On May 30 SpaceX’s Falcon 9 launched Crew Dragon’s second demonstration mission from NASA’s Kennedy Space Centre in Florida, and the next day docked to the International Space Station (ISS). This is the first private aircraft to take people to the Space Station.
What makes this achievement even more remarkable is the fact that Falcon 9 is the world’s first reusable, two-stage rocket designed for the reliable and safe transport of people and payloads into space. It so happens that this reusable stage is also the most expensive part of the rocket which reduces the cost of space access considerably.
While all the headlines have rightly gone to SpaceX and their magnificent achievement there is another story here, that of two competing “super powers” who for decades have been jostling for dominance in space. Since the late fifties they have competed to put the first man in space, and then the first man on the moon. While the US definitely won the latter, Russia launched the first low orbital space station MIR which operated from 1986 to 2001. In 2000 this was replaced by a joint owned and operated ISS. Since 2011 NASA has relied on Russian Soyuz rockets to access the station due to financial constraints imposed on them by the US government.
It’s interesting that while Russia focused on developing their Soyuz rockets over the intervening decade NASA adopted a different long-term strategy. They realized that the costs involved prohibited further manned space exploration so they decided to engage with private enterprise. Elon Musk was one of many who competed for contracts. SpaceX’s total development cost for both the Falcon 1 and Falcon 9 rockets was estimated at approximately US $390 million. In 2011, NASA estimated that it would have cost the agency about US $4 billion to develop a rocket like the Falcon 9 booster based upon NASA’s traditional contracting processes, ie about ten times more.
Undoubtedly this partnership has been a win-win situation for SpaceX and NASA. It has alleviated the strain of government-imposed financial constraints and allowed NASA to focus on the business of space exploration. Equally, by giving high-level specifications they have allowed SpaceX to maneuver in their contractual response. Looked at another way, this partnership allowed NASA to become less attached to their legacy hardware and enabled SpaceX to innovate and deliver their groundbreaking re-usable rocket.
It’s ironic that in the early days of SpaceX, Elon Mush sought out Russia as a potential provider of cheap rockets, but found that they were too expensive. So he went home empty-handed and was inspired to create re-usable rockets instead and the rest is history.
After the successful launch and docking by SpaceX The Moscow Times reported that this “was a wake-up call” for Russia and the Russian space agency. Over the last nine years they have been the sole source of access to the ISS. If NASA gives the contract for transport goods and humans to SpaceX, the annual losses for Russia could be more than US $200 million, not to mention the additional US $60 million per seat proposed by Musk to access the ISS.
This real-life space exploration gives us an illustration of the classic myopic strategy adopted by so many businesses, immediate financial returns at the expense of long term viability. Russia continued to build Soyuz rockets for short term gain while their competitors took a broader longer term view. NASA invested in the future while Russia hung onto the past.
What has this got to do with your business?
Successful business requires visionaries who are willing and able to envision their future success and make the decisions necessary to make that happen.
Incumbent enterprises particularly in the financial arena have for so long believed in it’s seemingly unassailable position that they have postponed modernising their technology. The core stumbling block to this digital transformation has been the over-complexity of legacy infrastructure whose modernisation till now has required time, resources and high levels of risk. Most CxOs have preferred to work around them and thereby providing temporary solutions. COVID19 highlighted the difference between simply presenting a pretty digital facade and truly providing your customers with a personalised digital experience, which requires the seamless flow of back-end processes with a customer facing mobile app.
The fundamental issue is the flexibility of your current technology. If you are still tied to legacy software it’s very difficult to make changes quickly enough at the speed the the market demands. Cost is also another big problem. The gap between newcomers who can avail of the latest technologies and business with old legacy systems is widening.
Pivot Cloud Platform has been designed to address these issues and to enable your business to compete into the future.
Written by: Jacinta
CMO and Co-Founder of Pivot Cloud Solutions