GeoEye has been making many moves since the landmark Enhanced View award. V1 editor Matt Ball spoke with Chris Tully, senior vice president of sales, recently about the company’s outlook and focus.
V1: To start, although it’s not recent news, the EnhancedView award with the National Geospatial-Intelligence Agency has to be the biggest event there, and has set a nice foundation for you going forward. What are some of the implications of that award?
Tully: First and foremost, it reinforces the commitment that the United States government has made to commercial satellite imagery providers. We were very fortunate to receive this award, which was awarded in August of 2010, and it is a 10-year agreement worth up to $3.8 billion dollars if it’s fully funded for the duration.
Of that, $2.8 billion is for satellite imagery, and it’s essentially a service-level agreement where we deliver high-resolution imagery to NGA according to a set of service-level metrics. There is $335 million in the form of a cost share that is helping GeoEye construct the next-generation satellite GeoEye-2, which will be ready for launch in early 2013, and should be in position to generate imagery for the government customer by the third quarter of 2013. It’s a satellite with more capacity than GeoEye-1, and it will have better ground resolution, and set the new standard for commercial satellite imagery. The remainder of the award is for web services, value added production services, some infrastructure development for the government, and other miscellaneous services.
For us as a company, the award gives us tremendous revenue visibility going out into the future, and enables us to continue to evolve our business to serve the government customer and provide additional capacity and new products for the commercial space.
V1: I know there have been a number of visible changes, including a number of high-level new job appointments, and you’ve also moved your headquarters office there in Virginia.
Tully: I can give you a rundown of some of our changes since the award. We brought in a new senior vice president of marketing in early December, adding Tony Frazier who joined us from Cisco’s emerging products group. We added a business development leader for the information services business with Dean Edmundson who came to us from Oracle where he’d been leading business development for one of their divisions for a number of years. We consolidated two offices in Virginia into a brand new space that got everybody into the same building, and that literally occurred just one month ago. That has given us some good productivity improvements.
During the planning and execution of the move, we demonstrated the ability to fly GeoEye-1 from two different operations centers. We transitioned our satellite operations to our Thornton, Colo. facility and flew it out of there. When our new facility was up and operating, we transitioned it back. We talk a lot about the need for redundant operations, and we demonstrated that we have that capability and can execute on it.
We’ve also announced a new web service platform called EyeQ that is a high-performance web dissemination system that enables users to rapidly bring premium content down to the desktop level. We also acquired a company called SPADAC, which is the leading geospatial predictive analysis company. We had a small investment and a presence on their board for some time, but we decided to bring them into the business. We acquired them in the middle of December, and they have been rebranded as ‘GeoEye Analytics’.
We are now a company that has the highest resolution commercial satellite imagery with the best accuracy, a robust value-added production services business with some unique multi-source capabilities, a growing information services platform that gets us some real improved user capabilities, and now the ability to include geospatial predictive analytics. We think we’re the only company out there that can make those claims.
V1: It’s an impressive focus on a large enterprise strategy that seems to be reflected in your appointments as well with new hires coming from the larger mainstream IT vendors. I was looking at your profile as well, and you’ve had a lot of experience with large enterprise computing applications.
Tully: I’ve been fortunate to work in both the large enterprise space and small to medium-size business space, which are very different. I don’t have a background in the satellite business, but some other experiences are relevant. It’s been a great year for me; I’ve learned a ton, and I’m excited about where we’re going as a company.
V1: The recent announcement of Esri’s partner-level agreement to extend the reach of your imagery archive to the majority of GIS users is significant. This seems to be on the other scale as a non-enterprise move to reach the desktop level.
Tully: They serve a lot of different customers, and I think the arrangement with them gives them good content to use in their online products. We have some strategic plans that we haven’t yet disclosed that will help us get into other markets that we don’t serve all that well.
We’ve had a great relationship with Esri for years. They helped us build various aspects of our operation here, and we think of them as a good partner, and I think you’ll see more coming from that partnership in the future.
V1: That web delivery piece was mentioned with your NGA award, with the new EyeQ online platform, and with the partnership with Esri. It seems that web delivery is central to a lot of your strategy.
Tully: One of the interesting things that we picked up as part of SPADAC acquisition were some product capabilities that are being integrated with our EyeQ platform. To a large degree, all these things help us provide better value to our customers.
If you are providing pixels to people, when you think about climbing up the value chain, everything that we do that aids that higher level decision making adds value to our offering. We’ll do everything we can to help our customers gain access to products and tools that support their business decision making or help them gain insight from situational analysis, and we’ll continue to invest in them.
V1: Does that commitment to decision support also relate to some of your targeted solutions that combine imagery and analysis such as with Marine Services. Are there plans to add more of those services?
Tully: I think that’s a good analogy. Our Marine Services is an information services business that is a combination of satellite imagery and other types of information that when consolidated together and presented in a timely fashion to a specific customer set, and for a certain purpose, has a real value in helping customers become more effective and efficient. The Marine Services information product targets the fishing industry in deploying their resources. We’re very interested to continue following that thought process to create higher value solutions for other types of companies.
V1: The commercial sector has always been an interesting element in the high-resolution satellite business, where there have been some wins, but it really hasn’t panned out to the extent that it was originally envisioned.
Tully: Our commercial business is growing at a nice rate, but if you take two steps back, 65% of our revenue is tied to the U.S. government customer. As we continue to expand that business, we’re certainly thinking to expand our commercial business. Our international business sells to friendly foreign government customers and commercial entities through regional affiliates and other partners. We also have a small North American business channel that sells mostly through resellers to key vertical markets. We’re continuing to enhance those relationships, and continuing to come up with products and services that are appealing to our partners.
V1: With all of the global change, in the environment and in the geopolitical space, it seems like a really good time to be in the monitoring of the world business.
Tully: A great example is the visibility that satellite imagery has gotten in the earthquake and tsunami in Japan, all the difficulties in Northern Africa, and then most recently with tornadoes and flooding in the central and southern part of the United States. A number of news organizations have gotten hold of this imagery and done some fairly creative things.
The New York Times was putting up interactive satellite imagery on its website with a slider bar of before-and-after imagery of Japan for before the earthquake hit and after, and they did that with the tornadoes in Alabama. I think that brought home to a lot of people the power imagery has to communicate change over time. There were 13 to 14 million hits on the New York Times website within the first couple of weekends that the Japan imagery was available. The New York Times is a pilot user of our EyeQ service, and that’s how they were able to get the imagery online so quickly.
I think there is a great deal of visibility on satellite imagery, and how instructive it can be to the general public and to customers with specific use cases.
V1: Do you think you’re well poised to take this growing awareness into greater commercial opportunities?
Tully: We are excited about the introduction of the EyeQ product, because it helps the company become more of an information service provider, leveraging the cloud as well as high-performance computing technologies and distributed processing to get content to the client as quickly as possible. The addition of GeoEye Analytics is extremely impactful, because it brings us a lot more customers that have needs that we will be able to help solve, as well as the analytical tools and processes that can help our existing customers. It’s a very exciting time to be here.