A few thoughts on the state of the commercial drone industry

Written by John Blair, Event 38.

Someone asked me the other day for guidance on the Unmanned Aerial Systems (UAS) industry and what considerations he needed to take into account as he prepares a business plan for market entry. This was my response.

I think most us believe that our industry is at the “peak of expectations” stage. Not a day goes by that someone doesn’t come up with another idea. For example, just this morning I saw a drone that was being used to herd sheep 🙂 https://textually.org/drones/2015/03/033365.htm. The industry is definitely in the “Aw, gee whiz” stage. The response to “Can you do (fill in the blank)?” is almost always yes, but the question without an answer today is “So what? ”How much $$ will it make me?”

So the big question that still needs to be answered is: “What is the ROI? How much $$ can I save?, How does it improve my customer service?, etc. Unfortunately, most businesses have very little operating history and only a few data points to prove end user value. So the companies that are focused on applications with a quantifiable ROI will ultimately be the survivors. All five of the major market areas, (ie agriculture, surveying, construction, environmental conservation, and a long tail of others) hold promise of being $B opportunities. Pick any one and you can create a successful business.

For the short term however, expect to see many entrants into any business vertical you choose. That means there will be constant pressure from new product feature/function developments, “better, faster, cheaper” business models, and pricing pressures. Also, much like the bottoms-up innovation in the consumer PC & mobile computing world has driven business change, a similar move is taking place in the UAS industry. Despite regulatory bodies’ attempts to draw a line between consumer and business use, most of the new ideas today are coming from consumer apps and then being adapted to business use. This will require anyone wishing to compete to be very nimble.

It is also important to note that the large defense companies are also looking to move “down market” into our space. For now they remain at a distance but if regulatory burdens/requirements become more regimented, these companies, who are used to dealing with more regulation, could become a bigger factor. Things like BLOS, (beyond line of sight) operation, “sense and avoid navigation”, and national airspace integration requirements could all have significant impacts.

Moving Beyond Geek Stage

Next, we are close but not quite past the “geek stage” of usability. Airframe hardware is barely out of the starting gate. We have experienced entry of a tremendous number of multi-rotor (helicopter) companies and a fewer number of fixed wing entrants that are able to fly longer distances, carry higher payloads, and have improved safety and durability. But much more will be done. Prices will definitely come down and capabilities will improve. Mission planning and flight operations software is fairly good today but still needs improved user interfaces as we move to a less technical user community. Despite tremendous progress in developing safe autonomous flight capabilities, the simple fact remains that it’s not as easy to fly a plane as it is to drive a car.

We can expect significant growth in the sensor market as well. We are pretty good with optical sensors today but more will be done to miniaturize thermal, Lidar, radar, microwave, multispectral, spectrographic and other technologies so small UAS’ can fly them. That in turn will open many more end user applications. Key developments need to be made in reducing weight, power requirements, and range of operation.

Finally, the biggest developments will come from software applications. Today a single flight can generate 5-10 gigabytes of data and desktop and cloud tools to manage it are still few in number and expensive so they need to improve. But the most growth will certainly come from end-user applications. Coming up with solutions for optimal use of agricultural fertilizers, to mining and construction operations management, and a million other applications based on UAS data, will certainly drive future ROI.

Regulatory Issues

Regulations are certainly in flux around the world. Some early adopters like Canada, Australia, and France have created frameworks that seem to be working. The US and many other countries have done little to nothing to-date or have outright banned UAS use. There are several very important issues that will always be of concern, including: safety, privacy, and integration into the manned aircraft airspace which will drive future regulations.


The UAS industry will have a transformative impact on our lives. Having sensors in the sky that enable us to digitize the physical world will create unlimited business opportunities. We are barely out of the starting gates today but we can expect to see exponential growth in the coming months and years. In the near future we can expect to see commoditization of airframes, significant sensor developments, and most important, major advances in end user software applications. It is a very exciting time!

What do you think? Where are we headed? What obstacles are in front of us? Where are the opportunities? Your feedback is much appreciated! Either post to this blog or email me directly at Jblair@event38.com

About Event 38

Event 38 designs and manufactures drones, (unmanned aerial systems), specialized optical sensors, and a precision analytics data platform for small and medium sized businesses. Today we have customers in 49 countries using our products for agriculture, surveying, construction, environmental preservation, and other applications. For more information please contact us at Event38.com

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