{"id":287265,"date":"2026-02-12T09:14:15","date_gmt":"2026-02-12T09:14:15","guid":{"rendered":"https:\/\/www.newsbeep.com\/il\/287265\/"},"modified":"2026-02-12T09:14:15","modified_gmt":"2026-02-12T09:14:15","slug":"how-much-is-vertical-integration-squeezing-the-smallsat-opportunity","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/il\/287265\/","title":{"rendered":"How much is vertical integration squeezing the smallsat opportunity?"},"content":{"rendered":"

TAMPA, Fla. \u2014 As SpaceX and other vertically integrated space giants expand their reach, questions are growing over just how much room other small satellite companies have to build scalable businesses.<\/p>\n

The number of satellites in orbit is projected to grow from 10,000 to anywhere between 100,000 and a million by 2035, Deloitte U.S. space practice lead Brett Loubert said Feb. 10 during SmallSat Symposium in Mountain View, California.<\/p>\n

That growth trajectory has recently been accelerated by interest in space-based data centers<\/a> and orbital computing concepts, which proponents say could help meet surging global data demand.<\/p>\n

\u201cIt drives a ton of use cases,\u201d Loubert said, as the need for significantly greater data delivery and storage becomes sharper in an era of artificial intelligence and autonomy.<\/p>\n

Abhishek Tripathi, director of mission operations at the University of California\u2019s Space Sciences Lab, argued that the rise of orbital data centers means the industry should broaden the definition of a small satellite to encompass anything \u201cthat has a solar array that\u2019s smaller than a football field long.\u201d<\/p>\n

Excluding orbital data centers this way, Tripathi said, would help companies and investors focus on the business opportunities that remain below that threshold.<\/p>\n

\u201cEven as far as four years ago, I didn\u2019t think there was going to be as big of a market for small [satellites] the size of a couple of monitors,\u201d he added.<\/p>\n

Vertically integrated stranglehold<\/p>\n

However, satellites of all sizes slated for large constellations are increasingly being built, operated and \u2014 in SpaceX\u2019s case \u2014 launched in-house<\/a>.<\/p>\n

The shift toward megaconstellations and deeper vertical integration is already squeezing smaller and mid-sized satellite operators as Amazon follows SpaceX\u2019s lead, warned Armand Musey, a satellite industry analyst and founder of Summit Ridge Group.<\/p>\n

As dominant players internalize more of the value chain, it becomes harder for independent operators to compete on cost, scale or access to customers.<\/p>\n

\u201cI think it\u2019s going to be a tough time for some of the smaller [and] mid-sized operators,\u201d he said.<\/p>\n

According to Boston Consulting Group principal Charlotte Kiang, this does not necessarily mean smaller players are shut out entirely.<\/p>\n

\u201cI don\u2019t think necessarily all hope is lost if you\u2019re not the SpaceX of the market,\u201d Kiang said, adding that she expects companies will increasingly focus on standardized satellite platforms that support multiple missions and customers.<\/p>\n

Smaller players are also likely to continue consolidating to gain scale and \u201cconstellation-level economics,\u201d she added.<\/p>\n

Room for partnerships?<\/p>\n

Kiang also said orbital data centers could create partnership opportunities<\/a> for smaller companies that are not building the platforms themselves, particularly those positioned to provide connectivity layers, ground infrastructure or other enabling services that sit downstream of large space-based compute systems.<\/p>\n

Musey was more skeptical that the industry is heading toward deeper collaboration.<\/p>\n

\u201cI think we\u2019re seeing in the industry, the successful players are increasingly vertically integrated,\u201d he said, as they move toward proprietary technology and in-house capabilities.\u00a0\u00a0<\/p>\n

\u201cI\u2019m seeing maybe less cooperation than more,\u201d he added.<\/p>\n

Carving out a niche<\/p>\n

Still, as the industry pushes toward mass production and constellation-scale deployment, Tripathi said gaps are being opened for companies capable of delivering specialized spacecraft that large manufacturers increasingly deprioritize.<\/p>\n

\u201cWhen you do that, you lose the ability to service the one-offs,\u201d he said, \u201cand I think there\u2019s a tremendous opportunity \u2026 to be able to be a high-quality provider of \u2026 mission-specific satellites.\u201d<\/p>\n

The rapid push toward space-based computing could also revive interest in parts of the smallsat supply chain that have struggled to attract capital in recent years, he added, such as propulsion and other satellite components.<\/p>\n

It remains to be seen whether niche opportunities can translate into meaningful growth for the broader smallsat sector.<\/p>\n

\u201cIt\u2019s going to be a little business,\u201d Musey said. \u201cSome of these niches are just very small and are not really going to move the needle in terms of the growth of the overall satellite sector.\u201d<\/p>\n

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