Q & A: Adam Thorn and Andy Bowyer discuss the new era of satellite technology

Adam Thorn:

Hello everybody, my name is Adam Thorn and welcome to the Space Connect podcast. Now, on our website you will see us frequently report a lot of on a company called Kleos Space who are sometimes described in the mainstream media, not by us, as a spy satellite company. What they probably more accurately do is use their satellite clusters in low earth orbit to geo locate our reaffirmations from passing ships that might be trying to hide from other conventional tracking services. The company has now grown so it's got a constellation of 12 satellites and it's preparing to launch a fourth cluster in the coming months. They are ASX listed. Joining us today is their co-founder, Andy Bowyer. Andy, welcome to the show.

Andy Bowyer:

Thanks for having me, Adam. 

Adam Thorn:

No problem at all. Now, again in that intro and I could almost hear you snickering a bit, being referred to as a spy satellite company, which maybe sounds more exciting than it is, I don't know. But talk us through what you do and how it works.

Andy Bowyer:

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Well you're right because we work in the earth observation domain and that means literally we're flying around the earth and we're observing the earth. In our case we're observing the radio spectrum, so we're looking to see where the radio spectrum is being used, in particular how communication devices are using the radio spectrum. That gives us an insight as to human activity, because that's really what we're looking for, we're looking for signs of where are the humans where you're not expecting to see them? 

                So to that intensive purposes we are providing a reconnaissance service or a surveillance service and that is a spy service, it's not a wrong description. I think spying sometimes implies listening in on what people are saying and that sort of thing and we're not doing that and we're not capable of doing that. What we are doing is looking to where people are speaking, how are they communicating, where are they? It's a fascinating place to work.

                It's not just maritime as well, so yes we can look at where communication to us is being used in the maritime environment, and that's really important because it's very hard to police and monitor the oceans and the wet pits of the earth because they're so vast, so what we can do is really provide some insights there.

                But we do that alongside lots of other earth observation data sets such as imagery and all those other things, so it's a big data fusion exercise, it's a really exciting place to work. 

Adam Thorn:

Now, I understand you won't be able to go into too much detail as there's always a lot of confidentiality, but the way I described it was that you kind of targeted radio frequency, geo location data. Talk me through a little bit more about the specifics of how that works.

Andy Bowyer:

Sure, I think that the best way of putting it, it's a little bit crude, but the best way of putting it is, it's like a reverse GPS system. So everybody's got GPS devices, whether it's their phone or their car, they're connected to GPS satellites in space. So you'll have a receiver in your car and in your phone that receives multiple transmissions from usually to three to five to six different GPS satellites. The more transmissions it receives, the better it can calculate its position in relationship to those other satellites.

                Imagine if you were doing that the other way around and instead of a receiver on your car you had a transmitter. In order to work out where that transmitter was you'd have to receive those same transmission at multiple places, three or four places, in our case three or four satellites. Because we receive that transmission at those multiple points we can calculate your position pretty accurately down to a few hundred metres with just a hand held walkie talkie for instance. So it is using that same maths but we're doing it the opposite way around to find things that don't want to be found rather than GPS where you're finding your location because you want to know where you are. 

Adam Thorn:

So some of the uses that you guys have been involved in I know are things like people smuggling and illegal fishing, but also things like search and rescue. Talk me through some of those uses and how it can work.

Andy Bowyer:

As I said at the beginning, it's really about looking for human activity, particularly where you're not expecting it to be. So whether it's by your boarders, coastlines and what have you, that can give an indication of smuggling, whether it's people movement, ship to shore movement where people are bringing goods onto a coastline that you're not able to police because it's too vast. Or quite often in the maritime environment ships go dark so they stop transmitting what's called AIS and they move together and they move goods between each other, illegally, nobody knows what they're doing, and then they go back to the ports and do other things. So we're able to detect the presence of that transshipping because we can see the communication that coordinates the effort. 

                The other thing from a land perspective, so if you're looking for human activity, let's say in the Amazon, in the jungle, where you can't see through the jungle canopy, so cameras can't look down to the jungle canopy and see human activity. But radio activity passes through the jungle canopy and if we're able to locate the presence of human activity, whether it's perhaps near a mine that shouldn't exist, it's something that helps find those illegal mines, helps find drug smugglers, helps find people movers, things like that. Anything where two parties are trying to coordinate an activity be it illegal mining, fishing, drug smuggling, whatever it is.

Adam Thorn:

How revolutionary is this tech? I mean are you doing something that has never been done before, or never been done by somebody else, or are you just doing it better? What differentiates yourself from any competitors, if there are any really?

Andy Bowyer:

The technology is really new, but the physics isn't. The physics has been around for a long time, it's called multilateration, it's something that air fields have done for a long time to locate planes coming in, they use this maths, they use this physics. Multilateration is a set of physics that's been around 50, 60, 70 years in terms of people understanding and knowing how it works. 

                People have often talked about doing this from space, how you can collect radio transmissions and do this. But I think a lot of the industry has caught up with that in terms of the technology for small satellites have become more capable, more affordable. Launches have come down in price so you're now able to actually get satellites into orbit and that technology that we can fly is much more capable than it was five to 10 years ago. 

                So if you like, the technology has caught up with the physics, and then it was a matter of us developing all of the sub systems and all of the ground infrastructure that's required to own and operate satellites and deliver a capability over those. 

                I think people underestimate how much infrastructure is required for a space company, it is not simply buy some satellites and throwing them up into the sky and hoping you get something. There's an incredible amount of infrastructure with operations and insurance and management and flying the satellites, the ground segment, it's a massive amount of infrastructure that needs to be developed in grown alongside obviously the satellites, which are sort of the important bit, but they're really only the tip of the iceberg with regard the development that's required. 

Adam Thorn:

Well I'm going to pick you up on that in a little bit, but for now we're going to go for a break and when we come back we're going to talk a little bit about the history of how Kleos got going, we'll be back in a minute.

                Okay, welcome back. So before we went to the break there Andy, and you seem like a quite straight talking person, but what you've done is incredible, how do you go from having an idea to building a company like this? Like you said, the infrastructure, the investment you need to get going, how does that happen?

Andy Bowyer:

Well in our case it happened over a lot of years. So we had a space engineering company in the UK that about 10 years ago was starting working on the algorithms and the physics and the lab based testing, the stuff that's the basic technology development, the R and D side of things, and it was really more R than D even in those days, it was really the experimental phase on the ground. That is slow and long and expensive and then the more you go down the road of ultimately wanting to own and operate satellites and starting to build that infrastructure, the amount of money that needs to be spent is quite incredible.

                But it's not just about financial resources, it's actually about the human resource as well. Quite often in our sector the requirement for human resource that's incredibly specialised makes it very difficult to get into. We have very, very specialised signal processing engineers, RF engineers, satellite design engineers, systems engineers, product managers, production managers that are all at the top of their game and they are like finding hen's teeth, it's a really, really difficult thing to do to build that team as well as building the infrastructure and the technology behind it. So it's a very, very specialised art that ultimately takes a long time. It's a slow business that you have to be patient around for sure. 

Adam Thorn:

Now, I know that a lot of your recent launches, it might be all of them, were done by SpaceX and it's interesting because everyone, even more mainstream listeners, will know SpaceX brought the cost of launches down, they made space more accessible. Are you an example then of a company that perhaps wouldn't have existed unless access to space had improved, because it feels like Kleos is a company that 20 years ago would never have been possible if that makes sense.

Andy Bowyer:

Exactly right, you're exactly right. And it's not so much about whether the technology existed, it's more about the business case. In order to get the business case to close in terms of having enough customers that are going to buy the output, in order for you to bring the investment in to buy the satellites and all the work that has to go on that I explained earlier, in order for that business case to close, i.e for a business to exist and make money and make profit over a period of time, it required the costs of the industry to come down, the launch costs, the satellite costs et cetera, in order to help develop that business case and enable us to be able to ultimately close the business case and show that we can bring the investment in to the capability. 

Adam Thorn:

So who are your customers? Again, there's only so much you can talk about, but could you give us a brief overview of who it is that's using your services?

Andy Bowyer:

We broadly split the customer base into two, the government customer and the commercial customer. So by commercial customer we mean truly commercial applications. We often sell to commercial entities that are selling to a government customer, so really they're all part of the government pile for all intents and purposes. 

                The government, whether it's the defence, the security sector, which we predominantly work in, are very often in earth observation, the early adopter. They're the people that come in, support the companies while we're still developing our technology, we're still developing the techniques, we're improving it, it isn't a finished article, we're not in a Rolls Royce position where everything's perfect, we're in development and improving as we move forward. 

                So the government customer that is an intelligent customer, it's a sponsor if you like of those early stage deliveries, they're the main focus really of our push for now, and then we're starting to develop the more commercial applications. The applications which are more for the commercial maritime sector, or the gas, for protecting their assets, things like that that we will open up over a period of time. But they tend to be the second adopters in our industry, so today we're focused on government, military, defence type customer base.

Adam Thorn:

How does it work in that you've got a range of customers and I'm sure they're all big, western nations. But how does it work in terms of the ethics and the confidentiality, because what you're doing will be confidential information for those companies, for those governments. How do you keep things separate, and what kind of constraints are put on you in order to do that?

Andy Bowyer:

Well, it's not as constrained as you'd imagine actually. Our data products, we've been very careful about how we've designed it to be purely a geospatial data product. We're providing points on a map, that's what geospatial means. So we are enabling somebody to bring up a map where our data can be ingested into that map and it shows up as points with some metadata around it in terms of the type of frequency, when we saw it and all those sort of nice things. But it's geo spacial data, it's not data that is providing confidential information about the user or whatever else it is, it's an observation about what's going on.

                In the same way a photo taken from space is an observation of the cars on the road, or the amount of planes on an airport or whatever the observation might be. We're able to provide those observations quite openly.

                So what we do is we tend to particularity focus on areas of the world, so we have to pick where we use our capacity. Our satellites have got a certain amount of capacity, you can't fly around the world collecting the entire globe every day, it doesn't work like that. Satellites have got a duty cycle, they've got an amount of data they can collect, because we also have to download that data which takes a long time, so we have to pick where we're going to turn them on and where we're going to turn them off. 

                So we have to do that both on a commercial basis because we need to be able to sell that same data set to multiple parties in order for the business case to close. Or as we've recently done, we've launched a new product in which we've got missions as a service, which is more of a dedicated capacity where we say, okay you want your area covered, that's 50% of our satellite capacity, this is the cost of that. It changed the business case, it changed the way we were selling that data set, or selling that capacity was really a change of business plan for us there.

Adam Thorn:

We're going to pop for one more break and when we come back we're going to talk a little bit more about how Kleos is a sign of changing times in the industry, we'll be back in a minute.

                Okay, welcome back. So the next thing I was going to ask you is one of the things that makes your company so fascinating is that arguably what you were doing was again a decade ago, have been the preserve purely of big governments and that a relatively small, or a smallish company can do something like this and be selling it to these huge clients. That feels like a huge change in the way we defend countries and we run these operations. Is that something you'd agree with, because it seems to me quite incredible that say the US government will go to you for something this important and that that maybe something that wouldn't have happened, as I say, a decade ago.

Andy Bowyer:

I completely agree with you. I think the way that the government customers are thinking about commercial data sets has changed, it's evolved, it's got much more nuanced, the way that they're willing to work with commercial data sets. But I think it's an important caveat to make here that we are not replicating or replacing the need for government, what they would call exquisite assets, so the billion dollar satellites, the billion dollar capabilities, those abilities that are out of this world with regard to what they can do. 

                We're not replacing that, we're not here to replicate or stop them owning and operating those satellites. What we're here to do is compliment them and to be able to be fitting into the value chain with regard the intelligence collection suite so that they can say okay well, we can get commercial data and that fills in the gaps with our exquisite data, so they get more data, they get more capability and capacity that is very, very complimentary. 

                So we design the constellation, we design our capabilities to be complimentary to those government assets rather than, if you like, be in competition with them. I think that's an important differentiation to make and it's taken a while, for obvious reasons, for government customers to see that, how that works and how they can be complimentary. 

                I'll give you an example, for instance if you have a government satellite asset, very, very, expensive, it's got a certain capacity, it can take images of certain places and ultimately then it has a duty cycle and normal things that satellites have. 

                ut if we were able to collect data, find areas of interest that they should further investigate, which is something called tipping and cueing. So we tip or cue one of their very expensive assets to be used more efficiently than it was before. We're not replacing the need for that asset, but we're making it more efficient and think that's a really important, and that's not necessarily just satellites, but we could tip and cue maritime patrol aircraft which are incredibly expensive to run and rather than cycling up and down the coastline looking, hoping to come across something, we're able to task them, make them more efficient. It saves the government money actually in the long run with regard to how they use those exquisite assets, so I think that's how it's becoming a symbiotic relationship in that sense.

Adam Thorn:

Now, the next question is a little bit tricky and I might be going down the wrong rabbit hole here. But when you talk about the things that say you're detecting, like people smuggling or illegal fishing or using it for search and rescue for instance. You're able to detect things others aren't, but is there counter tech? Is there things that could be done to stop your satellites being able to work or to intercept them at all? Is that possible? Is that something you guys look at?

Andy Bowyer:

Yeah, it's certainly, ultimately as with all intelligence sources, as you collect more intelligence about the bad guys, they find ways to circumvent that, that's the natural cycle of the world.

                I think the difference with what we're doing as to why that doesn't quite fit is that because we're looking at passive radiation from the transmissions, it's very difficult to spoof or hide those in that sense, I'm not saying it's impossible, but it's very, very difficult to spoof those. 

                For instance, they way that they say an illegal fishing vessel that's illegally fishing off the coast of say South America or wherever it might be, these are very, very large, very, very large illegal fishing vessels. They way they hide themselves from imagery is they will often use a blue tarpaulin over the top of the roof, they will actually literally camouflage themselves so the imagery satellites can't see them.

                But the radiation, the signals, are just coming off the ship, there's nothing they can do to stop those coming off because they need to emit those radiation, that transmission, for somebody else to listen and pick it up so that the other person on the other ship can hear them. It's very difficult for them to then hide that position.

                I think the other use case if you like, a little bit further down our road map is looking for people trying to evade being found. So people using say GPS jammers, so these are people that are not wanting to be seen, not wanting to be found by GPS based systems and we could locate the jammers rather than locating the system. That's a kind of useful case for, if you like, electronic intelligence or signals intelligence, however you want to term what we're doing. 

Adam Thorn:

Now, you're obviously gathering lots of quite confidential information, how does it work in terms of your cyber security? What do you do to protect yourself from perhaps hackers or people that want to get to your information?

Andy Bowyer:

Well, we take a very, obviously, a very conservative approach. We apply our best in class, for commercial terms, best in class encryption techniques and security techniques. We have secure servers, we keep everything separated so if you like our server that has our email on has no access to the server that's got our data on. They are literally not even fire walled, they are not even in the same building, they're completely separate so you can't get, if you get hacked from an email perspective, you can't get into the data and get hacked from that perspective. So we keep our systems very siloed and so that gives us some security in that sense with regard of people being able to access data or access the satellites and what have you, it is very, very separate.

                So we take the conservative approach by just physically separating things but obviously employ as much as we can the best in class commercial security measures that we can do. It's always a balancing act though, because ultimately if you were to take the ultimate path you wouldn't allow anybody to access emails or have laptops or whatever else, you have to allow for business to continue within the realm of normal life, but you also have to take as many precautions as you possibly can. 

Adam Thorn:

Now, the last story we run on you guys was this deal with the US Navy where essentially you're going to be involved in research and development with them. Talk me through that, because again, that feels like an extraordinary leap, they're not just buying your service, they want your expertise to grow their own tech as well. How does all of that come about?

Andy Bowyer:

Well it's kind of a lot of business development, so that's taken our US government team a long time to get to this position of trust if you like with something like the US Navy. These things don't happen overnight. It is only still the first step within an overall programme with these guys. I think what we need to do is we develop those relationships, we develop trust with the customer. 

                It's going back to your question earlier in terms of the government have assets, why would they use commercial assets? You've got to build trust with them, you've got to show them we have a place in that market, we've got a skill set to deliver, we have technology to deliver and we can add value to their mission and help them on that mission, or help that mission to be more successful, and that's really our objective here is to be that customer friend and to build that trust and to ultimately gain commercial success out of that. 

Adam Thorn:

So finally what's the future? You've had this incredible growth, you're I know putting more satellites in the sky, but where do you guys go next?

Andy Bowyer:

We're going to continue growing. We see this market place as only expanding beyond even what we thought it was going to be. We've spent the last three or four years building a marketplace, building pipeline, building awareness, socialising the capability and we've got a pipeline out there that we can't even yet fulfil, we don't have enough capacity yet. We're only really scratching the sides of it with regard fulfilling the capacity that the market actually wants. 

                So we've got to continue building, we've got to show technical leadership, we need to be able to show the industry how we can grow and evolve based on the customer need. We need to listen to those customers, we need to make sure we're adopting our business models, hence the addition of mission as a service as well as data as a service, which was more about delivering bespoke capability to the customer, which is not something we thought about when the business was first conceived. 

                So I think as we evolve we listen, we evolve our technology, we evolve our business model and we continue growing. Lots more satellites obviously in space, which is capacity, but that capacity doesn't need to just grow in volume, it needs to grow in complexity in terms of how we deliver a more sophisticated, complex and more accurate product into the customer's hands and take the customer along on that journey ultimately.

Adam Thorn:

You said that the company has grown a lot quicker than you would've thought. You almost, you've got so much in the pipeline you don't know what to do with it. How did that happen? Is it because we're in an uncertain world right now? Did COVID accelerate things? What do you think has caused such a demand? Because it feels that 10 years ago this was the sort of thing that was almost snickered at a little bit, but now there's been a begrudging realisation from major governments that actually space is a fundamental big part of your defence strategy.

Andy Bowyer:

I think there's quite a lot of different factors that have helped us along here. I mean partly there is a growing trend towards just more data and people wanting to have more data on everything that's going on around the world, everything that's happening. There's an understanding that the more data the more awareness they have with regard what's going on around the world, the more that they can assist with those problems or the more that they can be forewarned those problems are going to occur, which ever way around you're looking at it. 

                I think that once you show that utility of greater situational awareness, globally or around your own boarders or whatever it might be, there's evident use cases for that. So therefore evident as additional risks come along, whether it's global conflict or whether it's, as you say, COVID related risks with regard to people needing to be pushed to the edge a bit more and needing to do different things. Climate change will add to that as well with regard to security and increasing risk, with regard there, people movement is going to be massively impacted by climate change. So the more we can monitor that and understand where that movement is happening and how it can be managed and how we can help people, then obviously I think the trend for more and more data is only going to increase. 

Adam Thorn:

And I think on that perfect note time might just have beaten us. Andy, thank you so much for coming on the show. We'd love to have you back in a year's time because I imagine everything would've changed again.

Andy Bowyer:

We shall see, hopefully for the better.

Adam Thorn:

Well again, thank you very much for joining us. And thank you everybody for listening. We will be back the same time next week. But for now, for us on the show, good bye.