SpaceX’s new Microsoft-Starlink alliance should worry Amazon

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Microsoft plans to deploy new modular data centers connected to the Web through Starlink, SpaceX’s new satellite Internet service.
Data centers are designed to open local connectivity and Microsoft Azure cloud storage and compute service almost anywhere on Earth.
Such data centers could bring video streaming services like YouTube, Netflix, and Hulu to new markets.
Amazon is pursuing a similar idea with AWS, which dominates about a third of global cloud business, and a Kuiper satellite internet fleet.
But none of Amazon’s spacecraft were launched, as SpaceX flew nearly 900 into orbit and launched a public beta, giving the company – and Microsoft – a big head start.
“Starlink was kind of like the missing piece for data centers or clouds to come close to the smallest populations around the world,” says one expert, although he did not cancel Amazon’s chance to come back.
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SpaceX and Microsoft have teamed up to grab a bite of Amazon’s cloud-based lunch, and the effort should benefit video streaming platforms.

In a recently announced deal, SpaceX will use its rapidly growing Starlink satellite internet network to connect Microsoft’s new, modular shipping container-sized data centers to the internet, regardless of where the global giant is. software is asked to drop them.

“Basically you have a [data] center, an ability, you put anywhere on Earth. You have to get that data somewhere else, ”said Gwynne Shotwell, president and chief operating officer of SpaceX, in a video released by Microsoft on October 20.“ You don’t need fiber. You are basically talking to the satellites that we have in orbit, the satellites will talk to each other and route that data to the other point on Earth where it is needed. “

Called Azure Space, the new division of Microsoft, a cloud computing company, aims to bring web services normally found in urban areas to rural, remote and disaster-stricken regions of the world. Azure could not only offer cloud and streaming services to whole new populations, but also reduce the business opportunities envisioned by Amazon and its own cloud computing subsidiary. (Amazon did not respond to a request for comment on this story.)

The partnership also comes at a critical time for SpaceX, said Shrihari Pandit, photonic engineer and CEO of Stealth Communications, which provides Internet access to New York businesses and researches new Internet infrastructure technologies. Since 2019, SpaceX has put into orbit nearly 900 Starlink satellites broadcasting over the internet. The aim is to provide broadband-type service to people in rural areas that traditional satellite companies cannot provide, and for less.

user terminal spacex starlink phased array ufo consumer satellite internet antenna on a stick roof bi website 00003 — A photo of SpaceX’s user terminal, or satellite dish, mounted on a roof. Company founder Elon Musk has called such devices “UFOs on a stick,” and they are designed to connect to the Internet through a fleet of orbiting Starlink satellites.

But Starlink is not cheap. Shotwell said in May 2018 that it could cost $ 10 billion to deploy around 12,000 satellites, and that was a year before the company applied to the FCC for permission to launch up to 42,000 in total.

“At the end of the day, it’s Azure that’s a flagship customer of Starlink. And for Starlink, it’s huge: it’s another major anchor, another vertical to touch,” Pandit said.

On the sidelines, businesses that depend on the proximity of data centers to customers to deliver smooth service, including YouTube, Netflix, Hulu, and other streaming video providers, could see a boost to their own bottom line. by reaching new markets and subscribers.

Low-flying internet satellites could provide a missing link to the modern web

Space satellite internet coverage animation signal cones starlink_slow. 2019 10 18 14_13_35 — An animation of SpaceX’s constellation of Starlink satellites providing internet coverage to the Americas.

In the modern cloud-based web, software increasingly lives in browser windows and internet-dependent applications, and videos are not played on local hard drives but played frame by frame. Making it work relies on two main elements: nearby data centers to handle demand and a high-speed connection to seamlessly connect users to those servers.

Microsoft solved the first issue with its mobile data centers, but needed a partner to help it connect those units: SpaceX. While Starlink is still in beta, coverage is increasing rapidly with the launch of new satellites every few weeks.

Traditional satellite Internet originates from a geostationary orbiting (GEO) spacecraft, which orbits the Earth approximately 22,236 miles above the planet. This parking space allows them to serve huge areas with a single (and very expensive) satellite which remains fixed in a part of the sky. But these connections are slow, as it takes about half a second for data to travel at lightning speed to and from GEO satellites, and each spacecraft can accommodate a limited bandwidth per user.

geostationary satellites go east-west nasa science visualization studio svs business insider — An illustration of two different geostationary satellites, which orbit approximately 22,300 miles above the Earth’s surface.

This is where Starlink comes in. Low Earth Orbit (LEO) satellites are about 65 times closer to the planet, reducing latency, and their large numbers provide greater bandwidth. Spacecraft are also designed to connect in space via laser beams, which are theoretically faster than fiber optic cabling.

“Typically, data centers can only operate when there is fiber optic connectivity,” Pandit said. “Starlink was kind of like the missing piece in bringing data centers or clouds closer to the smallest populations around the world.”

If businesses are willing to pay Microsoft, modular data centers can also function as content delivery networks: Starlink can download content and services on demand for rapid local use.

“This would allow, say, Netflix or Hulu to quickly access Azure’s cloud computing console and instantly run servers and storage in remote locations that would not typically be available,” Pandit said. “Now they can sort of go to a local market that otherwise would not have access due to capacity constraints in this area.”

So instead of waiting endlessly for an online movie to play only from a remote server – a service no one would pay for – a nearby Azure Space Mobile data center could download copies for a local distribution, thus helping to attract new subscribers. (YouTube and Hulu did not immediately respond to a request for comment; Netflix did, although it did not provide a statement in time for the release.)

‘In time, they will catch up’

spacex starlink satellite falcon 9 rocket launch October 6, 2020 flickr 50428050591_36defbe958_o — SpaceX’s Starlink-12 mission takes off during a sunrise over Cape Canaveral, Florida aboard a Falcon 9 rocket on October 6, 2020.

At the start of 2020, Amazon Web Services was the largest player in cloud infrastructure with 32% of the global market, compared to 18% for Microsoft and 8% for Google, according to a report by the Synergy Research Group. There is much more room for growth, however: it is estimated that more than 20 million Americans do not have broadband access, and more than 3 billion worldwide are completely offline.

In remote and rural areas, AWS could start to lose a lot of fertile ground to Azure Space, thanks to SpaceX. By the end of 2020, the network could see 1,000 satellites in orbit – a number Musk previously told Business Insider would make the system “economically viable” because it only needs to provide basic global coverage.

Pandit says AWS already offers connectivity to ground stations via satellites, although the company has yet to launch any of its 3,236 internet beam Kuiper satellites that would compete with Starlink’s offerings.

“It’s hard to say how far Amazon is compared to Azure and SpaceX. But we know SpaceX is way ahead in terms of satellite deployments, actual testing and validation of Starlink, compared to the Kuiper system from Amazon, ”Pandit said.

He doesn’t think anyone can write off Amazon, despite the delay in the internet space race.

“Amazon already has this massive cloud infrastructure that overshadows Azure. All they need is the space component, and over time they will catch up, ”Pandit said.

The company and its allies are on the right track. Blue Origin, the private space company Bezos established in 2000 and which personally funds to the tune of $ 1 billion per year, could launch its own partially reusable New Glenn rocket in 2021. With it, Amazon could presumably and relatively affordably launch Kuiper satellites and connect them to AWS.

jeff bezos blue origin new glenn rocket space 4x3 — Jeff Bezos is the founder of Blue Origin, a rocket company that tries to drastically reduce the cost of accessing space.

“When you combine them together, [Amazon is] more vertically integrated compared to SpaceX, which gives them a serious advantage. They can be slow to start, but in the end they can have a major cost advantage, ”Pandit said, adding that SpaceX, for its part,“ is betting that Azure can be competitive to respond to AWS in the future. “

Pandit noted that Starlink’s current and ongoing revenue streams may not be sufficient to support the ongoing launch, operation and replacement of Starlink satellites. But providing a spatial backbone for Azure could “be a good revenue generator” for SpaceX – and for Microsoft.

“It’s a big deal to let these data centers down in markets that nobody is touching right now,” he said. “I think for Azure, success will depend on how quickly Starlink continues to grow. And obviously they’re going crazy – they’re just going on and on.”

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