Look up: The commercial drone market is about to take off

The skies over America are about to get a lot more crowded.

As the Federal Aviation Administration prepares new guidelines for the use of unmanned aerial vehicles, or UAVs, an entire industry-in-the-making is champing at the bit to start using drones for commercial ventures, from selling real estate to dusting crops to baby-sitting oil rigs.

“This market’s going to be huge,” said Ken Loo, a Sunnyvale mechanical engineer who used a 3-D printer to create his own UAV and hopes to one day become a drone consultant. “The possibilities are endless; I know so many people getting into this field now so that they can pounce once the FAA comes up with its rules.”

And there’s the rub. With laws essentially banning the commercial use of drones in this country, the FAA is negotiating a political and technical minefield to figure out how to regulate this booming and controversial technology, with a resolution expected as early as this year. Until then, UAV businesses in the United States either must sell their services to clients in foreign countries — such as Australia, where the rules are more lax — or spin their wheels, fine-tuning their products until this great tech land rush finally gets underway.

“Aerial robotics will be a significant market, assuming the FAA doesn’t put huge restrictions on it,” said analyst Michael Blades, who covers the commercial drone market for global consultants Frost & Sullivan. “But the FAA’s in a tough spot. For starters, the airspaces in places like Australia and Brazil aren’t nearly as crowded as ours. And the first time one of these unmanned vehicles accidentally takes down a jet plane, the FAA will be torn apart. So the rule-making process going on right now is tricky, because in a way the sky is a political battleground.”

Drones come with other baggage: Many Americans are outraged by the military’s use of UAVs to take out targets in foreign countries. In addition, privacy groups have raised alarms about government agencies and police departments using UAVs in ways that could violate civil rights. While UAV supporters say such abuses would be outweighed by the benefits, some worry that anyone with an inexpensive drone and camera could fly it over the backyard fence and spy on their neighbor.

Free from many of the legal restrictions on commercial use, recreational use has taken off, and much of the action is here in the Bay Area. With the advent of more affordable multirotor devices, such as the DJI Phantom Quadcopter that can be purchased for as little as $400, the Bay Area is abuzz with unmanned aircraft — literally, with enthusiasts gathering en masse to fly drones at places such as Sunnyvale’s Baylands Park.

While the FAA allows personal use of drones under certain altitudes and subject to other restrictions, much of the activity remains outside the law. However, the rules are unenforceable by an agency set up to regulate manned aircraft operating out of airports, say experts such as former FAA official Doug Davis.

So the drones keep on coming. Just a few months ago, San Jose UAV aficionado Roy Dumlao noticed the DJI Facebook page had 1,000 followers; it now has 68,000. Dumlao, a systems analyst who hopes to someday offer his drone-videography services to building inspectors looking for easier access to roofs, said there is now “this whole underground drone community that’s mushroomed as the technology became cheaper and easier to use.”

At the same time, commercial-drone startups are proliferating all over the Bay Area, including small shops that build the vehicles as well as software firms that are creating electronic systems that allow an entire fleet of UAVs to “talk” to each other.

In addition, big-data companies see tremendous potential in unmanned and even automatically programmed aircraft for gathering information from the air, whether it’s counting plants in an Iowa cornfield or using sensors to detect pipeline gas leaks. As the technology improves, the money backing it keeps flowing. Last year was a record year for venture investment in drones, with a reported $79 million in 15 deals, including some by marquee investors such as Google Ventures and Andreessen Horowitz.

“We’re looking at a U.S. market that’s going to explode in the next couple of years,” said Amish Shah, founding partner of Sierra Maya Ventures, which has invested in a San Francisco-based aerial robotics startup called Skycatch. “It’s already happening in places like Australia, Germany and France, which has 100 licensed UAV pilots. But ever since Amazon’s Jeff Bezos announced they were testing delivering merchandise by drones, this technology is now on everyone’s radar.”

Skycatch CEO Christian Sanz could be the face of the drone boom. A year ago, while looking for viable uses of the technology, he ended up at a Palo Alto construction site, capturing images and video with his UAV. Before long, he started receiving more and more requests for drone-borne visual data that might help cut costs, such as moving tall cranes around in a more efficient manner.

“I was able to prove that it was less about the drone and more about the data,” said Sanz, whose team then created a robot that essentially takes the place of the human remote-controller. “The robot swaps out and charges the drone’s batteries, and sends the data to the cloud, so it’s completely autonomous, which is what my clients wanted.”

Skycatch signed orders last year with six clients around the world, including “some of the largest construction companies on the planet.”

Once the FAA clears up the regulatory confusion, advocates say there’s no end to the commercial tasks drones could be assigned, from looking for leaks above oil rigs in the Gulf of Mexico to washing a skyscraper’s windows in Manhattan to monitoring solar farms in the Arizona desert.

For now, though, the skies are decidedly hazy. As UAV advocate and consultant Patrick Egan puts it, “Just because it’s illegal to make money with drones doesn’t mean there aren’t tens of thousands of people around the country right now doing it.”

While large U.S. companies bide their time by working with clients in countries with less restrictive laws, smaller operators bob and weave around the law to do things like photograph weddings and real-estate offerings. However, Egan sees a breakthrough coming.

“There’s a real convergence going on right in Silicon Valley with robotics, UAV and commercial spaceflights,” he said. “Things are starting to jell, and this could be another huge economic engine for the valley. And while people would have laughed at this stuff a few years ago, they’re not laughing now.”

http://www.mercurynews.com/business/ci_25256472/look-up-commercial-drone-market-is-about-take