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June 04, 2012

Has the Space Industry's PC Moment Come?

By Doug Mohney, Contributing Editor

Last week, ArianeSpace, ATK, Boeing, Lockheed-Martin and Pratt Whitney Rocketdyne felt a chill, as SpaceX (News - Alert) successfully completed its mission to the International Space Station (ISS). 

The space industry is changing and some of its name brands will follow big iron computer manufacturers into the footnotes of history due to an unwillingness to change an institutional mindset.

Once upon a time, glass-enclosed mainframes and minicomputers ruled the land. Companies like Burroughs, Cray, Control Data Corporation, Data General, Digital Equipment Corporation (DEC), IBM (News - Alert), NCR and UNIVAC were names that generated awe and respect with big iron computing machines.  

Today, the only true survivor is IBM. The rest fell. Why?

Despite almost being a cliché for corporate stuffiness, IBM made three major changes in order to survive and thrive through decades of turmoil in the computing industry. First, the company launched a Skunk Works-style effort to develop the IBM PC, establishing a standard for desktop computing hardware during the chaos of the CP/M days. Second, the company embraced and popularized the Internet at an earlier stage. Having evolved from a hardware-based business to a services and solutions power, it was willing to shed its PC business.

All the others fell, unable to change an institutional mindset focused on selling the same basic product (mainframe, microcomputers) and not bold enough to create new products that might fundamentally change the shape of the business.

SpaceX has successfully launched the Falcon 9 rocket – the core of its business – three times and orbited and recovered two Dragon spacecraft. It has done so by using a combination of private investment and NASA R&D money, with plans to build larger rockets and transport humans into low earth orbit and beyond. It also plans to roll reusability into its rockets to further lower launch costs.

And what were responses of the space industry old guard? Snippy public comments, off-the-record backstabbing and PR campaigns waged to cast aspersions on "commercial" space in order to protect existing market share – rather than figuring out ways to lower cost of existing products and creating genuinely new products. 

If there’s any IBM out of the old-guard space companies listed above, it’s Boeing (News - Alert). The company has a diversified portfolio of space assets, ranging from satellites to launchers. Its team competing in NASA's Commercial Crew program to develop privately-funded manned spacecraft to low earth orbit has been bold enough to state it will look for something other than an ULA Atlas V rocket if the price of the Atlas V doesn't go down. ULA is jointly owned by Boeing and Lockheed Martin (News - Alert).

Boeing also has the asset of a healthy commercial aircraft industry, so it can afford to be more flexible in how it approaches the changing space market.

One shouldn’t expect the rest of the old guard space companies to go away overnight. However, SpaceX is being followed by the very-stealth Blue Origin and a more public Stratolaunch Systems in building launch companies. There's also a potential for Huntsville-based Dynetics to pull out a surprise or two to further shake up established launch providers.

Edited by Braden Becker

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