2016 Trends: An Amazing Year for Commercial Drones

Industry Insights from Hendrik Boedecker and Colin Snow

By Darr Gerscovich, former SVP Marketing, DroneDeploy

2016 was a huge year in the evolution of the commercial drone industry. Significant advances in drone hardware, software and regulation opened the door to increased adoption. We saw businesses, particularly within agriculture and construction, begin moving from early experimentation to formal programs integrating drone data into their workflows. And even people outside of the commercial drone industry began to take notice when industry analysts, such as PwC, projected a drone economy in 2020 of $127B. To better understand the major commercial drone market trends that emerged in 2016, I asked industry watchers Hendrik Boedecker, founder and CFO of Drone Industry Insights, and Colin Snow, founder and CEO of Skylogic Research to share their top insights.

What was the biggest change you observed in the industry in 2016?

Hendrik: The increased importance of data within drone operations stands out for me in 2016. The full data value-chain (acquisition, processing, analysis and action) came to the forefront. As end-to-end commercial drone solutions became more prevalent in the marketplace, they enabled data to take a central role within commercial drone operations.

Colin: The biggest news of the year is that the FAA Part 107 regulations are now in place, and they’re not as onerous as they could have been. In the U.S., there is now a strong base for an industry and regulatory framework upon which to grow. The uncertainty is over, and businesses can begin offering drone services. I think that’s exciting and it has also opened the door to competition. Many think it’s a race to the bottom on prices for drone-based business services — and that’s true in part — but the other side of the coin is there is now more healthy competition, which will deliver increased customer benefits.

Did anything else catch your attention?

Hendrik: After the regulatory environment stabilized there was a big uptick in mergers and acquisitions, and a change in investment strategies. More acquisition activities focused on consolidation and integration, and we anticipate that this trend will soon outpace venture capital investments in the space. It is also notable that the US investment activities moved from primarily in China to Europe.

Colin: I agree, there were a lot of investments, mergers and partnerships. The major movers in this space were DJI, Intel, Parrot and Airware. Throughout 2016, DJI announced partnerships with at least 14 companies including Epson, Ford, Leica, Lufthansa and Measure. Intel got in the drone space this past year in a big way by acquiring drone manufacturer Ascending Technologies, as well as visual sensing company Movidius and drone software startup Mavinci. Parrot continued with their past strategy of making minority investments, including BioCarbon Engineering Ltd., a UK a drone-based reforestation company, Planck Aerosystems Inc., a US drone-based surveillance solutions for the Navy, and Nano Racing S.A.S., a French company developing small-scale racing drones. Lastly, in September Airware acquired Redbird with the intent of building a full-stack drone services company.

Was there anything that didn’t live up to the hype?

Colin: I think virtual reality (VR) and augmented reality (AR) for drones was all hype this year. The manufactures of VR and AR glasses made a lot of noise, so I expected to see a case study showing how someone was using VR/AR with data from commercial drones, but it just didn’t happen.