes of TIFR and establishing a hub for stratospheric balloon innovation in Tucson, AZ and San Francisco, CA.

In 1783 the Montgolfier brothers lifted a human to an altitude of 80 feet in a hot air balloon. In the same century, using hydrogen, a manned balloon reached nearly 2000 feet and lasted over two hours.


Balloons in the 21st CenturySince the 1940s, hardware and electronics advanced in performance and decreased in size so balloons these days take a different physical form than they used to, but for the most part, they are conceptually the same vehicles they once were. Unfortunately, many people in the broader public sphere consider high altitude ballooning to be little more than a hobby. In fact, the barriers to entry in the hobbyist space are quite low, giving high schoolers and college students the opportunity to experiment with small latex weather balloon projects. With that said, heavy-lift high-altitude ballooning is a whole different ballgame. It’s a complex process, and, historically, has been riddled with capability barriers that have prevented commercial market penetration.

Even the most sophisticated NASA balloons are handicapped by the fact that flight paths simply cannot be easily controlled. Wind patterns encountered during flight are variable and fairly unpredictable, making a balloon’s trajectory hard to anticipate and incredibly difficult to steer. As a result, the use-cases for such platforms have been limited mostly to scientific research, with no meaningful commercial applicability. Ultimately, this makes balloons largely irrelevant to the vast majority of people and enterprises; as a result, stratospheric balloons did not receive the same R&D attention as other aerospace and astronautical endeavors. However, a few key organizations and individuals have begun to solve the issue of high altitude balloon

navigation to open up the commercial application and viability of this seemingly forgotten technology.

Google seeks to be a trail blazer of the stratosphere. Google’s Project Loon is investigating the usage of high altitude balloons for remote Internet service delivery around the globe. World View has developed a high altitude balloon platform to carry both humans and various scientific payloads and un-crewed sensor platforms for communications and Earth observation. World View captured the world’s attention in 2014 when they carried Google executive Alan Eustace 41km above Earth’s surface via high-altitude balloon where he broke the world record for longest free fall jump—eclipsing the record set by Felix Baumgartner in 2012 of 39 km.2 World View and Google are currently developing technologies that tackle the technical challenges necessary for sustainable controlled balloon flight. When coupled together, these elements fuel public interest in stratospheric flight and drive innovation in balloon engineering. Innovation which stands to open a host of use cases for high altitude balloons that are poised to jumpstart a whole new stratospheric economy, and potentially impact and revolutionize the global economy in the process.


SPACE TOURISM AND COMMERCIAL INDUSTRY APPLICATIONSpace Tourism“There was a startling recognition that the nature of the universe was not as I had been taught…I not only saw the connectedness, I felt it…I realized that this was a biological response of my brain attempting to reorganize and give meaning to the wonderful and awesome processes that I was privileged to view.”3

Apollo 14 astronaut Edgar Mitchell, said this in an attempt to articulate his experience on his first and only spaceflight in 1971. Upon his return to Earth, Mitchell uncovered in ancient literature a description called ‘savikalpa samadhi’—the highest spiritual state of consciousness. According to Mitchell, this means that you see something normally, but experience it “emotionally and viscerally, as with ecstasy, and a sense of total unity and oneness.” During the late 20th century this feeling, expressed by numerous other astronauts, became widely known as the Overview Effect.

Many space sailors return home and vocalize similar accounts of the Overview Effect. Seeing the Earth from space creates a cognitive shift in awareness of the human self and the human existence—a booster shot of wisdom that brings the swift and impactful realization that we are far less significant than we perceive.

The Overview Effect is the core motivator for the idea of space tourism. Getting to orbit is prohibitively expensive, and using rockets to bring space tourists in any sizable number to orbit is an unreasonably expensive endeavor; however, using high altitude balloons in lieu of launch vehicles presents an attractive alternative. World View plans to sell tickets to experience the Overview Effect at the edge of space using its Voyager spacecraft, an astronaut-piloted capsule hoisted ~31km above Earth via high altitude balloon.

World View is offering this trip to the edge of space for $75,000 per seat, far less than either the $250,000 suborbital rocket ride offered by Virgin Galactic or the $50M+ dollar sticker price that space tourism industry competitors offer to reach orbit.

Space Tourism

High Altitude Balloons

$75,000$250,000

$50M+

Spaceplanes Rockets (or Spaceships)

Cost per seat


Much like an ice-cube floats atop water, the Voyager spacecraft sails atop 99.9% of Earth’s atmosphere, offering passengers a view of the world from space on the order of hours as compared to minutes with sub-orbital rocket experiences. World View’s space tourism experience calls for no special spacesuits, no medical requirements needed for flight, no pre-flight training, and even offers an on-board bar and internet connectivity to communicate with friends and family below during flight. While the analogy of an ice-cube floating on water sounds simple, the Voyager operations are not. This platform is the most complex and capable balloon in existence. Perhaps in the next several decades the world will see more regular and routine private travel to the stratosphere; perhaps even with ticket prices as affordable as a first class transcontinental flight.

As exciting as space tourism via high-altitude balloon sounds, innovations like station-keeping and balloon trajectory control offer unprecedented stratospheric market potential above and beyond the ultra-high net worth individual space tourism market. High altitude balloons capable of maintaining long duration flights across predetermined flight paths and hovering above cities and other areas of commercial and scientific interest will open up a host of opportunities. Early identified and targeted applications include global communications, Earth observation, and weather surveillance. These high-altitude balloon platforms will help enable a host of technologies with multi-faceted industrial use cases that have the potential to profoundly impact the global economy at large.

Commercial Industry Use Case Impact Today’s world of communications and Earth observation is enabled by the infrastructure and technological platforms that hold the critical payloads that provide these services. Generally, telecommunication and scientific payloads are hosted by towers, drones, planes, or satellites—each with their own advantages and disadvantages in quality of service, reach, and cost.


For research and development, each of these platforms are well studied, well understood, and well developed. While each technology sees incremental improvement in capability year after year, the platforms themselves are bounded in performance by their operational environment—ground for the towers, low atmosphere for drones and planes, and space for satellites. Satellites and planes generally provide expansive and less reliable coverage at a higher price point while drones and towers generally provide more reliable and less expansive coverage at a lower price point.

The harsh vacuum of space and the significant speed necessary to reach and maintain altitude equate to high start up costs and operational expenses, ranging

anywhere from the low millions of dollars to a few hundred million dollars. Satellites are launched with rockets so that they can be deployed to orbit at speeds of faster than 15,000 mph. At such velocities and altitudes, operating payloads can become complicated. Obtaining, preparing for, and ultimately reaching a geo-stationary orbit, in order to provide persistent coverage similar to the new station-keeping capabilities of high-altitude balloons, can cost hundreds of millions of dollars, making viable commercial applications sparse. Low earth orbit is less costly to attain but results in more complicated operations due to the increased velocity relative to the target.

EARTH OBSERVATION PLATFORMSPlanes BalloonsDrones Satellites

Coverage Area:

Res/Exposure:

Revisit Rate:

Modularity:

Cost:

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ALT

ITU

DE


Despite these downsides, the higher altitude platforms provide great geographical coverage relative to alternative platforms, which is beneficial in many earth observation and communications applications.

High and low altitude drones are inexpensive relative to satellite platforms as they are generally operated at a lower mass, velocity, altitude, and flight time. In effect, their resultant service benefits from shorter distance to target and smaller relative velocity but provides less geographic coverage per flight. Even with these pros and cons, the maintenance and operational costs of drones exceed those of station-keeping high-altitude balloons when long-duration persistence is needed. Balloons can stay aloft for days, weeks, and even months, while drones must return to Earth for frequent maintenance, limiting their duration capability.

Towers represent the least expensive option for Earth observation and communications, as they amount to a single standing structure that can host many different payloads, without the need to haul heavy equipment through or above the atmosphere at high speeds. Although the platform is inexpensive, it is highly limited in geographic coverage, which results in minimal scope when it comes to providing Earth observation or communications service.

It would seem that a technology that can provide expansive and reliable coverage at an affordable price point would be the pinnacle platform for the world of telecommunications, Earth observation and remote sensing. Conveniently, a stratospheric balloon offers the benefits of operating at a high altitude with none of the disadvantages associated with the requirement to maintain altitude with a high velocity. Operationally floating between the altitude of a satellite and plane, the high altitude balloon experiences a favorable distance to target and is not hindered by a high velocity relative to the area of interest; this means on-board communications and Earth observation payloads enjoy both decreased signal attenuation and increased signal resolution. Furthermore, loitering over one location on the surface increases Earth observation payload exposure time.

Conveniently, a stratospheric balloon offers the benefits of operating at a high altitude with none of the disadvantages associated with the requirement to maintain altitude with a high velocity.


Global CommunicationsThe idea of global communications is still mainly conceptual to planet Earth. Satellite constellations currently in service boast global real-time communications, but customers are never fully satisfied with the end product delivered by these space-based communications service providers. Current satellite communications systems, such as Iridium, Inmarsat, and Thuraya, were built decades ago and cost hundreds of millions of dollars to design, develop, and put in orbit. The startup cost for these slightly spotty satellite communications services results in a steep sticker price for the end customer (especially relative to terrestrial cell plans) with typical call rates ranging from $1.00 to $6.00 per minute4 and data rates at about $1M/GB.5 Ultimately, the price point limits the size of their market, creating a certain irony to the advertised service of “global” communications.

Current terrestrial based systems are just as unsatisfactory. Although more reliable than their space-based counterparts, terrestrial networks only cover about 10% of the planet. The majority of the population lives in the area serviced by the ground-based communications services, but about 700 million people remain without coverage.6 Furthermore, there are a multitude of organizations in a variety of industry verticals that operate assets in the remote corners of the planet. The shipping industry operates almost solely in the open ocean where there is much need for new forms of consistently reliable communications.

90% of the world population lives in the 10% of the world geography that enjoys good communications services.7 As a result, this 90% of the global population expects good connectivity everywhere, but there is not. There is an emerging need for global communications, especially in the developing world. High altitude balloons promise a platform to deliver low-cost communications to remote and unconnected parts of the world because they operate at a high altitude and provide more expansive coverage than terrestrial networks, but cost significantly less to deploy in comparison to geo-synchronous or even low-earth orbiting satellite platforms. The result can help to enable communications services at an inexpensive price point that can impact the large majority of the commercial marketplace.

Natural disasters typically cause an outage of terrestrial communications systems, thus making it difficult to evaluate damage and coordinate rescue attempts. Satellite communications can be helpful in some

90% of the world population lives in

10%of the world geography


circumstances, but even this expensive solution is hindered by the fact that most communication devices can’t to close the link at such a distance. Affected and downed terrestrial cell towers can often take weeks to rebuild and bring back online. A single station-keeping balloon could be deployed in less than a few hours to fill such a void and provide communications services to large swaths of effected areas and at an altitude capable of handling signal propagation loss through rubble, and debris.

As the developing markets become more connected to the rest of the world through the Internet and other broadband communication protocols, high data rate connectivity becomes a more integral component to driving market modernization. While the developing and emerging countries have seen smartphone ownership nearly doubled from 21% in 2013 to 37% in 2015,8 there is insufficient terrestrial infrastructure available to support their use and continued growth. Space-based communications coverage is available, but not enough to close the business case for most potential customers. A single balloon, however, could provide cellular phone service and/or internet connectivity for an entire region of a country.

Narrowband communications systems are employed by industries in the energy, agriculture, mining, and transportation industry verticals. There are a multitude of high-value commercial assets, such as pipelines, power plants, gridlines,

farms, water treatment facilities, surface mines, trucks, planes, and ships that operate in remote locations without strong connectivity outside of their narrowband communication systems. From an operational standpoint, the lack of connectivity for and observation of these assets presents an issue that can lead to delayed responses to critical problems. Gas leaks, power outages, crop infestation, mining anomalies, or transportation issues plague commercial industries on a daily basis leading to inefficiencies in business operations and increased costs. High altitude balloons offer a unique solution to these issues and can leverage station-keeping to easily service static assets such as power plants, farms, and mines. Additionally, mobile asset courses are generally known; meaning, station-keeping balloons can service specific routes.

Smart phone ownership in developing countries

21% in 2013

37% in 2015


Earth ObservationThe Earth Observation industry is currently valued at $2B and is exhibiting strong growth, projected to surpass $5B by the year 2026 at a 9.5% CAGR.9,10 This projection results from the fact that data from Earth observation instruments is starting to drive actionable strategic intelligence for businesses in various industry verticals. There are a host of different payloads that can be used to scan the surface of the Earth and identify important data signatures—hyperspectral, visible, infrared, and synthetic aperture radar (SAR) to name a few. Each of these data types provide their own unique insight because each uses a unique frequency and method for observing the Earth. For example, hyperspectral instruments can conduct spectral fingerprinting and material identification, mid-wave infrared can identify temperature relativity and water content measurements. Visible imagery comes in the form of raw picture files, and SAR data provides surface texture and backscatter properties of scanned objects. The applications for these data sets span a host of industry verticals as broad as the communications use-cases: energy, agriculture, mining, weather, and transportation.

Current Earth observation solutions exist on satellite platforms, planes, and drones. While satellite platforms are most expensive, they usually provide the best and most geographically expansive data sets. Drones are least expensive, but their pointing instability and low altitude results in sometimes poor data covering only small areas. Planes serve as a compromise

between the two. Drones and planes are unique to satellites in that their payloads can be swapped out, upgraded, and/or repaired, which provides an element of flexibility in how they collect data.

High altitude balloons present an attractive new alternative with numerous advantages. Balloons operate for a long time at a high altitude, and they can attain large geographic swaths of coverage, akin to satellites. Furthermore, station-keeping balloons can choose to loiter over the same spot, surpassing the exposure time and resolution for their Earth observation payloads beyond the capability of satellites. Finally, balloons can be controllably landed, ensuring payload recovery and the ability to upgrade or swap hardware when the need arises.

The commercial benefits of Earth observation data are really derived from the value-added resellers of raw Earth observation data. Algorithms can be utilized to draw strategic intelligence from an aggregated data set of various types of Earth observation data and directly applied to business operations to minimize cost and risk to high value assets. Earth observation data can be used to identify gas leaks, evaluate vegetation stress, generate soil moisture indexes, capture temperature anomalies, estimate crop yield, and calculate container storage levels for the Energy and Agriculture industries. This data can also be used to monitor and track planes, cars, trucks, and ships for the transportation industry. And such data can be used to capture atmospheric data for weather forecasting.


GLOBAL MARKET IMPACTHigh altitude balloon platforms are well positioned to disrupt the traditional models and thinking behind obtaining and providing critical services and data for numerous commercial industry verticals. In competition with satellites, planes, drones, and terrestrial infrastructure, balloons boast a lower price point and a capability that is competitive with even the most sophisticated of satellites. Although balloons are not likely to entirely replace any of these platforms individually, they will certainly find a comfortable niche in the market in the coming years as commercial industry realizes the value to cost ratio of their services.

With the dawn of the space tourism industry, high-altitude balloons promise the most affordable ticket to a front row seat of the view of the cosmos. And as a low-cost enabler of global communications and earth observation, high altitude balloon platforms are sure to play a critical role in the acquiring of data that will drive strategic and actionable intelligence for enterprises and organizations the world over.

For more information, please contact:

John Schmidt Global Managing Director, Aerospace and Defense [email protected]

Travis Fulton Management Consultant, Aerospace and Defense [email protected]

Key Contributors from Accenture Research:

Kevin FohrerTravis FultonStephen KingeryTyghe Speidel

NOTES:1 Jane Poynter, Chief Executive Officer at World View Enterprises. Personal interview. July 20162 NY Times, Parachutist’s Record Fall: Over 25 Miles in 15 Minutes, J. Markoff Oct. 24, 20143 http://www.abeautiful.world/stories/the-overview-effect/4 http://www.satphonestore.com/airtime/iridium-airtime.html5 http://www.satphonestore.com/airtime/iridium-sbd.html6 https://www.sciencedaily.com/releases/2008/12/081217192745.htm7 https://www.ericsson.com/res/docs/2015/ericsson-mobility-report-june-2015.pdf8 http://www.pewglobal.org/2016/02/22/smartphone-ownership-and-internet-usage-continues-to-climb-in-emerging-economies/9 NSR Satellite-Based Earth Observation (EO), 7th edition10Accenture Market Analysis

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Up, Up, And Away | Accenture...3 | Up, Up, & Away: Harnessing Opportunity in the Stratosphere Disruptive Innovation World View is the first business to commercially offer an affordable,