Harris Exec Expects Hosted Payload Opportunities to Emerge
Harris Government Communications Systems (Harris GCS) is positioning itself to be a key player in what promises to be an exciting hosted payload market in the United States over the next year. With the U.S. government putting in an infrastructure/architecture that will make it easier to do hosted payload deals in the future, Harris GCS could be one of the main beneficiaries. Janet Nickloy, Director National Strategy and Business Development, Harris GCS talks about the hosted payload landscape in the United States, the opportunities it brings for Harris.
VIA SATELLITE: All eyes are on the U.S. government and what they might do in terms of hosted payloads. Are you optimistic that they will fully embrace the concept? If they do, what will be the knock-on effect for the overall satellite industry?
Nickloy: The HoPS IDIQ contract is a very concrete and pro-active step on the behalf of the U.S. government to make hosted payloads a reality, as well as commonplace. I applaud the U.S. Air Force Space and Missile Systems Center (SMC) as well as General Pawlikowski and her leadership to put this pivotal contract in place. It allows the Hosted Payload Office (HPO) to have continual dialog with the commercial community. They can understand what resources are available and make knowledgeable decisions on how to leverage hosted payloads going forward. It really is a pivotal and monumental event for our industry to have that contract in place. The other key aspect is to start including hosted payloads in the architectural trade space. So, when the U.S. government is in the very early stages of discussing its mission and how to bring value to the end user through the most economical approach, they can consider hosted payloads as a potential option. That means it needs to be built-in as part of their process, so when hosted payload opportunities come available, they are ready to act.
VIA SATELLITE: However, talk of the U.S. government and hosted payloads has been going on for a number of years. Why do you think things are on the cusp of change?
Nickloy: Frankly, from the U.S. government standpoint, they are just now starting to include hosted payloads as part of their Analysis of Alternatives (AoA). That has to happen before we see hosted payloads for anything other than experiments. So, we applaud what we have seen with CHIRP. But, keep in mind, CHIRP was an experiment. They are getting mission data out of it, but it was not intended as an operational system. To really advance hosted payloads, you need a transition from singular experiments to being part of a foundation. I think we are still in the early stages of that process. The great thing is hosted payloads are being considered in the AOA. We are going in the right direction but it is still going to take some time.
VIA SATELLITE: How can Harris Government Communication Systems work with the U.S government going forward?
Nickloy: We are one of the executive sponsors of the Hosted Payload Alliance (HPA). We feel that it’s critical to have an open dialog and work with the U.S. government to address any real or perceived roadblocks. We are in continual dialog through the HPA and as an individual company. We have also invested in technology to accommodate the aggressive commercial timelines through a payload platform with high degrees of reconfigurability.
VIA SATELLITE: How do you view the revenue opportunity associated with Hosted Payload deals? Will Harris Government Communication Systems see a spike in revenues as a result?
Nickloy: With more than $1.4 billion in annual revenues associated with space-related programs,hosted payloads are just a part of that revenue base; it is clearly not our only strategy. We have ongoing business activities in ground and space, equipment and services, and commercial and government programs that are key parts of our portfolio. We feel hosted payloads are an added benefit and given our broad knowledge of the government community and their missions, it makes sense for Harris to be involved.
VIA SATELLITE: In 2013, we have seen a number of hosted payload deals: Harris/Iridium, Arabsat/EMC, AsiaSat/GeoMetWatch. Do you think we have reached a tipping point for Hosted Payload deals this year?
Nickloy: It is has been an exciting year so far and I think the momentum is only going to pick up. It is interesting to see an international flavor on the hosted payload deals we have seen to date. I think that will continue. I serve as the Chair of the HPA and we talk about this quite frequently. Hosted payloads just make sense. People are starting to grab onto that and coming with some very creative solutions that bring value to commercial and government customers. We will continue to see those trends.
VIA SATELLITE: Harris itself did a deal with Iridium. Can you explain the thinking behind this deal? What were the particular challenges behind it?
Nickloy: It was an interesting development over an 18-month time frame. Harris has a background in space payloads in addition to the FAA mission. So, by bringing together two key technology areas, the Air Traffic Control mission and space payloads, we were able to bring Iridium a much richer perspective of how to do the mission. But, it went beyond that. While the initial focus was on this specific mission that Iridium prioritized in their search for leveraging their hosted payload space, we wanted the flexibility to bring additional value using hosted payloads on the Iridium NEXT constellation. There was an attraction to work with Harris as we have a rich background in many government markets. We work with the DoD, Intelligence, NASA, FAA, etc., in addition to many commercial markets. Because of that, we had a pretty broad perspective on how we might bring value to other users, as well as Iridium itself. So our contract with Iridium allows Harris to leverage the additional space on the satellite for other purposes. In structuring the deal, we developed an agreement that enables Iridium to get monetary value through hosting fees and data services. These types of contracts are new ground, but we have a great relationship with Iridium and were able to work through the issues together.
VIA SATELLITE: What is the international opportunity for Harris here?
Nickloy: We have continual dialog across the international sphere. Most of the international players have some U.S. presence. I believe there is an opportunity for us internationally as well.
VIA SATELLITE: What do you expect to happen over the next 12 months in terms of hosted payloads in the United States? How will the landscape change?
Nickloy: In the next 12 months, I believe the HoPS IDIQ will be in place. I suspect NASA’s TEMPO mission will likely be awarded through SMC. There could also be a hosted payload addressing the space radiation environment. These are the things we know about today. My guess is we could see another two or three hosted payloads over the next 12 months in the government and the commercial markets.