The Big Money Continues to Bet on Drones

News and Commentary.  Today’s announcement that telecommunications company Verizon has purchased commercial drone platform Skyward gives further evidence that large companies are continuing to invest in the industry, hoping to cement their stake in the vast potential of drones and the IoT (Internet of Things) market.

Skyward is 4 year old Oregon-based startup providing commercial drone operations fleet management and workflow support – from flight planning to customer reporting.  It’s a new tool for a new industry, and while the company has done exceptionally well since inception it can only expect to expand dramatically as the use of commercial drones becomes more prevalent across major industries: making it an attractive prospect for purchase.

Industry expert and noted drone analyst Colin Snow of Skylogic Research says the acquisition of Skyward offers both practical and strategic benefits to Verizon.  “It will be interesting to see what becomes of this,” says Snow.  “Verizon has two very different vested interest drones: on the one hand they own and maintain a large infrastructure to support their mobile network and they are in the process of determining how inspection drones can support that. On the other hand, they sell services plans for machine-to-machine IoT data and telemetry as part of their Airborne LTE Operations initiative.”

“The first is a good fit for use of the Skyward software because the platform connects people, processes, and equipment involved in drone operations (like inspections) into a common workflow,” Snow comments.  “The second is visionary –  because we are long way off from seeing widespread adoption for in-flight wireless connectivity.”

While the industry may indeed be a long way off from in-flight connectivity, it’s this vision that seems to be the largest driver for Verizon and other Fortune 500 Companies investing in the drone space.  The potential for Verizon’s communications network in the drone industry is too important for the company to miss, and they know it.  Drones are one of the biggest illustrations of the demand for connections in the I0T space; and while the announcement of the acquisition talks about Skyward’s drone operations product, it also gives a hint about their future development plans.  “…Verizon will streamline the management of drone operations through one platform designed to handle end-to-end activities such as mission planning… and provisioning rate plans for drones on Verizon’s network,” says the press release.  “All of this is designed to help developers and businesses create and manage a wide-range of services backed by Verizon’s mobile private network, secure cloud interconnect and data analytics capabilities.”

Verizon  is clear that it’s investment in drone technology is part of a larger strategy to drive the IoT market forward.  “Through investments and strategic business and industry partnerships, Verizon continues to drive innovation… The acquisition of Skyward speaks to Verizon’s strategy to operate in innovative, high growth markets leveraging core assets to help accelerate IoT adoption. In 2016, revenue from Verizon’s internet of things business approached $1 billion.”

The announcement of Verizon’s investment is only the most recent example of Fortune 500 companies acquiring stakes in the drone industry.  Computing giant Intel‘s investment in drone technology is a prime example – and goes far beyond the light show demonstrated at the Super Bowl.  With large investments in consumer drone manufacturer Yuneec and a long list of other drone related companies, Intel’s focus on drones is unmistakable.  Intel is rushing to get it’s developer drone package into the hands of new companies  – and its processors established as an industry standard.  The company is so committed to the drone industry that its CEO, Brian Krzanich, was named as the head of the FAA’s newly formed DAC (Drone Advisory Committee.)

IBM has made a deal with industrial drone provider Aerialtronics to provide the Watson IoT AI platform to Aerialtronic’s inspection drones.  Qualcomm – providing the Snapdragon developer drone – has partnered with AT&T to test the use of drones on cellular networks.  The Fortune 500 list abounds with companies making plays in an industry which offers vast potential for their products; they are supporting the industry with financial deals and the type of government influence that only a huge company can wield.  And while the steady stream of market reports and articles about the estimated dollar potential for drones in one aspect or another veers wildly from day to day and publication to publication; there is no argument about the direction of the industry.  It’s growing, and it’s growing fast: the best indication of that may be the continuing flood of investment from the corporate giants.