The 3D Vertical Environment: Where Drones Really Become Valuable

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2Q 2018 | IN-5104

In ABI Research’s latest forecast covering the entirety of the small Unmanned Aerial System (sUAS) industry, there were some interesting trends. The most notable were located in the burgeoning commercial UAS market. In the news for quite a while, market-centric UAS solutions are coming to the fore, but some verticals are more promising than others. For the last few years, agriculture was held up as the key vertical, but this was to misunderstand the value of drones. Now, ABI Research finds increased focus on verticals like construction, commercial insurance, and energy, where the properties of drones come to the fore. This Executive Foresight will hope to explain these shifting trends.

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The Aerial Imaging Ecosystem


ABI Research’s study of the drone ecosystem found that across all markets, the value of the platform was only a fraction of the total revenue, with most coming from application services; these include data services (capture, analysis, storage, presentation, etc.), modeling services, operator services, licensing/permitting services, legal/liability services, and industry-specific applications. The primacy of data has led many entrants in the industry to become platform-agnostic. One company, Ceres Imaging, which specializes in providing aerial imaging solutions for agriculture, intended to use drones but shifted to hiring manned aircraft and satellite imagery. As platforms, they don’t suffer from an average drone’s short lifetime and enjoy a more accepting regulatory environment.

The largest entrant into the application services market is Airbus, which in 2017 set up Airbus Aerial, a platform-agnostic aerial imaging service provider that utilizes a combination of UAS and Airbus’ legacy satellite constellation to provide comprehensive aerial data across a range of market verticals. What this should stress is that the commercial drone industry has not blown open a new market, but is an adjunct to an existing one, and in certain cases, the unique properties of drones (excluding fixed-wing) allow them to achieve efficiencies that were impossible with manned aircraft and satellites.

The Unique Properties of Drones


If the central value of the commercial drone industry is aerial imagery, what are the properties that separate drones from satellites and manned aircraft?

  • Loitering: Multirotor, single-rotor, and hybrid VTOL drones have the ability to remain stable in the air, something not available to manned fixed-wing aircraft. Though manned helicopters have this advantage, they require a trained pilot, are less cost efficient, and have their movement limited by health and safety considerations.
  • Higher-Resolution Imagery:With their ability to remain stable in the air to get close to points of interest, drones can obtain higher-resolution imagery than alternative methods. This isn’t always particularly useful, but when analyzing specific information such as the status of legacy infrastructure, that higher degree of detail becomes vital.
  • Hard-to-Reach and Indoor Environments: When it comes to some verticals, areas of analysis can be hard to reach. In the case of bridge inspection, a drone can provide insights that would be impossible if relying on traditional aerial imaging platforms. Drones can also be operated indoors, opening up use cases in verticals like logistics (warehouse inspection) and oil and gas (facility and plumbing inspection).
  • Regular Updates:It would be unsustainable for most market verticals to hire manned aircraft services to provide daily updates on a site given the cost, and satellite imagery is insufficient in many cases to provide detailed insights. With drones, the only limiting factor is the flight time and subsequent downtime charging, meaning that worksites can be viewed and analyzed on a near real-time basis.

3D Vertical Environments


The advantages of the drone platform are not of great import in some markets (e.g., agriculture) and are critical in others. They are disparate but can be defined broadly as 3D vertical markets, where the drone is analyzing a vertical object in three dimensions, as opposed to horizontal 2D markets, like a basic vegetation index of a crop field. Here are some examples:

  • Construction Sites:Drones may be expected to gather information on both indoor and outdoor environments, and to detect subtle errors in construction builds that will save repair costs in the future. This is particularly useful in an industry famed for waste. Already, software companies like Project Atlas are utilizing the ability of drones to create 3D schematics of construction sites and place that information in a virtual geography that helps management and workers better understand their project. A major reason why construction has not so far been considered a major vertical for drones is that the decentralized nature of the market has slowed adoption. But with the global construction industry valued at US$10 trillion dollars, the total addressable market for drones is enormous. ABI Research forecasts that construction will be the single largest contributing market to commercial drone revenue, totaling more than US$7 billion by 2027. Among the chief pioneers in this vertical is Kespry, an all-in-one drone solution with its own unique platform.
  • Warehouses: Through the rise of e-commerce, there has been an accelerating growth in warehouse space across the United States and other large economies. Due to tight labor markets and the need for cheap floor space, warehouse managers struggle to accrue the employment necessary to grow their businesses. An alternative is to heavily automate warehouses with both unmanned ground vehicles and drones. Through creating navigation maps and marking reference points, drones can autonomously inspect and monitor changes in inventory. Drones are primarily deployed for stock-taking and tracking. Using their cameras, the platform captures information from the relevant logistics labels for stock-taking. Drones can also feature RFID tag readers to track flows of goods that may not be detected by a traditional barcode or tag reader system. ABI Research currently predicts this market to reach US$1 billion by 2027. Exyn Technologies is among a growing number of solution providers that target this use case.
  • Oil Rigs: Due to safety issues and the immense cost of offshore oil infrastructure, not to mention the need for continual monitoring, this market represents a lucrative opportunity for commercial drone providers. When it is necessary to inspect the external areas of the rig, particularly its underside, it is very costly because the site has to power down. With fire-retardant drones, this is unnecessary. Drones can also be used to inspect confined spaces like pipes, where human inspectors cannot go. This market is projected to reach nearly US$6 billion by 2027. Sky Futures is a major leader in providing drone solutions and expertise to this market.
  • Mines:For many cases, such as monitoring aggregates and stockpiles, 2D imaging is sufficient for mining, but for many other purposes, such as site surveying and blast planning, 3D imaging and the analysis it provides is vital. Drones can also be used to map the interior of mines.They can also survey places where it is too dangerous for human workers. ABI Research projects that commercial drone revenue from mining and related cases in geology will amount to US$3.5 billion by 2027. Airware, Exyn Technologies, and Kespry are all providing solutions in this space.

There are other verticals that stand to benefit from commercial drones, but these examples highlight that environments that include both indoor and outdoor spaces, are vertical, and need to be analyzed in three dimensions offer the biggest opportunity to commercial drone solution providers. It is these markets that onlookers should be first considering when thinking about the future size of the wider drone market.


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