Space, DaaS and the Return of Hardware

How Hardware and DaaS are Shaping the Space Economy

B2B Marketplaces as Foundational Infrastructure

If we’ve done our marketing properly you’ll know by now that we love B2B marketplaces and platforms. These businesses have evolved into essential infrastructure, connecting businesses, enabling efficiencies, and supporting growth across industries. These platforms don’t just facilitate transactions — they are the foundational layer that makes digital economies resilient and scalable. As investors, we’ve long recognised the importance of these marketplaces as critical infrastructure for the digital economy.

But as technology progresses, there’s an old layer of infrastructure coming back into focus: hardware, driven by the demands of advanced applications, like artificial intelligence (AI). In the same way that B2B marketplaces and platforms serve as digital infrastructure, the convergence of hardware and Data-as-a-Service (DaaS) is now emerging as a new kind of infrastructure — one that’s poised to shape everything from AI to the space industry.

The Return of Hardware: Why AI and Other Innovations Are Driving Demand

If the hardware industry was a music artist, it would be Mark Morrison (Leicester legend as an FYI)… It’s back! After years of software-first innovation, I believe (and a few others do as well) that hardware is making a comeback, and AI is a major driver of this resurgence. Generative AI models, for example, require immense computational power and vast amounts of data. Processing, storing, and analysing this data can no longer rely solely on cloud-based solutions. Companies like Nvidia have seen significant growth by providing the specialized hardware — namely GPUs — needed to power complex AI models. These models require such high levels of performance and efficiency that only dedicated, optimized hardware can meet the demand.

However, the renewed demand for hardware isn’t limited to AI. The rise of IoT, edge computing, and the need for real-time data analysis are all pushing hardware to the forefront once again. In industries like telecommunications, healthcare, and now space, businesses need proprietary sensors, processing units, and satellite systems to collect, process, and transmit data with unprecedented speed and accuracy. Hardware provides a defensible asset base, creating a foundation for generating high-quality, actionable data — a critical component for many industries.

How Data-as-a-Service (DaaS) Leverages Hardware for Maximum Impact

Data-as-a-Service (DaaS) complements hardware beautifully by offering a recurring revenue model that scales effortlessly across industries. DaaS allows companies to provide data on demand, eliminating the need for clients to invest in and manage their own data infrastructure. Instead, businesses can access real-time, high-value data precisely when they need it, directly through a subscription model.

DaaS is particularly effective when paired with proprietary hardware, as it adds a dual-layered advantage: the hardware generates a steady stream of high-quality data, while the DaaS model monetises that data. This structure is not only resilient but also adaptable. The proprietary hardware ensures a controlled, high-frequency data pipeline, while the DaaS component makes the data accessible to a wide array of clients without the burden of managing hardware. For investors, this hybrid setup offers both the defensibility of hardware ownership and the scalable revenue of DaaS, making it an ideal structure for long-term value creation.

The Space Industry: A New Frontier with Expanding Opportunities

Now, before I eloquently pull this article together, I want to give some background into why I think the space industry is interesting from an investment perspective (and not just because I’m a huge Star Wars nerd).

The space industry has evolved far beyond government-led exploration and experimentation, emerging as a thriving sector with real-world applications that profoundly impact our daily lives. Today, space technology is the backbone for essential services we rely on without even realising it. Satellite-based infrastructure enables GPS navigation, weather forecasting, telecommunications, and global internet access. This technology underpins not only consumer conveniences but also critical operations in agriculture, environmental monitoring, and emergency response, playing a key role in improving productivity, forecasting extreme weather, and coordinating disaster relief.

Furthermore, space assets are indispensable for national security, powering intelligence, surveillance, and secure communications for defence agencies worldwide. These applications demonstrate that the space industry is not limited to research and exploration; it is fundamental infrastructure supporting both the economy and public safety on Earth.

The combination of falling technology costs and a broader understanding of space’s impact on Earth has opened this once-exclusive domain to private investors. Previously, the high costs and limited knowledge of space’s everyday applications restricted investment to state-backed programs, where large-scale public funds could absorb the risk. Today, however, advancements in miniaturised technology and reduced launch expenses have democratised space access, allowing private companies to develop innovative solutions and services. This shift gives private investors a unique opportunity to support foundational infrastructure that not only drives future space exploration but also enhances the quality of life on Earth. The space sector has thus become a high-potential investment frontier, enabling private capital to play a transformative role in an industry once dominated by government resources.

Why DaaS and Hardware Are Poised to Transform the Space Industry

So, what would a reasonable business model look like for a space startup?

The power of this hybrid model — combining hardware and DaaS — is magnified in the space industry, where the need for precise, real-time data is essential. Space operations involve high-stakes applications, from defence and telecommunications to environmental monitoring and space tourism. The space environment is complex, and reliable data on conditions such as radiation, solar flares, and atmospheric disruptions is critical for ensuring mission safety, optimising satellite operations, and protecting assets.

In the space sector, proprietary hardware, such as satellite constellations and advanced sensors, collects data that’s unmatched in quality and scope. When combined with DaaS, space companies can deliver critical information to clients who depend on real-time data to make informed decisions. For example:

• Defence Agencies use space-based DaaS for precise space weather forecasting, helping protect satellite and communication assets from harmful solar events that could compromise national security.
• Telecommunications Providers rely on space DaaS to maintain signal quality, using real-time data to predict and mitigate atmospheric disruptions that can impact global connectivity.
• Weather Services depend on satellite data for accurate, timely forecasts that inform daily operations, disaster preparedness, and climate research.
• GPS and Navigation Systems benefit from space-based data to provide reliable positioning services, essential for everything from personal navigation apps to logistics and transportation networks.
• Environmental Monitoring Organisations utilise satellite data to track deforestation, ocean health, and pollution levels, which supports conservation efforts and policy-making on climate action.
• Space Tourism Providers need up-to-the-minute environmental data to ensure passenger safety in orbit, safeguarding against risks like sudden radiation spikes.

In these applications, DaaS and hardware provide a new type of infrastructure in space, delivering essential services to both space-based and terrestrial industries. By owning the data-generating hardware, companies create defensible, high-quality data streams, while the DaaS model ensures that the data remains accessible, monetisable, and scalable across multiple sectors.

Why Infrastructure Investors Should Consider Space DaaS and Hardware

For infrastructure-focused investors, this hybrid model represents a natural progression from traditional B2B platforms. In the same way that marketplaces and platforms enable economic resilience and connectivity on Earth, space-based DaaS and hardware provide a foundation for critical services in an increasingly connected world. As industries like defence, telecommunications, and environmental monitoring grow more reliant on real-time space data, the demand for reliable space infrastructure will only increase.

Investing in space DaaS and hardware is thus an opportunity to support the infrastructure of tomorrow’s economy. With high-quality, real-time data becoming indispensable across sectors, companies that provide this foundational layer in space are positioned to capture significant market share, creating long-term value in a high-growth market.

The Future of Space Infrastructure

As we look to the future, it’s clear that the combination of hardware and DaaS in space will play an essential role in building the next generation of digital infrastructure. Much like B2B platforms and marketplaces, this new infrastructure will support resilience, connectivity, and growth across industries, bridging the gap between Earth and space. For investors focused on foundational infrastructure, I strongly believe that space presents a unique opportunity to build value by supporting the data and hardware systems that will power our interconnected world for years to come.