The term “cloud” in “cloud computing” has always been a metaphor, until now. Traditionally, it refers to the fact that users can access data and applications anywhere in the world via the Web.
Of course, the information has always been coming from here on earth and resided in remote data centers. The idea was to say the world’s wealth of information was so ubiquitous it was like it was streaming down from a cloud.
And now, that image is about to go from metaphor to literal real-life. See, privately held SpaceX is planning to provide civilian and military cloud services by beaming them from low-orbiting satellites.
The project is projected to be able to give internet access to nearly every populated region of the globe in 2021.
Here’s the thing. To accomplish the bold mission, SpaceX has teamed up with one of the world’s top cloud computing firms.
Today, I’ll show how the new mission is part of its core expertise and why this exciting leader is set to double earnings from here….
To the Stars
Now then, as part of this Starlink program, SpaceX has launched 835 satellites, with a goal of having 1,440 circling the globe by 2022.
But these aren’t your regular communication satellites. Those tend to circle the Earth at about 22,000 miles above sea level.
At that huge distance, the satellite stays in the same spot in the sky, so satellite dishes don’t have to constantly be recalibrated.
There’s also no air to slow the satellites down, as Earth’s atmosphere only extends a few hundred miles above sea level.
The downside is the time it takes to beam signals up to the satellites and back down again. 22,000 miles is so far, it takes light 0.2 seconds to cover the distance. To relay a signal from one place on Earth to another via one of these satellites, you have to double that.
Now, 0.2 seconds may not seem like much, but if you’ve ever wondered why satellite Internet is so slow, or why news reporters in far off places take so long to answer questions, that 0.2 seconds is why.
Even with lots of bandwidth, that 0.2-second delay in the signal getting to its destination makes for awkward pauses in conversation, websites that freeze, and sometimes even apps that just won’t work.
SpaceX’s Starlink system is different. Instead of orbiting at 22,000 miles, SpaceX is launching its satellites at just 340 miles.
That’s almost low enough to touch actual clouds. At this altitude, there’s hardly any lag in beaming signals to and from the satellites, which makes these Starlink satellites perfect for providing Internet access and cloud service wherever you are.
This is all part of SpaceX revolutionizing space travel in general. With its state-of-the-art launch rockets that are largely reusable, the company has dramatically cut the cost of going into space.
Today, SpaceX is sending cargo to space at under 2% of NASA’s price.
As you can imagine, this technology has already gotten the Pentagon’s attention, which signed a $149 million contract with SpaceX for special Starlink satellites to detect enemy missile launches.
But the main use of SpaceX’s Starlink satellites will be Internet and cloud access.
And that’s where SpaceX’s top cloud computing partner comes in.
The partner is Microsoft Corp. (MSFT), the company behind the Azure cloud platform.
As part of the partnership, Microsoft and SpaceX will co-sell Starlink Internet service and the Azure cloud platform to enterprise customers.
It also makes Starlink an integral part of Microsoft’s recently announced Azure Orbital service, which has Microsoft help customers directly connect their satellites to the Azure cloud.
And don’t forget that last October, Microsoft won the Pentagon’s massive Joint Enterprise Defense Infrastructure (JEDI) contract. That’s a 10-year, $10 billion deal to provide infrastructure and platform services for the Pentagon’s business and mission operations.
The goal of JEDI is to unite the entire military on one platform. To put every soldier, ship, and airplane on a single data framework, and a single cloud.
Starlink’s low latency, high speed, and eventually global coverage are the perfect fit for that, making the partnership with SpaceX a great add-on for Microsoft.
This shows that, as I’ve been saying for years, Microsoft is a great cloud provider. Even better, this Starlink partnership has made Microsoft a great backend play on SpaceX.
It’s a rare opportunity to profit from one of the most revolutionary private companies in the world.
Microsoft reported earnings on October 27 with its Microsoft’s Azure cloud revenue up a whopping 47%. It also saw per-share profits climb by 44%.
That raised its three-year earnings average to 20%. At that rate, earnings are on pace to double in just over 3.5 years.
But that may be conservative because the firm keeps finding new growth initiatives like the satellite cloud partnership with SpaceX we’ve talked about today.
So, we can count on Microsoft keeping its edges sharp and profits high for many years to come. If you’d like to learn more about how you can get started with Microsoft and other industry leaders with strong long-term profit potential for less than $5, just click here.
Cheers and good investing,
Michael A. Robinson