Drones that deliver packages and provide other services may still be a few years away, but that hasn’t stopped all sorts of companies from getting into the burgeoning market, with Microsoft Corp. (MSFT) just the latest to enter the space.
Microsoft Ventures, the venture capital arm of the Redmond, Wash.-based software giant, led a $26 million venture round in AirMap, a drone startup that is the main maker of software that manages air traffic for drones. According to AirMap, its real-time traffic-management software is used by 80% of all drones around the globe. Other investors that took part in the round of fundraising include Airbus, Qualcomm Inc. (QCOM), Sony, Rakuten and Yuneec, China’s leading drone maker. In a statement to Reuters, Microsoft Ventures said with the investment AirMap can use Microsoft’s software and artificial intelligence tools. The investment also gives Microsoft an entrance into the drone aviation market which is dominated by the likes of Amazon.com Inc. (AMZN) and Alphabet Inc.’s Google (GOOG.)
The move on the part of Microsoft to get into the drone market comes at a time when companies are in a race to become a big player in what is expected to become a huge market opportunity for a slew of industries from delivery companies like United Parcel Service Inc. (UPS) to software makers such as Microsoft. Amazon, a pioneer in drones, sees unmanned aerial aircraft as a perfect way to get packages into the hands of customers who are used to instant gratification. Telecom companies such as AT&T Inc. (T) are also testing drones for things like removing bird nests from hard-to-reach wires. In September, AT&T started using drones to inspect cell towers for any damage and to test its wireless network performance.
Just this week UPS tested a drone that launched from the top of an electric package-delivery car, delivered a package to a customer’s home in Lithia, Fla., and then returned to the vehicle that had continued along a route to make a different delivery. The test was conducted along with Workhorse Group Inc. (WKHS), an Ohio company that makes electric trucks and drones. Workhorse developed the drone and the electric UPS package car that was used in the test. (See also: UPS Successfully Tests Drone to Deliver Package.)
Amazon is also fine-tuning its drone strategy, recently receiving a patent for a method to land its packages safely on the ground with the help of a parachute. According to the patent filing, Amazon’s drones would employ a release force to propel the package downwards once the delivery address is reached. It would be guided on its downward trajectory by the drone through radio, which would enable course corrections. For example, the drone will instruct the package to release a parachute, compressed air canister or landing flap to enable control during windy conditions.