Falling from the sky: Why DJI is primed to lose the battle for the global enterprise (Part 1)
Eight years ago I was running global asset operations for the largest global solar service provider on the market - SunEdison. The day-to-day aspect of the role had its challenges, and like any good executive I was always looking for the next edge to keep our assets performing at peak output. So it was with interest that we came across a drone that allowed the operations team to identify broken panels and failing components through the use of thermal cameras while attending the industry’s largest trade show in Germany. Of course at that time the cost of the unit was exorbitant, the reliability questionable, and the regulatory framework nonexistent. All of which put that particular piece of technology in the "wait for it to bake" category; it was clear this was the future but the future seemed far away in 2010.
A few short years later and DJI had taken the consumer drone market by storm, essentially doing for drones what Canon did for "prosumer" cameras; they made a strong, quality product at an affordable price that the average Joe or Jane could use. Today their Phantom series dominates, having displaced hundreds of wanna be competitors based on price and performance, owning upwards of 70% of the prosumer sUAV market. If you wanted to buy the equivalent of their latest Phantom 4 Professional model (around $1500) back in 2010, it would not have been possible - the technology has moved that far that fast. Even a home brewed model, with fewer features and more operational challenges, would have been in the $30,000 + price range. So it seemed logical that DJI would similarly own the emerging enterprise market; they clearly understood the core technology, their software - while buggy - seemed adequate, and their brand was generally second to none.
The view from the ground
When my business partner and I started PrecisionXYZ, like many providers we thought we could standardize on DJI for all of our needs. And for smaller jobs in open flying areas they have largely met our requirements and delivered the data our clients need. When DJI partnered with FLIR to deliver what appeared to be a strong commercial thermal solution, we signed on, buying their thermal solution to deliver services to the solar sector. But slowly at first, and then with rapid succession, DJI made a number of apparent missteps. As we learned more about DJI it became obvious these were not mistakes, but rather part of the company’s cultural DNA as a Chinese firm. A recent project near several airfields and federal facilities highlighted these issues.
As seasoned operators know, flying near Class C or B airspace presents challenges, but when you add in the US Air Force, the US Navy, and a Federal penitentiary facility, you've got a solid 3 - 6 month wait before you can fly that project. It just takes that long to get approval from the FAA. This is where DJI comes into play, because even after you have all those permissions you still need DJI to unlock the UAV you bought from them.
Imagine going to a Porsche dealer and learning that while yes, your 911 is one of the finest performance cars on the market, you can only drive it in first gear unless you've got a written statement from the Highway Patrol, State Troopers and the county Sheriff testifying that you are, in fact, a safe driver. Now if you want to take the car to a race track for some high speed driving, Porsche needs to sign off on that once you've sent them the testimonials from the above authorities. If you're within 100 miles of any professional racing event, you'll also need a special key to start your vehicle that only Porsche provides. The key may, or may not, work - if you have issues please check your "key" software for a firmware upgrade. If you need help, be prepared to write in German because the customer support team has no phone support line, they operate on Central German Time, and their online support is only provided in broken English. That, in a nutshell, is what it's like working with DJI products. It's not uncommon to be blocked from flying their products due to area restrictions or random, poorly executed and delivered firmware upgrades from DJI corporate. The security issues with their solutions had already put us on a restrictive path with their products. But the job killing nature of their flight restrictions were the last straw and what ultimately led us down the path to invest in alternative, more reliable and secure solutions.
Safety for all or control for one?
It would be easy to ascribe this approach to a preponderance of caution in operating drones for the benefit of society at large; nobody wants a drone to fly into the flight path of a commercial airliner. It would be equally logical to assume this was a push to avoid liability for their products. But neither scenario is the case for DJI. Their model of controlling the actions of their customers derives largely from their origins as a Chinese firm looking to meet the restrictive requirements of the Chinese government. It's important to note that one of the very first restricted geo-fenced zones that DJI released was Tiananmen Square. No honest broker can tell you that decision was driven by a desire to meet safety requirements of the public airspace. It had everything to do with government control and DJI knowing what their masters required for them to remain a viable operation in China. A free roaming drone with real time, recordable video feeds that enabled you to observe government operations unrestricted and without oversight on mainland China? That was never going to be a reality for longer than the time it's taken you to read this article.
Back doors, broken trust and a market ripe for the taking
These control issues go hand-in-hand with well known backdoor data transfers from their product and application suite to their corporate offices. The data you collect will end up on a server in China; no small issue. This raises serious security concerns for any entity, government or private, that decides to use DJI products.
Every US firm needs to consider the wisdom of using a product to inspect sensitive or critical infrastructure, public or private, when there is greater than even odds that this information will end up in the hands of a potential US adversary. Essentially DJI has created the world's largest high fidelity, remote sensing network for the MSS (the CIA of China), and ironically it's being flown by the citizens of the states the MSS would like to monitor. No need for foreign agents when unknowing civilians will do the job for you just fine. The Department of the Army placed restrictions on the use of DJI equipment on their bases for a good reason, and it's difficult to come up with a good reason to loosen those restrictions. Other entities within the DoD would be good to follow suit.
So where does this leave the world’s largest sUAV vendor? The reality is that DJI is both blessed and cursed by the geography of birth. The issues they confront are not addressable via a software or firmware fix, or even internal process improvements. They are fundamental issues of broken trust. Easy, short term corrective paths don't exist in this scenario. And while there are other longer term solutions DJI can implement to address these challenges, they leave a large window of opportunity for other vendors to own the growing enterprise market. So who stands to gain and what will position them for success? More on that in the next posting.