Geospatial Workflows - Redefining Industry ecosystem

Geospatial World | May 201326

Cover Story | Th e Geospatial Ecosystem

From being a highly compartmentalised industry, geospatial technology has evolved

with convergence, collaboration, and integration of constituent technologies as its

cornerstone. This facilitated end-to-end geo-enabled workflows across several vertical

industries, triggering a series of acquisitions within geospatial industry, leading to its

reorganisation. This cover story takes a peek into the dynamics of leading geospatial

players in enabling productisation of solutions. Read on to know more..

Redefining Industry EcosystemGeospatial Workfl owsGeospatial Workfl ows

Courtesy: www.jeff reywooden.org

Cover story _sk_may.indd 26Cover story _sk_may.indd 26 5/7/2013 7:45:17 PM5/7/2013 7:45:17 PM

27Geospatial World | May 2013

Geospatial industry, which has sev-eral specialised technologies under its umbrella, has evolved through a collaborative process over the past

two decades. It has been built on scientifi c disciplines like geodesy, earth observation, photogrammetry, cartography, positioning and surveying. Th e industrialisation process in the above disciplines has enabled the application of this technology in almost every human activity; empowered every business process; enhanced productivity, effi ciency, cost eff ectiveness, and value proposition of resources. I may seem to have gone overboard, but not, if one views this industry holistically and defi nes its ecosystem appropriately. Any ecosystem needs constant re-defi nition as it evolves along with its stakeholders. And this is more often true about young industries like ‘geospatial’, which has expanded by converging/integrating with several estab-lished industries in the last decade.

A fragmented view of the geospatial indus-try by the so-called stakeholders initially made it a non-saleable story. Compartmentalisa-tion of the industry made it diffi cult to project the economic value of geospatial technol-ogy to businesses in particular and to the society at large. Further, soft adoption of the term ‘geospatial’ by many of its constituents without putting together the jigsaw, increased the communication gap amongst high-level decision makers associated with political, administrative and business spheres.

While advocating for a policy reform, I was asked by a senior policymaker, “What do you expect me to do for geospatial industry, which is just $3 billion globally?” In fact he went on to ask if there was a geospatial industry at all? He was referring to a market research report which pegged geospatial industry at $3 billion. Actually, the report had projections for just one constituent of the industry, which made him feel that geospatial isn’t something that needed his attention. So, my fi rst job was to educate the policymaker about the geospatial ecosystem and project a holistic view of our $100-billion

industry and highlight that it was one amongst few industries with a global annual growth rate of 10-15%. More than the $100 billion, the growth rate caught his attention. Th is is not just the case with policy makers; several lead-ers representing important stakeholder groups of geospatial industry do not have the holistic picture or understanding of the entire geospa-tial ecosystem. During my interactions with industry executives in the last two years, I have come across a high degree of compartmental-ising outlook and it has been a daunting task to educate the leadership about the convergence, enablement, collaboration and integration of the constituent technologies which lead to end-to-end geo-enabled workfl ows across several industries.

Having talked about integration, I do recognise the business value in developing the niche markets, which facilitate innovation, customisation and appropriate utilisation of geospatial technology for specifi c markets. What is probably required is representation of the geospatial ecosystem and positioning of the whole along with its constituents to ensure better demonstration of its value proposition.

Before attempting to (re)defi ne geospatial industry ecosystem, it is im-portant to have a quick look at the emerg-ing trends and directions. Stated simply, ‘geospatial encompasses in itself anything and everything that is geo-referenced and spatial in its characteristic and content’ and ‘geospatial industry constitutes everyone and everything associated with the science, technology and application of geospatial data’.

Trends and directions» Convergence and integration: Convergence and integration can be considered the key drivers, expanding the horizons and extending the utility of geospatial technology across diff erent industries. Economic reforms and end of the Cold War added new dimensions to the business of technology, making them open, connected, collaborative and integrated. An open society with a level-playing fi eld

“

Geospatial industry will

eventually move from being

a horizontal industry to a

vertical one focused on

certain industry applications

Ola Rollen, CEO, Hexagon Group

“

Eventually, every piece of data

and enterprise solution for

any industry is going to involve

geospatial components,

enabling transformation

of business processes of these

enterprises

Steven Berglund, President & CEO,

Trimble Navigation


28 Geospatial World | May 2013


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enabled entrepreneurs to experiment and create innovative, multi-disciplinary products. Arup Dasgupta, Managing Editor of Geospatial World Magazine argues, “We need to move away from compartmentalisation and consider all these technologies as part of geospatial eco-system which need to be used in an integral manner to create solutions.” Advancements not only allowed convergence within the geospatial family, but also facilitated its integration with technologies like the Internet, telecommunications, engineering, machine control and enterprise resource planning. K.K. Singh, Chairman of Rolta Group, says, “Increasing integration of geospatial technol-ogy with enterprise information and com-munication technologies will see the advent of ‘geospatial web’ in the coming years”.

» Solution-centric approach: Convergence and integration paved the way for solution-centric approach, allowing technology companies to work in close collaboration with end-users, directly or through solution part-ners. Th is made businesses look at geospatial technology as an enabling tool, laying the road for greater collaboration between technology developers and users. Th is further facilitated feedback from users in product development. Says Greg Bentley, CEO, Bentley Systems, “Geospatial technology is not an end in itself, but the means to an end. Th e end here is to improve our planet and the quality of life for billions of people around the world.” Voic-ing similar sentiments, Bryn Fosburgh, Vice President, Trimble says, “Geospatial is not a market in itself but is a capability empowering solutions in diff erent markets.”

» Vertical industry approach: Th e solution-centric approach caught geospatial industry unawares. It was imperative to invest in domain knowledge and business processes of the user industries. Driven by scalability and profi tability parameters, geospatial industry found new allies in the vertical segments. Evolving strategies specifi c to industry do-mains earned geospatial industry an oppor-

tunity to engage with the important verticals. Ola Rollen, CEO, Hexagon Group, is of the opinion that “geospatial industry will eventu-ally move from being a horizontal industry, to a vertical one focused on certain industry applications.” Furthermore, it will open up a new era of verticalisation and soon, geospatial products would be customised and bundled for specifi c vertical industry segments.

» Open standards and interoperable platforms: Integrated solutions and indus-try-oriented business strategies brought in another challenge with regard to merging geospatial datasets with information sets of particular industry domain. Th is has man-dated the development of open standards and interoperable platforms. Amar Hanspal, Senior Vice President of Information Model-ing, Autodesk, believes “in a new world, it is extremely important that users are able to use whatever data they need and we have to make it completely transparent to users through disoriented architecture and open standards.”

Kudos to the timely creation of Open Geo-spatial Consortium (OGC) in 1995, geospatial industry was blessed with the institutional mechanism to enable stakeholders move for-ward with open, interoperable, and industry-oriented business strategy. Stressing the role of OGC, President and CEO Mark Reichardt, says, “Almost all providers of GIS, earth imaging sys-tems and spatial database systems implement OGC standards which enable users to query each others’ systems for data and services.” Quoting a recent German DIN Standards Study which indicates $17-billion economic benefi ts from standards in Germany alone, Reichardt argues that open standards-based systems save time, reduce costs and save lives. » Enterprise resource management: Enterprise resource management with spatial competency at its core is another signifi cant direction for the geospatial industry. With increasing acceptance of its value for asset monitoring, maintenance and delivery of products and services, geospatial is getting

“

Small businesses are seeds of

information; they often are places

where new ideas can be birthed and tried out. They are also often close to

end-users and are best able to

respond to their needs

“

Geospatial technology is not

an end in itself, but the means to an end. The end

here is to improve our planet and

the quality of life for billions of

people around the world who

are not aware of this technology

Greg Bentley, CEO, Bentley Systems

Jack Dangermond, President, Esri



embedded in enterprise resource planning and customer relations management solu-tions, helping industries to spatially enable their business processes and workfl ows. Steven Berglund, President and CEO, Trimble Navigation, believes geospatial technology applies to a number of industries and there is a strong geospatial-centric database at the core of enterprise market. “Eventually, every piece of data and enterprise solution for any indus-try is going to involve geospatial components, enabling transformation of business processes of these enterprises,” he adds.

» Cloud-based solutions: Cloud-based solu-tions off er multiplicity to geospatial off erings and allow one to collect, collate, process, analyse and use datasets from diff erent sites on a common platform without the need to migrate or transfer the same. Cloud platforms off er near real-time and live data collected through sensors on several aspects of ongoing activities around society and busi-nesses. Steven Hagan, Senior Vice President, Server Technologies at Oracle Corporation, argues, “Th e use of Cloud computing is par-ticularly relevant to public sector organisa-tions managing large volumes of geospatial information. Mounted with budget pres-sures, governments can reduce data stor-age costs, consolidate operations, and help minimise the overall cost.” » Commoditisation: Commoditisation of geospatial information is the most signifi -cant trend of the last decade, which added a whole new dimension to the business of each constituent stakeholder. Applications like Google Earth, Open Street Map, and Micro-soft Virtual Earth connected geospatial with the common man, enabling spatial thinking en-masse. Emerging spatial functionality in social networking solutions is opening up the next level of commoditisation of geospatial information, through location-enabled apps and games, improving spatial orientation and capabilities of people. Advocating the ‘where’ element, Stephen Lawler, CTO of Bing Maps,

Microsoft says, “Th e current decade is poised to do the same for the ‘where’ dimension across devices, data and services. Just as the ‘who’ dimension increased relevancy of our digital world, the ‘where’ dimension will do the same as our digital connectivity reaches out to touch the entire physical world and reasons with volumes of user-generated data and real-time sensor information.” Such an engagement of the common people with maps and spatial characteristics will give a boost to geospatial industry, both on the professional and consumer front.

Changing business scenario and re-defi ning the geospatial ecosystem

Broadly speaking, geospatial industry could be arranged in the following fi ve categories:• Data acquisition via surveying, positioning,

space, aerial and ground-based sensing .• Data processing through image processing,

photogrammetry and laser processing. • Data modeling through DEMs, 3D models. • Data analysis, Data visualisation and

decision support systems.• Data publishing and printing.

In addition, several technology develop-ments in the World Wide Web, telecommu-nications, engineering and Cloud have been playing a role in enhancing and expand-ing the utility and relevance of geospatial industry.

Solution companies like Rolta, Infotech, Intermap, AAM, PASCO, Critigen, DataWorld and Geodan have been an integral part of the geospatial ecosystem. Small and medium enterprises, engaged with delivering services, reselling and trading of geospatial products, forms the largest and a critical component of this ecosystem, contributing more than half of the entire geospatial turnover.

Acknowledging their contribution, Jack Dangermond, President, Esri says, “Small busi-nesses are seeds of information; they often are places where new ideas can be birthed and tried out. Th ey are also often close to end-users and are best able to respond to their needs.”


“

It is extremely important that users are able to use whatever data they need and we have to make it completely transparent through things like disoriented architecture and open standards

Amar Hanspal, Senior Vice President, Information Modeling, Autodesk

“

Increasing integration of geospatial technology with enterprise information and communication technologies will see the advent of ‘geospatial web’ in the coming years

K.K. Singh,Chairman, Rolta Group



With advancements in the Web and Cloud technologies as the medium of storing and publishing geospatial data, content compa-nies took the lead in shaping the business direction of the ecosystem. Recognising the potential and challenges of the Web commu-

nity, Dangermond says “one of the challeng-es is to reach the Web community that is less interested in details of GIS technology and more interested in having simple mapping APIs that can be embedded and used to build their applications.”

Data Acquisitions Data Processing Data Modelling+3D Data Analysis + DSS Industry Solutions Localisation

Hexagon

Leica Geosystems Erdas New River Kinematics (NRK) Intergraph a/m/t software service ag MANFRA

Novatel Intergraph GTA Geoinformatik GmbH Erdas Listech Navgeocom

Z/I Imaging myVR Loyola Enterprises MicroSurvey Geosystems Kazakhstan

Augusta Systems Technodigit Denali Elcome Technologies

Listech Mycrona GmbH

GeoMax Mahr Multisensor GmbH SISGRAPH

Trimble

Logicway OmniSTAR Vico Software, Inc. (Vico) Penmap Software Plancal

Refraction Technology Defi niens ALK Technologies Mesta Software

Gatewing SketchUp TMW Systems AceCad Software

Ashtech GEOTrac

Dynamic Survey Solutions INPHO WinEstimator

Yamei Electronics Technology

LET Systems

Accubid

ThingMagic Tekla Corporation

Spime Cengea

PeopleNet MyTopo

EsriGeoIQ Procedural Geoloqi

SpotOn

Maptel

Bentley

Pointools Ltd gINT FormSys EuResearch Char*Pointer Tecnologia

SpecWave

Ivara

elcoSystem Software

SACS

Enterprise Informatics eB Insight

Exor Corporation

Autodesk

PI-VR Allpoint Systems LLC

Naiad fl uid simulation technology Qontext

HSMWorks Aps Firehole Technologies Vela Systems

Socialcam Instructables

Micro Application Packages Limited

GRIP Entertainment Technology

Pixlr

Acquisitions for Complete Geospatial Workfl ow



Acquisitions for solutionsTh e emerging trends of the solution-centric approach and enterprise orientation triggered a change in the existing business practices and policies of geospatial companies. Th e entire ecosystem of geospatial industry, which was working with well-defi ned boundaries of its constituents, went through a rigorous scrutiny both by players within and outside the industry. Th e industry realised that the required degree of integration/convergence for developing a solution-centric workfl ow environment wasn’t an option to sail through by mere partnership and collaboration. It requires acquisition of technologies, integration of processes, and embedding of workfl ows, which was possible with a structural re-organisation of the existing ecosystem. Th e process began in early 2002-03 when Leica Geosystems (a GPS and surveying company) acquired the well-established and leading image processing company Erdas, sub-sequently launching the Leica Photogrammetry Suite. Th is marked the beginning of an inte-grated approach towards off ering photogram-metry and image processing, along with the well-established data acquisition technologies like surveying, positioning and aerial sensors.

Th e story didn’t stop at this stage, and very soon, Leica Geosystems itself was acquired by Hexagon, a much smaller company than the size of Leica. Hexagon, initially seen as an investment company, began consolidating its position in geospatial market and continued to pursue its objective of completing the geospa-tial workfl ow either through in-house devel-opment or technology acquisitions. Having developed suffi cient capabilities in the fi eld of data acquisition and data processing, Hexagon began to experiment with the development of visualisation and analysis tools through its Erdas team sometime in 2006, entering into a well-defi ned GIS market, which further caused breaking of long-standing collaborative rela-tionship of Erdas and Leica Geosystems with Esri — the largest GIS player of all time. Th is opened up the doors for many more companies to associate and partner with Esri to fi ll the gap, and soon BAE Systems (photogrammetry) and

Excelis (Image Processing) got into strategic alliance with Esri.

By this time, Google launched its revo-lutionary product ‘Google Earth’, creating a global awareness about geospatial informa-tion and tools. Overnight, it changed the course of geospatial business and opened up the market, attracting attention and invest-ments from large companies. Microsoft fol-lowed soon and launched ‘Virtual Earth’. An important point to be noted here is that both Google and Microsoft acquired geospatial companies, Keyhole and Vexcel, respectively, adding a new dimension to the ongoing process of re-organisation of the geospatial ecosystem. IBM and Oracle, who until then participated in this game more as partners or associates of major GIS companies, also began to have larger and independent positions for their respective spatial database products.

Getting back to the core geospatial indus-try, we must acknowledge that another major geospatial player, Trimble, made a soft entry in this game with the acquisition of Spectra Precision around 2000. Considered to be a market consolidation step originally, this acquisition soon proved to be a step to expand Trimble’s technology portfolio, off ering value to the customer base of both the companies.

Acquisitions for competitive advantagePost 2007, a series of acquisitions and mergers took place in geospatial industry, led primarily by Trimble and Hexagon. In the meantime, the industry also witnessed two major acquisitions of geospatial content companies in high-value transactions. TomTom acquired TeleAtlas for $4.3 billion and Nokia followed with acquisi-tion of Navteq at $8.1 billion. Additionally, we also witnessed the acquisition of SmallWorld and MapInfo by GE and Pitney Bowes, respec-tively. Th ese acquisitions, mainly done to add a competitive advantage to their respective businesses, were also the harbingers of hope and opportunities. However, unaff ected by the increasing threats of prospective hostile acquisitions from outside, leading geospatial players like Trimble, Hexagon, Bentley, Esri


“

Just as the ‘who’ dimension filtered and increased relevancy of our digital world, the ‘where’ dimension will do the same as our digital connectivity reaches out to the physical world

Stephen Lawler, CTO, Bing Maps, Microsoft

“

Almost all providers of GIS, earth imaging systems and spatial database systems implement OGC standards that enable their users to query each others’ systems for data and services

Mark Reichardt, President & CEO, Open Geospatial Consortium



continued increasing their technology port-folio through regular purchase of small and medium companies, primarily in the fi eld of imaging and modeling software, strengthen-ing geospatial workfl ows to serve the develop-ing markets of plants, buildings, design, engi-neering, mining and exploration industries.

Th e economic slowdown put a break on high-value transactions by large business houses, but the trend of acquisitions and merg-ers continued (with a limited period pause in 2008-09), probably because of the sheer survival instinct of geospatial industry. Th e acquisition of Intergraph by Hexagon could be considered as the most triggering and im-portant one in this series. Th is acquisition took the geospatial industry by storm. It defi nitely displayed the market’s failure to anticipate and understand the future business direction of Hexagon. Many had apprehensions and many continue to have apprehensions about the value and utility of this acquisition, but looking at the current market trends it seems to be most strategic acquisition which empowered Hexagon with end-to-end solution capabilities, covering every part of the geospatial workfl ow.

Business value of geospatial industryTh e past decade has brought signifi cant value to several vertical industries, making geospa-tial one of the fastest emerging technology sectors. In addition to market trends which forced the geospatial industry to innovate, converge and integrate with business process-es of promising industries like manufacturing, plant design and buildings, it was the vision-ary leadership of Trimble, Hexagon, Topcon, Bentley and Esri that initiated the process of evolving geospatial workfl ows and solution-centric approach that proved to be instrumen-tal not only in expanding the size of geospatial business but also brought forward its unique economic value propositions to the forefront, opening avenues for further development.

We at Geospatial Media, have not done any scientifi c study to measure the market size of geospatial industry. However, based on our formal and informal interactions

Companies Forte Merger Outcome

CSR Wireless LBS+indoor navigationSiRF GPS chips

TomTom PNDLBS+navigation

Tele Atlas Geo data

Pitney Bowes MailingBI+mail tracking

MapInfo GIS software

Nokia TelecomLBS+navigation

NAVTEQ Spatial data

Thomson Reuters Tax & accounting Real estate+property TaxationILS Land management

Amazon IT company Navigation on kindle fi reUpNext 3D mapping

Apple Wifi SLAM Indoor navigation in iPhoneTech Giant Indoor navigation

Facebook Social networkingLBS

Gowalla+Instagram Social+location

Motorola Tech giantLBS

Aloqua LBS software developer

Nokia TelecomLBS

MetaCarta Location

Daily Mail Newspaper and television groupLocation-based news

RMS Software company

GE Electric company Utility Services+geospatialSmallworld Geospatial company

Google Search engineGoogle Earth

Keyhole mapping company

Microsoft Software companyMSN Virtual Earth

Vexcel Corp Mapping company

Acquisitions for Competitive Advantage & Industry Solutions

with the key stakeholders and analysis of existing reports, we strongly believe that the size of global geospatial industry is very close to $100 billion and it is growing at an annual growth rate of 10-15%. Th e total revenue of top 10 geospatial technology companies is estimated to be about $10 bil-lion. Additionally, the next level of technol-ogy companies contributes almost similar revenue of $10 billion. Since most of the technology companies trade their software and hardware products through distribu-tors/resellers and partners, this segment ac-counts for about 20- 25% additional business

AcquirerAcquired company



opportunity for the market, pitching the total technology business at around $25 bil-lion. Th ese technology companies leverage a much larger volume of business through their solutions and service providers. For instance, Esri’s 2012 revenue through soft-ware sales is estimated to be $1.4 billion. Dangermond says Esri software leverages somewhere between $16 and $19 billion in sales of data, hardware and services. Follow-ing the above, on a very conservative estimate, technology companies put together leverage about $60-75 billion, making the total closer to the $100-billion mark.

While adding to the actual market size, one needs to take into ac-count the revenues of na-tional mapping, cadastre and space agencies. According to an estimate from the Chinese government, the total business of the geospa-tial market in that country is $31 billion. In fact, several progressive governments, includ-ing Japan, South Korea, Canada, US, UK, Germany, India, Brazil and China, have been investing heavily in geospatial technologies. Providing another dimension to the geospatial market size, a recent Google-commissioned study estimated the global geo-services mar-

ket to be between $150 billion and $270 billion. In all probability, this phase of re-organ-

isation of the geospatial ecosystem is over, at least for a few years. Leading geospatial players have demonstrated their business urge and willingness to continue with technol-ogy acquisition, enabling productisation of solutions. One can very well see the alignment

and re-alignment of companies featuring in diff erent categories of geo-system with dif-ferent emerging groups and alliances.

Th e next phase of re-organisation will began with the begin-ning of the revival of the world economy and we could expect the entry of very large business houses, not necessarily with the

purpose of capturing existing geospatial business, but to utilise and harness the true value of geospatial ability in industrial pro-cesses and economic activity.

Disclaimer: Th e author has collected the information presented in this article over a period of time through formal and informal channels and does not hold any responsibility towards its authenticity.

Sanjay Kumar, CEO Geospatial Media & Communications [email protected]

CompanyEsriIntergraph SG&IBentleyAutodeskMapInfo*Others

2012 1.40.50.30.30.20.5

In billion $

Geospatial software revenues of select companies

*Include companies like GE Smallworld, Supergeo, SuperMap etc

“The use of cloud computing is relevant to public sector companies managing large volumes of geospatial data. Mounted with budget pressures, governments could reduce data storage costs, consolidate operations, and help minimise overall cost

Steven Hagan, Senior Vice President, Server Technologies, Oracle Corporation


0

100

200

300

400

500

Revenue of Technology Companies Revenue of Solution Companies

Hexagon Trimble Autodesk

NA

Bentley Topcon Digital Globe

GeoEye FARO Nokia Location & Commerce

Esri Rolta Infotech Pasco

Million $ Million $ 2009-10 2010-11 2011-12 2012-13

0

500

1000

1500

2000

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3500


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Geospatial Workflows - Redefining Industry ecosystem