Executive Interview with Jean-Marc Nasr, Spot Image’s CEO

By Joe Francica

Joe Francica recently had the opportunity to interview Spot Image's CEO, Jean-Marc Nasr.

Joe Francica (JF): Spot's history has always been in supplying high resolution imagery, especially in panchromatic bands. Given some of the announced increases in resolution from other satellite platform companies, will Spot feel the need to compete with them under its current business plan?

Jean-Marc Nasr (JMN): Resolution is not the critical factor when it comes to performance, value or potential business success.Far more important is the ability to provide access for decision makers to reliable information in a dependable time frame.This "service" component is as important as the image product. Right now, and in the future, timely access to information is the differentiating factor which makes Spot Image the leading company in the business sector.Right now, we are operating a constellation of three satellites and a widespread ground network which gives us very great coverage and response capabilities to meet the needs of customers around the world.

That being said, we will continue to increase resolution while maintaining the largest possible scene size, and we will still give the fastest response for users.The high resolution Pleiades constellation, coming soon, will gather top quality images at .5m resolution, comparable to any on the market today or in this decade, and we will provide unrivaled access to imagery and the information contained within.

JF: Spot Image has concentrated on addressing the need for satellite imagery by approaching a worldwide marketplace, unlike your U.S.-based competitors that have received much support through U.S. defense and intelligence contracts.Can you comment on the potential growth in the broader foreign markets for remotely sensed data and applications? What countries are showing the most growth potential?

JMN: Yes, Spot Image is definitely an "export" company, since more than 80% of its sales are made outside Europe.I can say that this strategy is a winning one since our sales almost doubled in the last three years.Asia has been our most active marketplace with a growth of 40% per year in the last three years.Many countries in Asia are investing in SPOT receiving stations.This is a significant trend, and an indicator of the strength of the industry as a whole. Within Asia, China represents 75% of our image data sales.I do not see any change in this growth in the next years.

China is really the commercial engine for our remote sensing industry today, for any company.The civilian government at all levels has embraced imagery as an operational technology for managing growth, resources, the environment, transportation and many other aspects of the country.They are exploiting imagery in both traditional and innovative new ways like no other country.The Chinese National Bureau of Surveying and Mapping just completed mapping the entire country with SPOT 10m imagery.We are providing coverage of many other very large areas as well, for a variety of projects.Our subsidiary in Beijing is a business portal for many companies, including some of the U.S. image providers and U.S.value-added companies.So, Spot Image is an exporter, but also a business leader who can help strengthen the industry on a global basis.

When you look around the industry, SPOT has been in operation longer than anyone, and is the only system that has had long term plans, which continue today.Our stability has helped draw investments and long term committed clients and partners around the world.

JF: You have Channel Partners and distributors worldwide. Under what guidelines do they service customers with respect to geographic trade areas or restrictions? Are they restricted to doing business only in their home country?

JMN: The Channel Partners (CPs) represent our best vector to develop the market. Some have market exclusivity, and some have geographic exclusivity.It really depends on the market situation in each region.In North America, we have market specific CPs in the United States, and a very strong regional CP, Iunctus Geomatics, for all markets across Canada.Other CPs like IntaSpace Turk or BSA in Mauritania are active in several countries.

Spot Image is a matchmaker for connecting businesses worldwide.Our Global Business Alliance of Channel Partners is really a network of shared capabilities and opportunities that spans the globe.We've helped connect agricultural information services from the U.S with clients and partners in Asia, Australia and South America.TerraEngine, a data management and access system from our Canadian partner is being reviewed and incorporated into proposals in the U.S., Asia, and elsewhere.U.S.value-added companies are connecting with our network around the world to provide products and processing capabilities.The imagery products, services and technologies that I see coming out of these worldwide synergies are the best available anywhere.Spot Image is a microcosm of the general trends in global business today, with many companies and clients benefiting from our Global Business Alliance.

JF: What expectations do customers have for product development and marketing? Will prices come down? Will better imagery resolution expand markets and encourage application adoption?

JMN: I think customers are pushing more and more to obtain an operational service from companies like Spot Image.New product development is important as it is paving our way for the future.But service is more critical today.For us, a successful service is a subtle mix of image quality, value added processing and end product formatting to make the decision making process as easy and fast as possible...and as always in time! Can it be delivered reliably, every time, when the client needs it? That is the key.Market expansion is based on this mix.

JF: Is there a limit to the return on investment you would expect by increasing image resolution, expanding coverage, and developing niche products for certain industries? How do you discuss ROI with your customers? Or is that not a concern among your clients?

JMN: I am a strong believer in the fact that we are in a governmental market which deals with major concerns such as defense, security, agriculture, and hazard prevention and monitoring.Those applications are so critical in our changing world that if we are able to provide the right service in the right time, the investment needed will be largely covered by the return.

Any agency which makes an investment in our technology should be concerned with ROI, whether it is in the classic financial sense, or in qualitative terms. There has to be recognizable value.That is true for the European shareholders of Spot Image, the U.S.Department of Defense, or any of the other governments such as Thailand, Malaysia, China, Brazil that are making those investments. You ask about specific products, but I am speaking on another level, which I think represents an important trend.We are increasing access to the real value of Earth observation technology as a whole - the satellites and ground systems - for government agencies and commercial partners.Many countries and commercial entities have recognized an ROI from buying imagery.Now they are moving up another level closer by investing in partnerships or receiving stations because the ROI is greater.

Many companies have learned very hard lessons about products and investments. Unfortunately, many are not with us today.The problem is that we are still on the learning curve.I think our industry has made enough mistakes on both sides of the Atlantic to be able to say that the bad days are over and we understand much better now where to invest in new products.There are some very nice examples out there.The ones I recognize immediately involve the creation of very large area databases that feed many users and applications.They can generate real market growth.The Japan BaseMap, the Western Canada image database, and our China-wide mapping project are a few examples.The U.S. company EarthSat also has their series of global Landsat databases that are good examples.All of these products reach hundreds of desktops worldwide with GIS, mapping and visualization applications.I think it all gets back to the question of access.If you can improve access to the value of our technology, you reach larger markets and better ROI.

JF: Are products such as SPOT THEMA developed in conjunction with schemas and definitions as defined by a local government or were these developed using proprietary algorithms for a broader market?

JMN: Those products are developed to meet certain customer's expectations.As such they contain specific features which might not apply to a broader community of customers.They are working well today and I think the best outcome is to be able to re-play this model for different users in the most cost effective manner.

JF: Spot Image sells a variety of remotely sensed image and photographic products.This was not always its business model.At what point did the company recognize that it needed to service a complete "stack" of image-based products and what industries are best served by this business plan?

JMN: This started to be obvious when the real operational users started to replace the scientists and researchers in the late 90's.It is impossible to meet the critical aspects of an operational service such as defense or disaster monitoring or precision farming with one kind of satellite.There is a cyclical synergy at play here.The more data sources that are available, the more options there are for clients, and the more demands they actually make for advanced products and services.This ultimately requires more data sources, and more technologies to extract and deliver value.There are very few single source solutions anymore.Most of our offices around the world sell every type of satellite image produced, including IKONOS, QuickBird, OrbView, radar, Landsat, EnviSat, RocSat.Our industry is not really about competition between data providers, it's about serving the users' needs with whatever is available.

One of the U.S.companies we work with sells what they call "doughnuts" - large areas of SPOT with a centerpiece, or hole, of high resolution imagery over specific features, whether it's an airport, or city or some infrastructure.One of our growing product applications is a raster/vector/DEM product, or "stack" as you called it.Our Reference3D product consists of a DEM, an orthoimage and a full metadata file to help the user.Products like Digital Globe's AgroWatch use a lot of SPOT imagery, but they can take almost any type of data and create a whole suite of agriculture information products for their clients. Successful applications and companies need that type of flexibility to call upon multiple sources.While our core business is SPOT imagery, we act as a global data broker so our customers and partners have easy access to multiple data sources.

JF: What is the market reacting to now? Intelligence and security applications or natural resources and land planning? Where is the money coming from now? And in the near term?


JMN: We are in a governmental market which represents more than 90% of our sales and I am not only speaking of Spot Image but also of my friends at Digital Globe, Orbimage, Space Imaging, ImageSat, IRS, RadarSat, or any other system.There is no significant "commercial private" market as we thought in the good old 80's, certainly not enough to sustain or support data providers.But I am very proud to serve the government markets that play a major role in securing and improving life on our planet.This market is dominated by defense and security, and will remain that way for the next five to 10 years.In certain areas of the world, civil government applications in land planning and resource management are also very strong.This is certainly the case in China.I also strongly believe that agriculture and related applications will play a more and more important role.Perhaps these promising applications might finance their own satellite in the future.

While governments clearly dominate the market pool, I don't want to sound like I am neglecting the private sector.We have good strong clients, and long standing relations within the energy companies, flight simulation companies, private agriculture, the media, forestry companies and some other non-government markets.These are some really interesting applications and important for our industry.However, they don't represent near the volume of government work that is needed to sustain an Earth observation system.

Published Sunday, January 2nd, 2005

Written by Joe Francica



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