I have raster DEM and observer points (satellites) both are in the same coordinate system.The observer points are scaled down so that they are not very far away from the raster DEM (say at 500-800 m height). I want to do visbility analysis considering observer points as input and find out which are the locations in the raster surface am able i,e to see whether visible or not.I want to do it in arcgis or any other software
You can put your points on the surface and add a field called OFFSETA (see more details here) to define the height above your DEM for your observer point.
As you probably, GPS satellites are constantly moving, so you will need to repeat the analysis a lot of time. There are online predictors of the PDOP where you can define the angle of visibility for a given position.
In ArcMap, I followed this link to accomplish my task related to viewshed analysis and steps are explained quite efficiently. http://desktop.arcgis.com/en/arcmap/10.3/tools/spatial-analyst-toolbox/using-viewshed-and-observer-points-for-visibility.htm
In addition to it you can follow this youtube link: https://www.youtube.com/watch?v=7FJvpeiy5VQ
If you prefer to do it in an open-source environment, I recommend Viewshed Analysis plugin in QGIS. Link: Viewshed Analysis