Location-based Services - An ESRI Perspective with Jonathan Spinney

Over the past few years, we have reported on Location-based Services, the hype of the early days, the transition and subsequent shakeout among companies vying for the market.There have been companies focused solely on position determination and those that can process the location of people or objects that are sending their position from wireless devices. Companies in GIS have been in the category of processing location and creating mapping software for different mobile device form factors.In this interview, Editor-in-Chief, Joe Francica speaks with Jonathan Spinney, Industry Manager for Location-based Services at ESRI.Here is that interview:

Joe Francica (JF): Where do you believe ESRI is differentiating itself with its current suite of LBS solutions from competitors like MapInfo and Intergraph for "end-user" mobile applications in the existing GIS market.

Jonathan Spinney (JS): ESRI offers several products to our users and developers for mobile solutions development.

ESRI offers a hosted web service for building web-based and mobile applications. ArcWeb for Developers is an ESRI-hosted SOAP/XML web service that allows mass-market, enterprise, or government developers to imbed mapping, routing, geocoding, geoprocessing, and points of interest into their web and mobile applications.
ESRI also offers the ArcIMS with the Route Server extension. Together these products provide the same geoprocessing functionality as ArcWeb for Developers, but are licensed as commercial software products. Any application developer can purchase ArcIMS, RouteServer, the spatial data to power it, and build the application on top of their own network of computing resources. This option allows users to build their own web services hosted on their premises. ArcWeb for Developers and ArcIMS are both built on open standards, and both are portable and extensible to accommodate high-volume transaction traffic and usage growth.
ESRI offers ArcPad and the ArcPad Application Builder for CE developers. Off the shelf, ArcPad is a lightweight, yet fully robust mobile GIS. For location-based applications that simply display retrieved results, ArcPad is sometimes too powerful. With the new Application Builder extension, developers can strip down and customize the functionality of ArcPad. This allows enterprise developers to build custom, department specific applications for the field force. ArcPad operates in standalone mode, or it can easily consume web services hosted by ESRI, or web services built by an organization with ArcIMS and RouteServer.

JF: Where do you believe ESRI is differentiating itself from middleware providers such as Telcontar and Kivera?

JS: Several vendors have implemented their GIS engines into commercially available application servers for performance reasons. I see the application server as middleware. Performance and speed are critical for applications that may potentially process millions of geo-transactions. ESRI continually invests R&D in improving our software to meet the performance requirements and expectations of our users and developer community. With the upcoming release of ArcGIS Server scheduled for 3Q03, ESRI will provide developers with core objects that they can use to deploy inside .NET or J2EE application servers.

JF: Will ESRI focus on their existing base of customers in government and business rather than consumer location services? Which has greater potential in the short-term?

JS: Yes. ESRI will continue to focus on our existing customers in Business, Emergency Services, Government, Homeland Security, Transportation, and Utilities. However, that's not to say our technology can't be used by mass-market developers as well. In the short term, the enterprise and government supergroup horizontals represent the immediate revenue generating potential for ESRI.

JF: 4.Is there a market developing for the integration of dynamic, "real-time" location data (e.g.weather, traffic) and who are the immediate buyers? Government? Businesses? Consumers?

JS: Sure. One of the things that make a location-based application valuable is the ability to exploit location as a means to communicate dynamic conditions through a geographical context. It's all about equipping mobile users with knowledge so that they can better try to decide and subsequently act on the unpredictable. By providing users with access to dynamic information, users are able to make better decisions faster, and it helps them communicate more effectively. I think commodity data like traffic and weather is good for everyone. All you have to do is turn on your TV every morning to see how important traffic and weather are - there are reports every 5 minutes. I also think other dynamic event data unique to an organizations' operations are equally important for location-based applications.

JF: Please give an example of how your ArcLocation Solutions (Spatial Server, Connector, etc.) combine to create a mobile solution for a typical customer (cite existing customer if possible)

JS: ArcLocation Solutions is one of ESRI's solutions positioned for the LBS market. It consists of multi-lingual J2ME applications that run on Java enabled phones, Palm OS devices, RIM, Symbian, and any other handheld device that has a Java Virtual Machine (JVM) installed in it. There is also a Mobile Toolkit available to build custom J2ME applications that consume our SOAP/XML web services through service chaining proxies.The Connector is the servlet that handles the service chaining, and it translates our SOAP services to OpenLS.

Mass-market, Enterprise, or Government mobile application developers can use the Mobile Toolkit to build terminal resident J2ME applications that directly consume ESRI-hosted web services. The application can be downloaded over-the-air, or hot synched at the desktop.

JF: How is Spatial Server licensed? Will this be per transaction or do you offer a block transaction fee?

JS: Both. ESRI licenses web services on a per transaction basis for high volume, and block transactions for low volume. For instance, 100K transactions equal one transaction block. One block costs $1,250 USD. We also add high volume discounts to the pricing scheme as usage increases. The higher the volume, the less expensive it becomes. Our pricing is competitive, and our licensing scheme is set up to accommodate revenue share models.

JF: What market catalysts are needed for real-time, dynamic location information to become a viable product that either government, business or consumers will purchase? Broadband? Ubiquitous Wi-Fi? Handset devices that are location-aware? Government FCC mandates for 911 compliance? 511 Traveler assistance?

JS: The main issue thwarting LBS' growth is that most carriers have not opened up their networks for the average GIS application developer. Access to location is still the major issue hurting development and thus adoption. Few carriers have collaborated with enterprises and governments to offer location as a commodity. Instead, many carriers have launched their own generic applications in an attempt to get mass-market, enterprise, and government users to subscribe. This approach ensures that carriers have complete control over who uses their network, but it is a closed system. It does not encourage uptake and usage unless marketed accordingly. To date, I have seen very little marketing of LBS on behalf of carriers. I think that carriers are better off leasing or wholesaling location to anyone. Nextel, for example, is the only U.S.carrier to offer an open GPS API to J2ME developers. This offering builds on the open source philosophy and it does not require the application developer to strike a special deal with the carrier for location. The GPS API allows developers to turn their device into a GPS receiver, and from there, the developer can do whatever they want with J2ME. In the UK, Orange and mm02 sell location on a per transaction basis to any GIS developer that has permission to obtain a subscribers location.I do not think we will see LBS meet its self-imposed expectations, unless all carriers make location readily available through lease or wholesale pricing schemes to all GIS developers.

JF: Has the LBS market shaken off the problems associated with the overhype it experienced in 2001-2002 and have wireless carriers started looking at which location services products will be most marketable?

JS: Yes on both accounts. The proverbial hype is over. I think one of the problems we had early on was that some in the wireless world had little previous exposure to location and GIS concepts. The GIS community has learned over years what applications work, and what industries have use for spatial technologies. I think this was difficult for some in the wireless world to learn. Also, in the beginning, nearly everyone concentrated on applications closer to Telecom, which they understood well. Applications like e911, location-based 411, location-based messaging or friend finding, etc., were deployed in the hopes that everyone would come running. These apps cannot do it all, do not encompass everything, and do not meet the requirements of individual enterprises or governments. I think the LBS community realizes this in retrospect, and most have broadened their horizons to offer enabling technologies to developers and end users who have unique business mobility problems that location can help solve.

JF: Where will we be in 2005 in the LBS market?

JS: I will just say that I hope we are better off than we are now. Enterprises and governments are poised to make great things happen if we can solve the location availability problem, as well as the carrier business model issues.