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Drone Business Models, from Software to Services


When we take a step back and look at the current state of the commercial drone industry, one thing is clear: there are many ways to do business with drones. For drone startups or established companies that are introducing UAVs, one of the most critical decisions they make in the early stages is to establish what areas of business they will focus their attention on.

The purpose of this post is to breakdown the many ways that current UAV companies (in the sUAS market) are operating, from product- to service-based firms.  I’ve divided these different UAV business lines into 6 different tiers for ease of explanation.  Although I’ve lumped these companies into separate groups, it’s also common for firms to be operating under multiple tiers.  If you have the right personnel and resources, that can be an effective strategy in a highly competitive market to balance out your UAV business opportunities.

Six distinct tiers of UAV business, some of which are often combined to make up a UAV business plan.


Tier 1 – UAV Platforms

When we speak about different tiers of UAV business, those included within the first tier are firms that design, test and sell commercial UAVs to the public and private sector. There are a large number of drone businesses that fall under this category, growing by the week it seems.  See this page for my full commercial drone registry, which shows a long list of companies and the UAVs they are selling.  A few examples of these companies and their enterprise-level drones are:

CompanyHead officeUAVs

Aeryon LabsWaterloo, ON, CanadaSkyRanger, Scout
AltavianGainesville, FL, USANova F7200, Galaxy R8700
DJIShenzhen, ChinaInspire 1, Matrice 100, Matrice 600,
S900S1000, Agras MG-1
Precision HawkRaleigh, NC, USALancaster 5
SenseflyLausanne, SwitzerlandeBee, eBee SQ, eBee RTK, albris
SmartPlanesSkellefteå, SwedenFreya (SmartOne D), Odin

Since many of these companies are selling fully functional UAV packages, you will notice that many firms under this tier will equip their drones with cameras or other sensors. This proprietary approach to the payload allows the company to market new cameras and platform upgrades that tie existing customers to their brand.  The cameras that they offer are not compatible with any other UAV as a transferable solution, for example.

Tier 2 – UAV Payloads

Beyond the Tier 1 companies that focus on the fully integrated UAV solution, there are others that focus on manufacturing and selling cameras (and other sensors) that are designed to be mounted on a wide range of UAVs that you already own.  These firms range from long-established camera companies that are entering the commercial UAV market to new UAV startups that specialize in drone-sized sensors.  Some of the examples listed below cover a wide range of camera & sensor types: RGB, multispectral, hyperspectral, and LiDAR.  More recently, drone payloads in the sUAS market have expanded to include dispersion of liquids from a holding tank mounted to the UAV for agricultural applications. A mainstream example of this is the Agras MG-1 released by DJI, claiming improvements from manual spraying speed.

CompanyHead officeCamera / SensorType
BaySpecSan Jose, CA, USAOCI-UAV-1000, OCI-UAV-2000Hyperspectral
MicaSenseSeattle, WA, USARedEdge5 band multispectral
TetracamChatsworth, CA, USAADC Lite, Mini-MCAMultispectral
(Up to 12 bands
& user selectable)
Phase One IndustrialCopenhagen, DenmarkiXU / iXU-RS 1000High resolution RGB
ParrotParis, FranceSequoia4 band multispectral
RieglHorn, AustriaminiVUX-1UAV, VUX-1UAV, VQ-480-U,LiDAR
SenteraMinneapolis, MN, USASingle, Double 4K, Quad, EO/IR, Sentera Q RGB, multispectral, thermal, HD video
VelodyneMorgan Hill, CA, USAPuck (VLP16), Puck Lite,
Puck Hi-Res
HDL-32E
LiDAR
HSE UAVMorton, IL, USACrop sprayersAerial application

Tier 3 – UAV Flight Services 

If one of the primary goals of the UAV company is to go out and collect aerial data for their clients, they can be included in this third tier.  These “flight service” companies often employ drone pilots and field techs to capture photographs, video and other deliverables (e.g. LiDAR data) with their own insured and permitted UAVs.  This tier also includes UAV-enabled inspection services, commonly performed with a live feed of the drone’s camera. One of the most established spaces under the category of UAV flight services is film and media, with many movie and commercial production companies utilizing drones for shots that were previously restricted to a helicopter, or not possible at all.  Finally, another evolving type of UAV flight service that should be mentioned here is the delivery of books, medical supplies and other materials by drone.

One of the earliest offshoots of service-based drone work was the real estate market.  This type of drone work is low-hanging fruit in the UAV business, easily accessible to anyone with a decent drone and permit behind them.  For that reason, it can be crowded space to operate in. Beyond helping realtors or developers sell a property, there are much more technical applications in the UAV flight services area.  A few examples of companies that offer UAV services are listed below, along with the sectors they serve:

CompanyHead officeTarget markets
AgPixelJohnston, IA, USAPrecision agriculture
Australian UAVCromer, VIC, AustraliaMining, forestry, survey, construction
FlitelabHammonds Plains, NS, CanadaFilm and TV, industrial, real estate
KC Drone Company Kansas City, MO, USAConstruction, insurance, agriculture, TV
Strategic UAVCampbell River, BC, CanadaForestry, environmental, agricultural, incident response, wildfire
Revered CinemaVancouver, BC, CanadaFilm and TV with custom UAVs
X1 AeronauticsKelowna, BC, CanadaSurvey, mining, forestry, environment, O&G

Tier 4 – Flight Planning Software & UAV Management

A standard pillar of any UAV operation is the software required for flight planning, to enable control of the UAV from a laptop or mobile device. Without this core software component, options are very limited for the drone user, especially when conducting mapping missions.  With recreational users this component is not as important, but with commercial UAV operations the ground station and associated software is an integral part.  

To make sure you are efficiently collecting the data necessary on your commercial UAV flight missions, it’s important to carefully consider your flight planning software. Many turn-key drone solutions are packaged with proprietary software for flight planning, but as an alternative there are many affordable and even free, open source applications out there (e.g. Mission Planner).  If you are considering a custom built UAV, you may have some flexibility on your choice of flight planning software, which can be a good thing.  I’ve been in situations where I’ve worked with buggy, proprietary software on a unmanned aircraft system that was valued over $20,000, when free flight planning software had just as much functionality and got the job completed faster.  You don’t always get what you pay for here, so it’s useful to consider all options. 

I’ve also included “UAV Management” into this tier, which include firms such as Skyward who assist with enterprise UAV deployment including: flight logs, staffing, permitting, flight planning, scheduling and other big picture items that encompass a legitimate UAV operation.  On the flip side, UAV Management also includes anti-drone technology.  There are plenty of companies that are cashing in on keeping drones from flying in certain areas (e.g. Near critical infrastructure).

SoftwareCompanyHead officeSummary
DroneDeployDroneDeploySan Francisco, CA, USACloud based drone software for flying, mapping and analyzing.
e-Motion 2, 3 & XSenseflyCheseaux-sur-Lausanne, SwitzerlandExcellent flight planning software with many advanced options.
Mission PlannerN/A (ArduPilot Project)N/ABest free flight planning software out there. Part of the ArduPilot open source project.
Pix4DcapturePix4DLausanne, SwitzerlandFlight planning software for iOS or Android by Pix4D.
Skycatch CommanderSkycatchSan Francisco, CA, USAUse with your DJI drone to map and collect professional data.
SkysafeSkySafeSan Diego, CAAnti-drone technology
SkywardSkywardPortland, ORManage all of your UAV operations
UgCSSPH EngineeringRiga, LatviaGround station software that is compatible with many drone brands.

Tier 5  – Drone Data Processing & Photogrammetry

Following your successful UAV flight missions, one of the first priorities for a commercial drone user is to process the collected data.  When we are speaking about UAV mapping, the goal is often to stitch hundreds of individual photos together to create the end data product (e.g. Orthophoto mosaic). If the flight was for video capture, the processing of the data will include review, editing and possible stitching of a different form: bringing different media clips together.  

Emerging as a worldwide leader in drone photogrammery since 2011, Pix4D has taken a large share of the market since their inception by way of their Pix4D Mapper products (Discovery and Pro).  After testing out some other imagery processing packages, I stuck with Pix4D Mapper and continue to use it today for my day-to-day drone data processing.  Since I tend to process data from mapping missions more than other types of flights (such as straight video capture), this is software package that I use most frequently in our operations.  The ease of use, transparency of results, support available and advanced functions make it a solid pick.

In addition, there are many providers today that will process your drone data for you, with plenty of data services focused on photogrammetry products.  One example of this is Drone Mapper, listed below, that is a 3rd party cloud service where you upload your UAV data and receive a stitched orthophoto and other data outputs for a fee. I personally like having full control over my own data processing, but it is now becoming quite common to have a UAV manufacturer (or even a UAV camera manufacturer) offer a full suite of cloud processing solutions.

SoftwareCompanyHead officeSummary
Agisoft PhotoScanAgisoftSt. Petersburg, RussiaTop tier imagery processing software by Agisoft.
FarmLens AgribotixBoulder, CO, USACloud based processing and analytics for agricultural drones.
Drone MapperDrone MapperCedaredge, CO, USACloud imagery processing, GIS services.
EnsoMOSAIC FusionMosaicMillVantaa, FinlandImagery and point cloud processing.
Pix4D Mapper ProPix4DLausanne, SwitzerlandProcessing from a global leader in drone mapping software.

Tier 6 – Training and Enablement

Last but certainly not least, there is a large market being served today by companies that specialize in UAV training, and enabling individuals to operate UAVs commercially, including assistance with permits.  

Training can take many forms, from hands-on drone flight training, to classroom-based aviation ground school, to online courses ending with an exam.  When I went through “UAV Ground School” classroom training with Aerobotika here in BC, we covered a wide range of topics that were based on knowledge requirements released by Transport Canada.  These included navigation, meteorology, air law and procedures, radiotelephony, and other topics that are also common to the world of manned aviation.  With the current UAV regulatory framework in Canada, there are published knowledge requirements for UAV pilots – both for operating under an exemption and to get your SFOC approved. Anyone serious about commercial UAV work is required to have this training, hence the tendency for some companies to focus solely in this business niche. 

The following list outlines some examples of firms that offer UAV training in one form or another.  While some firms specialize in UAV training, it is common to see firms in this tier operate in other tiers as well

CompanyHead officeSummary
Aerobotika Aerial IntelligencePort Coquitlam, BC, CanadaAn established UAV training firm with pop-up classrooms across Canada.
Canadian Unmanned Inc.Medicine Hat, AB, CanadaThe president of this training firm is one of the founding members of CCUVS.
Drone Training AcademyPort Melbourne, VIC, AustraliaExperienced drone training including hands-on flight.
UAVAirFareham, UKUAV training courses, held throughout the United Kingdom.
Unmanned ExpertsDenver, CO, USABased in the US but active with training staff worldwide.

 

Mike Morellato is the lead author and founder of WorkingWithDrones.com.  He works with drones and their data at Strategic in Campbell River, BC (Canada). 

 

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Nicholas Gust
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Nicholas Gust

Great blog Mike! Keep it up.

Mike Morellato
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Thanks Nicholas! It’s good to get the site up… hope you’re doing well

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