One-on-One with Jack Dangermond

By Joe Francica

"My own view is that it's just beginning." These were Jack Dangermond's (president and founder of ESRI) words to me when I asked about whether he believed the growth that both ESRI had experienced in the last year, as well as some other companies, was sustainable.Year over year, ESRI has reported 22% growth.[Autodesk just recently report 27% growth in their GIS business]. Mr.Dangermond said ESRI is experiencing similar growth already in this fiscal year.In view of the current IT implosion, this is remarkable.

The reason Mr.Dangermond can profess to this view is that he has seen, in his customer base, a profound adoption of spatial information as a key business driver.He has seen it in companies such as Sears, Schindler Elevator, and General Motors.He has seen it become more deeply entrenched in military organizations in the well as around the world.More specifically, it is not just specialized GIS applications in which there is or will be growth, but in the implementation of enterprise management workflows that encompass multi-departmental functions.

And speaking of business, why did ESRI purchase CACI Marketing? "We're making a serious commitment to this market." The market to which he is referring is the business sector of GIS, typically called business geographics.Mr.Dangermond believes that many of the applications for which businesses have used GIS over the years has been rudimentary.[In fact, the just released Volume Two of ESRI's "GIS means Business" differs little in the depth to which companies analyze spatial data compared to Volume One.]

The acquisition will allow ESRI to proliferate solutions, not just product; plus data plus services.But as Mr.Dangermond will tell you, he already derives significant amount of revenue from businesses and believes the new Business Information Solutions (BIS) unit will allow the company to further enhance his position with not only existing ESRI customers but also established BIS clients.Mr.Dangermond went on to say that, "we're making an investment into that organization (BIS) so that they increase their ability to produce science-based segmentation ahead of the market.I think there is a huge opportunity for doing GI-science in business.I would not be going after the market this aggressively if I did not believe that."

So, does ESRI view Microsoft as a competitor, even though MapPoint clearly competes with BusinessMap? "I don't.I see them as a strong synergistic ally that will help us grow the GIS market...and that is providing interoperable web services for geographic data.They are also one of our large software customers...huge users of ArcInfo."

And it will be with the help of partners that ESRI will attempt to grow its business.Partners such as SAP, SAS, and PeopleSoft will introduce spatial analysis to more types of business entities and help them to further maximize the return on information."By increasing efficiency, you make them more successful; if you make them more successful, you make them more sustainable.If they are more sustainable, it drives the economy," said Dangermond.

We ended our conversation by focusing on the specific cost benefit solutions.Mr.Dangermond rhetorically asked, "so, where's the big bucks; whereas the big efficiency? Peter Drucker said the next big wave of efficiency will come in logistics." When you view the many applications in transportation delivery, field force support, and call center management and dispatch, these are applications that ESRI has already delivered and will continue to provide cost saving solutions.

Published Thursday, July 11th, 2002

Written by Joe Francica

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