The satellite and telecommunications industries are increasingly converging to create unified Non-Terrestrial Networks (NTNs). This convergence provides seamless global connectivity, helping bridge the digital divide, provide emergency communications services, and unlock a wide range of enterprise applications. ABI Research’s latest analysis underscores the pivotal role of cloudification and Software-Defined Satellites (SDSs) in this transformation. These technologies further virtualize network infrastructure and enable scalable networks to quickly adapt to dynamic demands.
Today, just 3% of total active satellites in orbit are software-defined. By 2031, we forecast that number will more than octuple to 26%, driven by cloud-native functionality, cellular standardization, and vertically-integrated supply chains for satellite manufacturers.
Despite the potential of cloud-driven SDSs, industry stakeholders face challenges in modernizing infrastructure and aligning technical standards. Using findings from ABI Research’s latest market data and various discussions with industry players, this blog will:
- Assign a definition to software-defined satellites
- Examine how cloud-based SDSs support satellite-cellular unification (NTN)
- Forecast the number of SDSs in orbit by satellite operator
- Identify the opportunities of virtualizing network hardware
- Provide actionable strategies for satellite and mobile operators
What Is a Software-Defined Satellite?
A Software-Defined Satellite (SDS) is an advanced type of satellite that can be reprogrammed in orbit to perform different tasks, unlike traditional satellites with fixed functions. As an analogy, think of how smartphones can update mobile apps and add new functionality without having to release a new smartphone. Similarly, engineers can change a satellite’s software to handle new tasks and services without launching a new satellite into orbit. This flexibility, enabled by cloud computing resources, makes these satellites more cost-effective and adaptable for a variety of use cases like in-vehicle or in-flight connectivity, asset tracking, land mobility, and more.
The Role of Cloud and Software-Defined Satellites
Cloudification is reshaping the satellite industry by enabling flexible, software-driven network architectures. Cloud integration enables satellite operators and Mobile Network Operators (MNOs) to manage constellations, ground stations, and wide area networks through software.
At the space layer, SDSs incorporate regenerative systems and reprogrammable architectures such as software-defined radios, Graphics Processing Units (GPUs), and Field-Programmable Gate Arrays (FPGAs) to process data onboard. This reduces operators’ dependence on ground stations and can rapidly reconfigure missions.
The 3rd Generation Partnership Project (3GPP) is serving as a key facilitator of SDS momentum. First, Release 17 introduced the integration of satellite technologies into the cellular communications ecosystem. Beyond that, Release 19 enhances satellite-cellular integration by introducing satellites with regenerative payloads hosting gNodeB. 6G standardization, already in progress, further advances this integration by emphasizing end-to-end network slicing and unified network architectures.
To conceptualize the surge in cloud-driven SDSs, ABI Research compiled a forecast for the total active number of digital and software-defined satellites in orbit through 2031. Our findings indicate that the number of these cloud-supported satellites orbiting Earth will increase from 736 in 2025 to nearly 11,000 by the end of the forecast period. Most currently active SDS networks consist of satellites deployed by Spire Global, Iridium, and ICEYE. However, my team and I anticipate “new space” companies like Amazon Kuiper and SpaceX to control the majority of SDSs in orbit by 2031. Chinese operators with mega constellations will also drive network cloudification in the space industry. Amazon and SpaceX, along with select Chinese operators, have strong control over their supply chains, enabling manufacturing at scale. Remote sensing operations in Low Earth Orbit (LEO) will be a primary catalyst for growth in SDS networks.
Figure 1: Key Companies and Ecosystems in Space Network Cloudification
(Source: ABI Research; Note: This list is not exhaustive*)
Cloud-native Network Functions (CNFs) at satellite gateways further support SDS development. These virtualized systems decouple control and data planes, centralizing intelligence for efficient resource allocation. As a result, satellites evolve from static platforms to dynamic nodes capable of supporting new telecommunications services without expensive and time-consuming hardware upgrades. In fact, upgrades via software can enable new capabilities to be unlocked from years to minutes.
Opportunities and Strategies for Software-Defined Satellites
Cloud and SDSs present significant opportunities for satellite and telco operators. ABI Research estimates a US$22 billion revenue potential by 2032 from applications like connected cars, Internet of Things (IoT), and Direct-to-Cellular (D2C) services. Cloud-native technologies, including containerization, microservices, and orchestration platforms like Kubernetes, enable rapid NTN-mobile service deployment across a hybrid infrastructure. Hyperscalers such as Amazon Web Services (AWS) can act as neutral brokers, hosting disparate Application Programmable Interfaces (APIs) to integrate terrestrial and satellite systems.
To capitalize on the SDS opportunity, industry stakeholders should adopt the following strategies:
- Implement cloud-native systems for satellites and ground stations to enable programmability and eliminate silos between telecom and satellite ecosystems.
- Adapt core network and Radio Access Network (RAN) infrastructure to accommodate NTN-mobile services and integrate with satellite gateways.
- Participate in 3GPP and European Space Agency (ESA) standardization projects to ensure SDS networks align with modernization goals and NTN development efforts.
- Collaborate with hyperscalers to integrate NTN-compliant APIs and cloudify ground segments.
- Prioritize high-value use cases like connected cars, the IoT, and drones to drive mass commercialization of SDSs.
Conclusion
SDS networks, built on cloud-based platforms, are driving the next stage of digital transformation in the space and telecommunications industries. These technologies unify satellite and cellular networks, virtualize telco hardware, and accelerate NTN service delivery. By shifting to software-defined network architecture, satellite operators gain much-needed versatility to quickly modify new missions and launch services in demand. For example, an operator can add a new application, service, and market to its network via software. This will be far quicker and more cost-efficient than having to build and launch new satellites in orbit to expand applications.
While there is uncertainty regarding infrastructure upgrades and future standardizations, the US$22 billion market has immense growth potential. Seamless NTN connectivity will enable novel use cases that will support countless business operations (e.g., fleet management, drones, autonomous mobile operations, offshore rigs, connected cars, etc.), improve the quality of life for millions, and even save lives during emergency situations.
If you’re a satellite or telco operator with aspirations to align your network with prevailing trends, refer to ABI Research’s Software-Defined NTN: Architecting the Space Backbone of Unified Networks report. This in-depth analysis identifies progress in SDS development, its benefits, key challenges, potential partners, and the most important technological considerations.
