For the traditional GIS companies, the short term prospects for financial viability are not in question.The market leaders are doing quite well, even flourishing for that matter.But the fair question to all of them is whether they are mere ships plying the Sea of Google, which seems to be floating the boats of many traditional geospatial software and data providers, at least for the time being.More specifically, are their business models and existing product suites capable of surviving a more dynamic and evolving market?
What seems to be happening is a struggle for relevance.Where geospatial technology was once the domain of a few major players and their supporting data partners, their public perceptions are under assault from the results of some fantastic data integration and simple visualization tools from the mapping portals behemoths such as the "gang of five": Google, Microsoft, Yahoo, MapQuest and AskJeeves; and the encroachment of systems integrators (SI) such as Northrop Grumman and Lockheed Martin, who are developing tools and consulting practices in geospatial technology.Lest we forget, the major database providers led by Oracle complete the three-headed monster.And this is all happening at near "Internet speed."
In just the time that Google Maps, and its brother in crime, Google Earth, have launched, we've seen a dramatic increase in awareness of geographic information technology.CNN, The New York Times and information technology (IT) publications like Information Week are shining a spotlight on the technology by publishing news stories and articles about maps on phones, maps in cars, the coming boom of local search and the rise of recreational toys that employ GPS.It's all good news, right?
On the Bubble...
A conference on geospatial information for military and intelligence agency applications, GeoINT, provided an interesting data point.First, it's amazing that a conference like that even occurs because of what I would perceive as the highly sensitive nature of the applications discussed.But the conference provided a venue that revealed the jockeying for position by many of the players mentioned above.And sitting quietly in a booth in the back of the exhibit hall was Google. Google should certainly have been there given the background of Keyhole, the company it acquired to launch the foray into mapping technology.Keyhole was a graduate of In-Q-Tel, the CIA's private incubation partner.Google's presence was simply an acknowledgement that the company is a player in this game in more ways than just the "eye-candy" for which some people have perhaps mistakenly tagged them.
What fascinated me at the GeoINT conference was hearing that so many of the systems integrator (SI) companies had established geospatial practices.Perhaps they always had them but not marketed them in such an overt manner in the past.John Olesak, Director of Geospatial Intelligence for Northrop Grumman, shared that the company had over 500 people in its geospatial practice and that open source technology is playing a major part in the corporate strategy.This was not unusual since conversations with Harris, Accenture and BEA revealed similar information.
SI companies that have existing relationships with ESRI et.al.are duty bound to explore the tools that are most effective in terms of cost and ease of use.Applications from Oracle, IBM, SAP or BEA form a greater IT backbone than the traditional GIS software and data companies, and open source is no longer for just for hacks.The SI companies represent a huge footprint within corporate circles and they may tip the balance in the struggle for relevance.
On Disruption in the Market...
Here's the mashup I'm waiting to see: Oracle Spatial and Google Maps. Is it just me or is this a recipe for disruption on a large scale? When the latest CRM applications from Siebel, the human resource applications from PeopleSoft, and Oracle's own large cadre of financial management applications become spatially enabled, what geographic tool for visualization do you think major corporations will think about using? I assure you that more than a few CEOs have already contacted Google.And I assure you that they will either have some of Oracle's tools or perhaps those of IBM, or Microsoft to manage data warehouses.
If you think the struggle for relevance is not now ongoing, it surely will be very soon.The importance of visualizing corporate information, whether by charts or maps, is tantamount to survival to distill too much data in a time window where CEOs or city managers are required to act quickly.In a report issued in June 2005, Ventana Research noted that, "The opportunity for operations executives to expand into new markets and grow new revenue streams requires good business leadership and leverage of information technology like BI (business intelligence) and location technologies."
Google has ushered in something perhaps more important to those looking to acquire the capabilities to incorporate geospatial technology into enterprise systems.It's just simply easier to use.It's easier to visualize how your corporate data could be viewed on a map.It's easier to think that if I have information that looks like it's too complicated for a spreadsheet, maybe I can see it on a map.It's easier to think spatially.
And this is where the Google Phenomenon could begin to affect the financial success of the traditional geospatial companies.The "gang of five" present viable options to companies now looking to develop tools that more employees could use beyond the "silos" of GIS workstations that may be scattered within companies today.Here's the catch...only if the easier to use interface can be leveraged to offer subsequent "push button" analysis.
Consider that MapPoint was an experiment in simplicity.Not many functions, but it focused on the 20% of functionality that was most often used by more robust desktop GIS software.
But whereas macros and canned queries developed for desktop GIS systems were fine in the past, the need now is to see information faster.SRC's mashups of its demographic database with Google and Microsoft application programming interfaces (APIs) are good examples of where the market is trending: Information that is only one mouse click away.
Kim Fennell, CEO of Telcontar, recently described the phenomenon that is changing location technology section aptly by saying, "It is a matter of scale." Where before the market scale was calibrated in terms of a thousand copies of ArcView, it now thinks in terms of 100,000's of copies of MapPoint, a nearly mass market product.Where before we were amazed at the thought of 1 million hits on MapQuest, we now need to think in terms of a billion maps served.And potentially, the opportunity rests in compiling location-based information from tens of billions of location-aware devices from in-vehicle navigation systems to RFID-tagged products to cellular handsets.
As such, companies that need to manage a massive volume of location-based information will look to solutions that can handle the magnitude of requests for queries seeking "where." The answer may not necessarily be the purview of traditional GIS companies and as a result they will not be the first ones sought to solve the problem.It's a dilemma because those traditional GIS companies have some of the best expertise in location technology.However, the scale of these new challenges dwarfs products and services that are currently part of their core competency.
In a report published February 2005, IDC discussed some of the potential problems associated with delivering solutions for larger enterprise applications:
"The enterprise space is unfamiliar territory for ESRI and other geospatial players.Also, the business community is clearly dissatisfied with current IT licensing and distribution practices.These two factors combine to create difficult pricing and licensing issues.The problem is particularly acute for vendors like ESRI that are accustomed to relatively high margins and control of their customer's accounts."
And in a report published just this month (December 2005), IDC again emphasizes a key dependency in market development:
"...the competitive landscape in ELSS (enterprise location services and software) is shaped by established IT infrastructure and enterprise applications vendors.The dominant players are and will continue to be the major IT infrastructure and enterprise application vendors...The potential ELSS user base is orders of magnitude larger than that of GIS and consequently has the potential to become a strong revenue producer.Revenue will be realized from a broadened addressable market for applications, primarily from incremental sales of spatially enabled software and services."
The market requirements are changing; the demand for different answers to larger, more voluminous problems are necessary; the software solutions require performance not sophisticated analysis (yet). Visualization is key, information management scalability essential; and cheap, ubiquitous sensors and delivery platforms (RFID tags, Internet browsers, cell phones, etc.) comprise the infrastructure.The result is a challenge to the relevance of traditional GIS technology providers in an expanding market, sandwiched between dominant enterprise IT infrastructure solutions and mapping portals serving the masses.It's now a matter of scale.