Between Home Depot and Wal-Mart in Cockeysville, in an unassuming collection of industrial buildings off York Road, Textron Systems assembles the Shadow unmanned aerial vehicle.
Commonly called a drone, the Shadow recently logged its 1 millionth flight hour, a milestone the company celebrated with a party last week for its employees.
Nearly 85 percent of those hours came during combat operations with the company's U.S. and international military clients, primarily in support of U.S. operations in Iraq and Afghanistan, where it's used for reconnaissance, target acquisition and assessing damage.
While Textron recently secured a $116.5 million contract for 24 more Shadows for the U.S. Army, the company also is renewing a push into the burgeoning market for commercial drones as military spending ebbs. Company leaders expect commercial contracts to become a fast-growing division, eventually making up about half its drone business.
"There is just a ton of excitement around drones around the world," said Bill Irby, senior vice president and general manager of Textron Systems Unmanned Systems, which designs and builds Textron's drones.
Textron has made a commercial drone for years called the Aerosonde, used by customers for reconaissance and meteorology, but the market stands ready to grow as the U.S. market opens up under new regulations from the Federal Aviation Administration.
With a wide variety of possible applications, the commercial drone market is projected to expand to more than $2 billion by 2023, according to a market analysis by Global Market Insights Inc. released in July after the FAA finalized rules to better define flying rules.
"There's a recognition that this area is going to grow extremely rapidly, and companies are trying to get in early," said Philip Finnegan, director of corporate analysis for the Teal Group Corp., an aerospace and defense analysis firm in Virginia. "You have a lot of venture capital investment and startups — it's an extremely dynamic time."
The competition in this emerging market will be fierce between such start-ups and larger companies, including defense contractors like Textron, that have been in the drone business for years.
Doing business in the commercial market may jolt some defense contractors accustomed to the government's slower, more exacting pace.
Compared to its military work, the commercial development process "moves at the speed of light," Irby said.
While Textron may spend months fine-tuning one aspect of a project for a defense client, commercial customers want to see their products when they walk in the door.
To rise to the challenge, Textron has brought in workers from other offices with experience working for commercial clients.
Textron Systems employs 1,500 people at its Cockeysville facility, once operated by AAI Corp., which Providence, R.I.-based Textron Inc. acquired in 2007. Textron is a manufacturing conglomerate with more than $13 billion in sales last year that also makes Bell helicopters, Cessna and Beechcraft airplanes and E-Z-Go golf carts.
There are other differences between the government contracting and commercial markets that companies looking to straddle the two need to consider, analysts said.
Government clients know exactly what they want and hire companies like Textron to make it. They value performance and precision above all else, and are willing to pay for expensive upgrades, Finnegan said. Commercial clients may be more cost-conscious, he said.
To succeed in the commercial market, drone makers need to identify problems that can be solved with drone technology and then develop the solution before someone else does, said Tim Oates, a professor of computer science and electrical engineering at University of Maryland, Baltimore County.
The commercial possibilities for drones seem endless.
Drones could conduct maintenance checks on oil pipelines, which could be a less time-consuming alternatives to manual checks conducted by walking or driving along the pipeline's route. Utilities could use drones to check on power lines and ensure birds aren't setting up nests in dangerous places. Real estate companies could use drones to snap 360-degree views of buildings.
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Amazon is testing drones to deliver online orders, and even pizza might someday be dropped on doorsteps.
Textron has found a niche in agriculture. The company landed a contract last year to use sensors attached to a drone to survey crops for farmers in the United States. While the company offered few details about the customer, it said the technology can tell which crops are healthiest, when they need to be watered and whether pesticides appear to be working — all information that improves efficiency in crop management.
The FAA released regulations in June for flying drones under 55 pounds in the U.S., ending uncertainty about how and where such drones could be used legally that limited their use in the past.
With these new guidelines, analysts expect development of drone technology to pick up in the years ahead.
"The thing about technology is you never know where it's going to go," Oates said. "There are going to be really exciting applications of drone technology that we're only vaguely aware of now. The industry is still at that stage that someone could have a really interesting idea and make an impact."