<div>If you happen to be near a military base or reserve police facility, you might spot a flying object. Chances are, it is a drone being tested to ascertain if it can carry cameras, thermal sensors and image processors at a height of, say, 200 metres for commercial use. While commercial use may not be far off, testers believe that retail home delivery is still a tall order as the aerial vehicles cannot pinpoint addresses. For that matter, even army drones lack the ability to consistently hit targets. That said, the flying objects are a reality one has to come to terms with. According to aerospace research firm Teal Group, the size of the drone business globally is $89 billion. China has over 900 drone manufacturing companies, some of which can also add hardware to a drone. In the US, there are more than 200 drone companies manufacturing hardware, with over two dozen that can add services to complement the hardware.</div><div> </div><table width="200" cellspacing="6" cellpadding="6" border="2" align="right"><tbody><tr><td><strong>Features Of A Rs 2 Lakh Drone</strong></td></tr><tr><td> • 3 watt brushless motor<br />• Radio frequency modules<br />• Communication chips • Image-recognition chips (not payload)<br />• Infra-red chips (not payload)<br />• GPS module • 4G LTE to process data (optional)<br />• Camera<br />• Laptop for remote monitoring of drone<br />*Payload is any other component other than flying component</td></tr></tbody></table><div>India is doing its bit too. There are several pilots that are on currently. Only, none of them has perfected a business model as yet. After all, it is no simple business; and a lot more than a hobby involving a semi-professional kit with cameras. Waiting To Take Off Of the six drone startups in India that BW | Businessworld spoke to, Chennai-based Aira Futuristics has already shut shop, while the rest are waiting to see an uptick in their fortunes. Pritam Ashutosh Sahu was a student of aeronautical engineering at Anna University in Chennai in 2008 when he got interested in drones. A professor helped him secure an internship with the National Aerospace Laboratories (NAL), Bangalore, in his second year. “After that, I hardly attended college. I spent months in NAL trying to build drone composites and electronics,” says Sahu, co-founder of Edall Systems in Bangalore. By the third year, Sahu and some of his classmates were interning full-time at NAL. Together, they built a drone with a wingspan of 10 feet, powered by a 3 watt brushless motor. Impressed, the college awarded them the first place in the college academic list. And Sahu was hired by NAL on a contract basis to work on aeronautical systems. In 2011, the entrepreneurial bug bit him, and he floated Edall Systems. It started off as a course provider and training ground for young engineers keen to learn how to build drones and other flying machines. “When we started, I wanted to share my experience at NAL with other students, so we tied up with several colleges,” says Sahu. The idea was to use the money from teaching to develop drone services. The company imports drones from China and adds additional hardware such as a camera, which can communicate with a command centre. While its business model is still sketchy — primarily an annual maintenance and service model, where analysis of the photographs taken will be a pay-as-you-go service — the company is banking on support from civil organisations and the police. So far, the founders have invested around Rs 30 lakh in the business. These drones cost less than Rs 5 lakh apiece and are available on a pre-order basis.</div><div> </div><div><strong><img width="640" height="350" src="/image/image_gallery?uuid=66a668aa-be41-4f17-a675-c2ebb53f2a07&groupId=222861&t=1419336713149" alt="" />All About The Platform</strong></div><div>Singapore-based 21-year-old Pulkit Jaiswal, along with partner engineer Mark Yong, boasts of being able to deliver enterprise-grade drones. “We build a platform on top of the drone and add services. The hardware is commoditised,” says Jaiswal, co-founder of Garuda Robotics. Their drones are currently used to monitor large fields of solar installations. “The drones fly across cells daily and are able to use their cameras to detect any damage and the rate of damage to these panels,” says Jaiswal, who dropped out of an Ivy League college in the US to design such systems. According to him, it is the platform that is important — one where services can be added</div><table width="200" cellspacing="6" cellpadding="6" border="2" align="right"><tbody><tr><td><strong>Business Model 1</strong></td></tr><tr><td>•Assemble hobby drone to mount camera<br />•Cost: Rs 50,000 to Rs 2 lakh<br />•Endurance: 20 minutes and up to 150 metres<br />•Sell hardware and process images<br />•3 watt brushless motor<br />•Annual contracts or drones leased for camera shoots<br />•Potential: No high impact. The business can be commoditised faster</td></tr></tbody></table><div>on top of the software for any company or business. He says his drones — priced at over Rs 40 lakh each — can work on any new-generation network such as long-term evolution (LTE) and transfer data to a tablet or a smartphone. Garuda’s business model is quite unique — clients pay for the software and the data processing. It ships the entire drone to customers along with the battery and the charging stations. It then integrates the platform onto the drone with the help of a tablet or other device. The company is now in talks with mining and oil and gas companies. Jaiswal and Yong have managed to raise $ 1 million in angel funding. While their business is flourishing in Singapore, Jaiswal rules out drone services in India for the moment, citing the regulations that protect civilian airspace. Today, all drones need permission from the civil aviation ministry, except those that fly under 500 metres; the latter can be used without any permission to monitor sites and buildings. He, however, admits that the opportunity does exist.</div><div> </div><div>Running Into Turbulence Globally, players are pondering over the various functions that drones can serve. EasyJet in the UK is mulling the possibility of using drones to inspect flights before takeoff; French auto major Renault has built a concept called the Kwid, a drone assistant to cars that will help navigate through crowded streets and warn of potential threats. Wildlife protection agencies and farmers in the US are using drones to monitor large tracts of land without having to deploy manpower. A German startup called Skysense Hangar is devising applications to remotely charge drone batteries while in flight.</div><div> </div><div>In the US, many a startup is using avionics. A startup named DroneDeploy —which uses drones to photograph large tracts of land and wildlife in the US — raised $2million. Its drones can be controlled with a browser-based application.</div><div> </div><table width="200" cellspacing="6" cellpadding="6" border="2" align="right"><tbody><tr><td><strong>Business Model 2</strong></td></tr><tr><td>•Assemble full drone based on government and military specifications<br />•Mount high resolution video camera<br />•Cost of drone: Rs 50 lakh<br />•Endurance: 5 hours and 1,000 metres<br />•Remote battery charging<br />•Data processing of images<br />•Use of drone to identify damage<br />•Use of drone for security and rescue<br />•Integrate with tablets, laptops and servers<br />•Reduce human intervention<br />•Heavier batteries<br />•Run on 170 watt brushless electric motors or petrol<br />•Use: security, reconnaissance and citizen monitoring<br />•Annual maintenance contracts and predictive maintenance services<br />•Potential: Dependent on government orders and procurement policies; low risk because government needs drones for patrols<br />•Payload: 15 kg</td></tr></tbody></table><div>One company that is striving to take drones commercial in India is ideaForge — started by five graduates from IIT Bombay in 2008. It has started several pilots for forest departments and the police forces of some states. Co-founder Ankit Mehta believes their drones are state of the art because they are built from scratch and built to last. “We manufacture our own drones with applications specific to India,” he says. Mehta adds that ideaForge’s drones do not have semi-professional assembly kits. “We have serious data logging, image recognition and GPS sensors going into our drones,” he says. These drones — meant for government and semi-government agencies — are made to order and have a waiting period of three to four months. “We focus on the imagery part of the business; our system can detect humans from a thousand metres,” he adds.</div><div> </div><div>The journey so far has been far from easy for the founders of ideaForge . In the past three years, they have given 300 demonstrations and yet corporates and government bodies do not see any use for their drones. “The problem is the cost; these drones cost a minimum of Rs 25 lakh. The cost-benefit is what companies have not been able to determine when they use drones,” says Mehta. His team is, however, determined to survive the dry phase after having put each of the drones through a thousand hours of flying to test for battery life, communication range and wind resistance. The algorithms and services built into their products are what set them apart. They provide the entire hardware and maintenance of the software to the client on an annual basis.</div><div> </div><div>In 2008, Mehta and the other co-founders raised $250,000 as debt from the government-run Technology Development Board. They are now in the process of raising Rs 24 crore more.</div><div> </div><div><strong>Sky’s The Limit</strong></div><div>Indian drone startups suffer from hardware and software complications as well as the lack of meaningful business execution. Cameras and image recognition are key areas of concern for them. For higher resolution pictures taken from a great distance, the cameras require a larger lens, a bigger motor, battery and sensors, making the drone more expensive. The payload or the weight other than core flying functions of the drone should not be more than 2 kg for a 2 ft covert drone used in police operations or for corporate surveillance. Add sensors and services, and the payload makes the drone unviable.</div><div> </div><table width="200" cellspacing="6" cellpadding="6" border="2" align="right"><tbody><tr><td>Business Model 3</td></tr><tr><td>•Import drone with hardware including video camera<br />•Build software applications<br />•Endurance: 5 hours and 500 metres (regulated)<br />•Integrate with smart devices for data processing<br />•Use apps to control drone<br />•Build applications for corporate requirements<br />•Cost: Rs 50 lakh<br />•Use data collected on field for analytics<br />•Reduce man hours on field<br />•Used on production sites<br />•High-end cameras used<br />•Heavier batteries<br />•Run on 170 watt brushless motors or on petrol<br />•Potential: Dependent on corporate business-sharing model, high risk if businesses do not see potential<br />•Payload: 5-10 kg</td></tr></tbody></table><div>However, the good thing is that image processing technology is fast catching up. Google-backed Skycatch has raised $13 million in order to bring high-resolution images to its clients. StitchCAM, another startup in the US, has created a sensor that can deliver high-resolution pictures from drone cameras.</div><div> </div><div>Working along similar lines are four Mumbai college graduates who started AirPix — it aims to resolve the problem of poor image resolution from drones. “Our product is not yet commercial as we are working on image sensors that can take pictures of a gradient and make 3D models,” says Aniket Tatipamula, co-founder of AirPix. He says the company, in association with a windmill farm, has managed to demonstrate how the blades of a windmill can be monitored using photographs sent by a drone. The company plans to create a business model around photography analysis, 3D modelling and annual maintenance contracts.</div><div> </div><div>There are other serious players in this business who work with the Defence Research and Development Organisation and the army on a regular basis. Tata Group’s Aurora Integrated Systems has been making drones for eight years now. It has two unmanned aerial vehicles that are already in commercial deployment. The company did not comment.</div><div> </div><div>According to Gartner Research, there is an enormous opportunity for semiconductor players such as Aeroflex, Xilinx, STMicroelectronics and Freescale (chipmakers) once restrictions on commercial drones are lifted.</div><div> </div><div>So the next time you jump a traffic signal, you may have a drone follow you and take a picture up close. We are, however, still a long way from drone retail delivery as the telemetry depends on the GPS signals received, and the drones are not a hundred per cent accurate in identifying specific houses. It is also far-fetched as no drone under six ft can travel 7-8 km from the warehouse to deliver the product. Even if it were to become possible in the future, the question remains: Can we trust the technology or the people behind the technology? Drone companies would like to believe that we should but right now they continue to struggle to crack the technology and business model conundrums.</div><div> </div><div>(This story was published in BW | Businessworld Issue Dated 12-01-2015)</div>