Who is Geospatial?

It used to be relatively easy to compartmentalize what GIS was and who were the major players in the industry. It’s not so easy any longer.

Take a look at the following graphic published in a market research abstract from Daratech, Inc., a firm from Cambridge, Massachusetts. When one thinks of traditional GIS software providers, this list covers the major ones. As you would surmise, ESRI is the top dog for pure-play GIS software sales.

Intergraph #2? Naaaah. I don’t believe it. Last decade, Intergraph was trying to compete with ESRI in the pure-play GIS software business. But in 2000 Intergraph made a major strategic shift. It bailed out of the hardware business (thanks, in part, to litigation with Intel) and then began focusing on providing software and consulting for vertical markets. Next, after years of being a publicly traded company, Intergraph was “taken private” by Hellman & Friedman LLC, Texas Pacific Group and JMI Equity. In 2010, it nearly reach $1B in revenue, the same revenue number it reached in 1990, 20 years earlier. It’s impressive considering the company significantly shifted its focus and exited the hardware business. But, the company isn’t a factor in the pure-play GIS software business any longer. It’s tough to try to compare it to ESRI, Smallworld, MapInfo, and even Autodesk.

Smallworld (GE Energy), Bentley, MapInfo (PB), and Autodesk offer pure-play GIS software. While the Daratech reports that ESRI has about 30 percent of the GIS software market, it’s a lot higher than that thanks to a grassroots distribution channel that reaches nearly every corner of the globe.

One of the more interesting thoughts in looking at the list of GIS software vendors above is the GIS vs. CAD approach. Clearly, Autodesk, Intergraph, and Bentley design their software from the CAD perspective while ESRI, Smallworld, and MapInfo design their software from the world of GIS. With that in mind, it’s natural that when these companies think about expansion, the GIS-centric suppliers to want to invade the CAD market and for CAD-centric suppliers to want to invade the GIS market. This battle has been going on for many years with no company having the ability to become a dominant player in both CAD and GIS. This is not for lack of trying. Autodesk, who in my opinion is in the best position to invade the GIS space given its worldwide presence and heavy penetration in the AEC (architectural, engineering, construction) market, has plowed a ton of resource into their GIS offerings, it seems to have reached a plateau in terms of market share.

Anyway, I digress. On to the next Daratech chart. The following graphic, according to Daratech, encompasses a larger “umbrella” than just GIS to include “data, geo-enabled engineering, GPS, photogrammetry, and remote sensing.”

After viewing this chart, my first thought was “Where’s Google, GeoEye/Spot Image/DigitalGlobe/RapidEye?” My intention is not to criticize Daratech, but to ask the question “Who is geospatial?” The answer is not clear.

Whereas GIS is and will continue to be a highly technical profession in which the geospatial infrastructure is based, geospatial data and services are weaving their way into the lives of the consumer. Obviously, Mapquest/Google Earth/Bing Maps/Yahoo Maps paved the way and then were followed by GPS navigators. However, what will dwarf the MDAs, ESRIs, Autodesks, and Intergraphs of the world are when the wireless service providers (think mobile phones) really kick it in gear. Some already have. A company called TeleNav writes navigation software for mobile phones. TeleNav’s product is what Sprint sells to their customers for GPS navigation on their mobile phones for $10/month. Even in these dire economic times, TeleNav filed for an Initial Public Offering (IPO) last month. They are growing like crazy…~700 employees. Are they a geospatial services company? I think so. The Verizon VZ Navigator application written by Networks In Motion Inc. (NIM) boasts millions of paying subscribers. Let’s see….$10/month * 5 million subscribers = REAL MONEY. Not surprisingly, NIM was acquired just last week by TeleCommunication Systems for US$170M.

Navigation applications are just the tip of the iceberg for mobile phone users. There is a ton of software development going on in the social networking arena, which is under the LBS (location-based services) umbrella. Social networking applications are going to be huge. Look at Loopt. Their application is available on AT&T, Sprint, Verizon, Metro PCS, T-Mobile, and Boost for $4/month. ABI Research estimates that the value of location-based social network companies like Loopt will be $3.3B by 2013.

Of course, one can already see the writing on the wall. The $10/month price for a navigation application or $4/month for a social networking application won’t remain that high. As competition heats up, the giveaways and bundling will begin. That’s when the volume will really crank up into the hundreds of millions of users.

Now,  I’m even confusing myself. Who is geospatial?