Cambashi is a market research, industry analyst and consulting firm that covers the use of IT to address business issues in a variety of industry sectors. The company shared with Directions Magazinea few details from its latest GIS Observatory reports, typically only available to subscribers.Weposed some questions to Christine Easterfield, principal analyst, about the latest round of numbers and what’s ahead.
Directions Magazine (DM): The latest research from Cambashi indicates worldwide spending on geospatial software grew 4% to 2.64 billion USD in 2012. How does that growth compare to growth for the previous year? How do you explain the change?
Figure 1: Top Seven Global GIS Providers - 2013 Worldwide Revenue Breakdown
Christine Easterfield (CE): The previous year (2011)’s growth was actually in double digits but that is influenced by two key factors: 2011 was the first year of visible recovery from the 2008/9 financial crisis in this research and so the climb was from a low base, and activity in GIS-heavy industries was particularly strong – consider investments in infrastructure and utilities/telecoms as governments spent their way out of recession. Over the longer term, our research shows the average annual growth among vendors is around 6%.
DM: Cambashi's research covers technical applications software used in manufacturing, architecture, engineering and construction and geospatial applications. GIS amounts to approximately 17% of the total technical applications spend. Is that percentage rising or falling since the last research period? Are GIS software seats more or less expensive than average for those in other areas? Are there more or fewer seats in use on average than in those other areas?
CE: For the last few years (back to 2010), geospatial technology spending has remained fairly static at around 17%, shifting up or down less than 1% as a proportion of technical applications spending. Note that these software segments are not necessarily competing for the same dollar, nor the same user base. Technical applications include CAD/CAM/PLM and others which are more likely used in design and build projects. GIS has overlaps in some design phases but is also maintained for the operations phase of a facility or network. As building information modeling (BIM) becomes more widely used and the extent of the developments covered grows to need geospatial tools, then this separation will become more blurred. We already see this in the “smart city” initiatives.
DM: The Americas account for 48% of the global spend on geospatial software, estimated to grow to $1.6B by 2016, a compound annual growth rate(CAGR) of 4% since 2012. Government investment in infrastructure and a focus on homeland security were cited as contributing factors in the U.S. Will U.S. government budget tightening and the shutdown in 2013 keep growth numbers that low for 2013 and 2014?
CE: Our figures do show a low, but positive, growth factor for GIS in the Americas over the next few years. Tightening government budgets will have some effect, but economic recovery forecasts indicate other, non-government sources will grow – examples range from large scale water-use planning projects to more automation in farming and construction.
DM: The GIS market in Asia Pacific grew 11%, with China at 23%, and Southeast Asia at 9%. Is this growth still attributable to a building boom and the growth of related infrastructure in those areas?
CE: Certainly the dominant industries using GIS continue to have strong growth across the Asia Pacific region. Admittedly the growth in infrastructure in China appears to be somewhat artificial and we expect a falloff in the rate of growth. However, in the rest of the region the increase in infrastructure – whether reinforcement of existing facilities or new projects – is driving much of this growth. For example, there is still a shortfall in energy provision, with the Asian Development Bank reports showing around 18% of the population of the region without access to electricity.
DM: European growth has been steady, but Cambashi warns it’s likely to stay positive but slow in 2013 and 2014. Why?
CE: European markets are still cautious. The overall growth in EMEA is still held back by the slower recovery of Spain, Portugal and Greece, although some of the central and eastern European countries, for example Russia and Turkey, are likely to be close to double-digit growth.
DM: Cambashi notes areas for expansion of geospatial software via BIM and perhaps geodesign. How will Cambashi tease out software products that straddle the line between design and mapping in upcoming research?
CE: This is a challenge for anyone dealing with market sizing. The taxonomy behind our research guides which product contributes to which market segment. [See Easterfield’s article on the topic from 2013.] We classify product lines according to the tasks and workflows that they are most used to address. In this way, the current distinction between, say, geospatial tools and architectural design tools is easy to maintain. As the disciplines merge – if indeed that is what happens – we may need to define a new classification to accommodate genuinely hybrid tools.