Growth Strategies for the Corporate GIS Market

By David Goldstein

Why Has not Business Adopted GIS? -- A Strategic Review

EDITOR'S NOTE: This is the third of a three-part series on GIS addressing the complex issue of why the business world has not embraced this powerful software's functionality and what needs to be done to maintain and ultimately increase its market share.Author David Goldstein is president of CMC International, a Dallas, Texas consulting organization that has been helping businesses address their fundamental obstacles to growth, finding better value for their money and cutting costs to maximize return. Specialists in business intelligence, strategy, growth, and planning, CMC International has implemented GIS into their winning programs since 1988. Read Part 1 and Part II.

We have devoted the last two articles to discussions surrounding the shortfalls of GIS and how it has affected the adoption rate among mainstream business.It is not good business to analyze the problem without offering any solutions, so here is where we do that.

Part Three
Growth Strategies for the Corporate GIS Market

Businesses have four main growth options:

  • Growth in physical size, as in number of locations,
  • Growth in market share, through merger or acquisitions,
  • Growth in sales, by selling existing customers more stuff, and,
  • Growth in customers, by finding more good customers.
There are no out of the box GIS applications available that are turnkey and easy to use that address business growth.Business needs clear applications to help them achieve those growth goals.

The true weakness of the GIS industry is that it has been driven by technology and not customers' needs.It fails to acknowledge that better than 80% of the functionality in today's GIS software will never be used in business applications and consequently falls short of creating manageable and affordable products for mainstream business -- affordable where you do not need a rocket scientist to run them.

GIS is perfect for the front end to an EIS (Executive Information System), but it still needs realistic integration capabilities.As it stands now, every application has to be custom developed.A national sales manager should be able to view daily sales visually by color or shading in relation to performance.He or she should be able to do so at a click of a button and be able to drill down to find out the contributing factors to why performance was such - they do not want to wait 3 hours to print out a set of custom maps.Applications need to be actionable to where a business can take the information and decide how it can grow in size, sales, and profits.

In order to increase market share, the GIS community needs to lead and not follow in the development of useful & functional business applications. They are still creating products with an eye for government and environmental use and not to solve the problems that keep mainstream business executives awake at night.Consider that the base cost of roughly $1500 to buy a desktop GIS software package (with no data) is about equal to what or more than most companies spend for an entire desktop software system for a typical employee.That is not realistic for most large organizations in today's world.

The GIS industry is always looking for a way in the door, but never for the way up the ladder.The industry is still driven from bottom up, and slowly.They need to leave their comfort zone and create and leverage leaders in Corporate America.Begin to focus on the top down by listening and catering to the needs of CEO, CIO, CFO, VP's etc., and build business applications to suit their needs.Communicate the benefits of the product with targeted testimonials and case studies highlighting real business solutions built on GIS.The C-level and VP level executives will begin to ask what this "new" product is and how they can utilize it within their own organization.

There are a number of companies out there making software and data products for business, but if they cannot give business the product that they want --that does what they want, when they want it, not to mention how they want it, and make it easy to use and affordable, someone will.Sounds like a large request, but there is a company out there quite adept at doing so.Namely, Microsoft.Microsoft is going to corner this market with simple products that give business the answers they want.They may not be as good as current GIS platforms, but they will be commonly accepted, priced reasonably, and easy to learn.

It will happen sooner than you think as the writing is on the wall. Microsoft has already acquired Vicinity and developed Mappoint - there are two business applications that they have made affordable.Microsoft will drive the price for simple applications that solve business problems to new low levels.It is a shame that it will have to come to that before GIS gets their much-needed wake-up call.Government and a lot specialty applications are willing to spend as much as hundreds of thousands of dollars on GIS, but America's business community fails to see the value at that price.If business saw that same value, it would have bought it already and I would not have written this article, but its not.

Microsoft will turn it all on its ear.They realize the power behind adaptable geographic information and it is application to existing business practice.My prediction is that many GIS companies are going to consolidate or go away, many new companies will be formed and will embrace the changing marketplace, but ultimately Microsoft is going to get the attention of the leaders of the business world.

It is not a new strategy from Microsoft as it is apparent in many other industries already.Their modus operendi is market share domination.Take for example in the server or networking world; Microsoft has shadowed Novell, and other business applications such as Lotus 123, WordPerfect.It could happen in the GIS world as well.

So as I wrap up rantings about the problems with GIS in three consecutive issues of Directions Magazine, it is not to say that we haven't been successful building a business around it.My company has and continues to have long-term relationships with clients who benefit from our extensive GIS expertise. We develop applications that fit their needs and requirements, and we can recommend ways to reduce their expenses and maximize investment return. We also operate as a reseller or almost like a broker by representing and combining software solutions to achieve client objectives and reduce costs.

CMC is one of a select few of one-stop shops of this type in the industry.
Liken it to an insurance agency where your agent helps you pick the best policies form various insurance companies for your budget and that is what we do with GIS for our clients.We represent the entirety of GIS vendors and business applications built on it, and the clients can pick what is best suited for their needs.By doing so, we have saved our clients more than $100,000 per year in software and data product costs and by having them outsource their more complex GIS jobs to us.

Our clients are different from the so-called GIS norm.Corporations want one resource for all of its business intelligence needs.Businesses wants the expertise and benefit of one-stop shopping, volume discounts and economies of scale that resellers can provide, and yet, It strikes me as peculiar that every GIS vendor wants to sell GIS products direct to corporate end users.

It is no wonder, the GIS industry is guarding the profit margin's and has no interest in sharing by offering reseller incentives - unfortunately at the risk of stagnant market share.The GIS industry is under the errant impression that they provide a complete solution for their customers, but if they would only realize that is where resellers excel.Resellers are able to form those intimate relationships with their business clients. They can support a wide range of products and services for their clients, which suit their needs and ultimately increase usage levels of the product. Any one GIS vendor cannot possibly be all things to all customers, yet they feel that is what they have achieved by creating this monstrous offering - and want to be paid dearly for it.

In conclusion, if the GIS industry does not want to be squeezed out by the Microsofts of the world, it is time to lead rather than follow. Realize that business is very different today than the naive world they have been living in and adapt by developing products and applications that respond to the needs of today's business world.

If you have comments or questions for author David Goldstein, please direct them to .(JavaScript must be enabled to view this email address)

Published Saturday, April 19th, 2003

Written by David Goldstein

If you liked this article subscribe to our bimonthly newsletter...stay informed on the latest geospatial technology

Sign up

© 2017 Directions Media. All Rights Reserved.