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ST Engineering iDirect CEO Talks Cloud Potential With Microsoft Deal

By Mark Holmes | February 11, 2022

At the end of last year, ST Engineering iDirect announced a new collaboration with Microsoft. Through this partnership, ST Engineering iDirect will leverage the Azure software radio tools to enable its satcom solutions through the Azure cloud platform. This partnership is seen as key for the company as it looks into concepts of virtualization and cloudification for its satellite platform, and the benefits they can bring to customers.

Via Satellite spoke with ST Engineering iDirect CEO Kevin Steen about this partnership, and what is next for the company.

VIA SATELLITE: What is the significance of the recent deal with Microsoft? What added elements does this bring as you look to serve customers?

Steen: It is a major milestone in our strategic direction and delivering on our strategy. It will give us the ability to validate how we leverage the cloud, not only for our platform, but for our satellite operators and service provider customers and their end customers. It is going to bring new capabilities to the satellite industry. We expect that this collaboration effort will ultimately increase our flexibility and speed to innovation and ability to introduce a broader range of products, services, and solutions into the market. Utilizing newer capabilities and innovations from Microsoft Azure will provide a set of tools we can leverage for containerizing and virtualizing our future offerings which is in direct support of our current customers’ strategies and will allow our customers a faster time to market. Importantly, it is a validation that we don’t need to build all hardware ourselves. I am extremely proud of what we have accomplished, but we have a long way to go to realize the full potential of cloud-based satcom offerings.

VIA SATELLITE: How important will the cloud be to the satellite industry? Why/when did you decide you needed to partner with a major cloud player such as Microsoft?

Steen: The cloud itself and the capabilities that it brings is hyper-critical. If you think of how the terrestrial world is evolving, whether that’s wireline or wireless, I think it is a natural evolution for the satellite industry to do the same thing.

Cloud enablement allows a distributed architecture. It gives us access to greater security, and this is important given the fact that customers today have a heightened awareness of how secure their satcom network is. There are also technology developments that will come with cloud enablement that we will be able to leverage to create robust telco-grade infrastructure and capabilities. We will ride on the natural evolution of what is happening in the wireline and wireless industries and ecosystem technology providers and satellite customers will have an established comfort-level knowing these are proven robust technologies.

When you look at time to market, a cloud enabled infrastructure means that we can put all of our digital elements and a good portion of our baseband processing in the cloud. We will be able to spin up networks much quicker and much more cost-effectively than we could have in the past. There will no longer be a requirement to ship hardware to a gateway. Those old cap-ex models will go the way of the dinosaur. Instead, there will be the ability to take advantage of new economic models which are already available and prevalent in the terrestrial and telecoms world. This is essential for satellite to take its place as a mainstream connectivity technology and facilitate satellite adoption of a radio access network (RAN). It will be an incredible seismic shift.

So, in summary, it is about speed to market, scalability, flexibility, security and lower total cost of ownership.

What does this mean for customers and the services they will be able to access? This will be transformative. It will open up new markets and new capabilities. The satellite industry must follow suit and innovate and leverage these technologies, because if we don’t, someone else will.

VIA SATELLITE: What impact will this deal have on your ability to generate business?

Steen: Some of our partners have already announced cloud capabilities. This allows us to partner with them early and to diversify how we generate revenue. It will also make us more attractive to new entrants that are coming into the market, whether that’s new technology players, new constellations or telcos who didn’t previously think about how they could leverage satellite. The outside world will view satellite as a mainstream connectivity technology.

If you think of some of the telcos we serve today, many of them have niche satellite groups within themselves. Those satellite groups will continue to be fully integrated into those telcos, and we will have access to that footprint of sales representatives who are looking to build their business portfolio.

Would I say it will happen immediately in 2022? There are some revenue streams that we are looking to build on this year, yes. However, we are building for the future. It won’t explode our revenue in 2022, but it will absolutely prepare us for what’s to come and it will cement in our current customers’ mind that we are staying true to our innovation and leading cutting-edge mindset and philosophy. 

VIA SATELLITE: Are traditional business models from the satellite industry almost disappearing overnight? Have you been surprised by the pace of change?

Steen: Not really. Let’s think about what is happening out there. There’s a move to a service- based architecture and economic models that center around services or pay-as-you-consume. Those models have been evolving in the wireline and wireless worlds for quite some time. In the terrestrial world, things are moving away from a heavy CapEx model. The satellite industry is no different and the cloud is a major enabler in spawning this change. I am not surprised it is happening. I am just surprised at how long it has taken us to get there as an industry.

The changes won’t happen overnight, but they are in progress. Bits and pieces of this change will already become evident this year.  However, it is going to take time for this to be fully digested. That said, if you look at the companies that have entered the satellite space in the last two to three years, and which ones are employing different economic models, it is pretty eye opening.

VIA SATELLITE: You talk about the cloudification and virtualization of your satcom platform. What in essence does this mean for your customers? Why is this better for them? 

Steen: Virtualization is the first step for us, and our customer base is very familiar with the concept. Virtualization lowers costs and brings predictability, reliability and resilience. It allows you to put your digital processing and other elements in the cloud. The first two steps for us are to focus on proving that we can run our network management system (NMS) in the cloud and to virtualize our modem. The hub side technology will come next.

The virtualization of our modem not only enables our customers to deploy it faster as well as offering more flexibility and increased services, but it also extends the life of the modem. By working with standards bodies, these services will be digested in a consistent way so the cost of being a niche connectivity technology will no longer exist. This will allow our customers to design their networks in the most cost-effective way possible.   

VIA SATELLITE: How will the cloud influence your technology releases and roadmap in 2022 and beyond?

Steen: There will be validation of our technology in the Microsoft Azure interoperability lab marked by milestones related to the virtualization of the modem. As I mentioned earlier, we will validate the running of the network management system in the cloud in a distributed fashion. We are already incorporating parts of this capability now, as we go live with customers. We expect the Microsoft Azure partnership to increase our speed of innovation as we will leverage technologies that they are bringing to market.

You will see some of our next generation capabilities and technologies being rolled out by certain customers, in terms of scale, flexibility, processing power. Last year, we announced the MDM 5010, our fastest VSAT modem. You will see further enhancements around its software and capabilities. You will also see some of the next generation hub side technology, where we separate digital signal processing from our RF [radio frequency]. Our customers will find comfort in the knowledge that their investments today will enable the migration to the cloud. It’s going to be an exciting time in the satcom market.

 VIA SATELLITE: Would you look to partner with other cloud players as well?

Steen: We are engaged with several cloud service providers (CSP), and we are at different stages with each of them to ensure that our customers have the flexibility in terms of which cloud technology and capabilities they choose to adopt.

VIA SATELLITE: What do you expect to happen over the next 12 months as regards innovation in the ground arena? 

Steen: The adoption and roll out of standards with the groups such as DIFI and 3GPP are already opening the eyes of customers as to what is possible. It’s also opening the eyes of those who have not leveraged satellite to date in their global connectivity networks.

We’ll see new customers and new capabilities that enter the market. Some will dip their toe in the water. Some will make a big splash. As soon as we are able to demonstrate a truly virtualized modem and run a major system component in the cloud, that will be seismic. That will propel us forward as an industry.

I see more and more partnerships like this happening. It gives us a faster time to market and gives us access to customers we might not have had before, and it offers our customers an alternative way of going to market. We are already seeing it in the Earth observation sector. That will naturally extend into VSAT. I think it will be another exciting year in the satcoms industry as we continue our transformation.