China’s DJI Just Inked A Drone Partnership With One-Time Rival

August 1, 2017, 1:00 PM UTC

The world’s biggest drone manufacturer is teaming up with a one-time rival.

3D Robotics, the Berkeley, Calf.-based drone startup founded by a former editor-in-chief of Wired Magazine, Chris Anderson, said Tuesday that it’s partnering with China-based DJI. As part of the alliance, 3D Robotics, or 3DR, will integrate its drone software into DJI drones for customers in the construction industry.

3DR once specialized in selling consumer drones, but it eventually switched to selling drone software for businesses amid DJI’s rapid rise to the top of the drone making industry.

“They were just amazing,” said Anderson about DJI. “I think we just got beaten fair and square.”

Get Data Sheet, Fortune’s technology newsletter.

DJI’s bigger size—it has thousands of employees versus 3DR’s roughly 70 employees—and rapid development of new drones was difficult for 3DR and others to compete with, Anderson said. When 3DR debuted its Solo drone in 2015 for $1,000, DJI reduced the price of one of its older competing models to $500, making 3DR’s drone a difficult sell, he explained.

Now, 3DR is focusing on selling drone software for the construction industry, similar to how enterprise software companies like Salesforce sell annual or monthly subscriptions to their services. The drones available through DJI or 3DR can be used for things like surveying and photographing construction sites.

In this space, 3DR competes with a handful of drone startups. For example, Kespry partnered with John Deere in March to sell its Kespry’s drones and related software to construction clients. Meanwhile, Airware recently received an investment from Caterpillar (CAT) that also allows for Caterpillar’s customers to buy Airware’s drone services. Anderson points to a partnership between Autodesk (also a 3DR investor) and 3DR that lets 3DR’s drone software work well with Autodesk’s construction management software as a point of distinction.

Although 3DR faced tough competition in the drone market against DJI, Anderson believes that the enterprise software market for drones won’t be as cutthroat and that there is room for multiple competitors.

“In enterprise software, it tends not to be as ‘winner takes all,’” Anderson said.

Read More

Artificial IntelligenceCryptocurrencyMetaverseCybersecurityTech Forward