Global GIS and Geospatial Market Growth Slows, Recovery Expected in 2010

Cambridge, Mass., August 19, 2009 — A new market analysis from Daratech, Inc., a Cambridge-based research firm specializing in GIS and geospatial industries, projects a significant deceleration in worldwide growth for 2009. After expanding by 17.4% in 2007 and 11% in 2008, the industry is expected to increase by only 1% this year.

Despite this downturn, chief executives interviewed for the study expressed confidence that the stronger compound annual growth rate (CAGR) of approximately 11% observed over the previous six years would resume in 2010.

Regional Performance: North America Shows Relative Resilience

According to Daratech’s findings, North America has been less affected by the economic slowdown compared to other regions. Continued public sector investment and sustained homeland security initiatives have helped cushion the impact. Growth in North America is projected to exceed 2.1% in 2009 — more than double the anticipated rate in the Asia-Pacific region and roughly five times the expected growth in Europe.

European markets have been more severely impacted, with several governments reducing spending on geospatial technologies in response to declining tax revenues. These budget constraints have led to sharper cutbacks in GIS procurement across the region.

Public vs. Private Sector Dynamics

The most pronounced contraction in 2009 is occurring within the private sector. Daratech forecasts private-sector GIS revenues to decline 0.7% year over year, settling at approximately $1.4 billion. This trend mirrors broader hesitancy among private enterprises to undertake major new investments in information technology during economic uncertainty.

Conversely, the public sector continues to expand its use of GIS technologies. Revenues in this segment are expected to grow by 4.1% to nearly $957 million in 2009. Government agencies are maintaining or increasing deployment of geospatial solutions across service domains, reinforcing the sector’s relative stability.

Market Leadership in the Traditional GIS Segment

Within the traditional GIS software category, ESRI maintains a commanding presence. Daratech estimates the company’s market share at 30% in 2009, up from 29% the previous year. Under the leadership of its president, Jack Dangermond, ESRI has long influenced the technological direction and philosophy of the GIS industry and is expected to continue shaping the market.

Intergraph ranks second in the traditional segment, with a projected 16% share in 2009, up from 15% in 2008. The company is increasingly aligning its operations around a GIS-centric model and strengthening its role as a GIS service provider.

GE Energy holds the third position in the traditional segment and remains the market leader in the utilities domain, where it is projected to control a 24% share.

Broader Geospatial Market: Data, Engineering, GPS, and Remote Sensing

In the wider GIS/geospatial market — encompassing data services, geo-enabled engineering, GPS technologies, photogrammetry, and remote sensing — MDA leads with a 21.8% share. The company’s core strengths lie in imaging, geological services, weather analytics, and defense-related geospatial engineering, with a strong concentration of sales in homeland security and defense sectors.

ESRI ranks second in this broader market with a 15.7% share. Bentley Systems occupies third position overall and dominates the GIS/geospatial architecture, engineering, and construction (AEC) segment with a 42.1% share. Bentley has played a significant role in advancing geo-enabled engineering applications and continues to demonstrate leadership in this niche.

However, Daratech notes that competition in the geo-enabled engineering market is likely to intensify. Autodesk, Intergraph, and ESRI are expected to increase pressure on Bentley as this segment may experience above-average growth compared to other areas of the geospatial industry.

Study Overview and Availability

Daratech’s newly released report, GIS/Geospatial Markets & Opportunities, contains more than 1,500 charts analyzing both public and private market segments from 2004 through 2009. The study is available for purchase through Daratech’s website.

All charts and graphical materials included in the report are copyrighted by Daratech, Inc. Reproduction in news publications, trade newsletters, or magazines requires written authorization from the company. For additional information, interested parties are advised to contact Ruth Murphy.