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‘3D is the way forward for GIS industry’

Talk of the year and the most disruptive personality on the geospatial scenario today, Ola Rollen, President and CEO, Hexagon AB, has brought in new set of rules to (re)define the geospatial ecosystem and created a new pitched equilibrium for the industry.

Ola Rollen
Ola Rollen
President and CEO,
Hexagon AB

Talk of the year and the most disruptive personality on the geospatial scenario today, Ola Rollen, President and CEO, Hexagon AB, has brought in new set of rules to (re)define the geospatial ecosystem and created a new pitched equilibrium for the industry.

With a significant stake in the geospatial industry and a great vision to take it further, Ola has given a new direction and today it is quite appropriate to say that the fate of geospatial industry depends heavily on the success of Hexagon…

It has been almost a year since the acquisition of Intergraph. How has the last one year been for Hexagon Group?
It has been a very good year. We have set the records on all financial parameters. Also, since we didn’t actually buy Intergraph till the beginning of Nov 2010, it has been about six months rather than a year since the acquisition. But all in all, we are quite pleased. We published our first quarter results for 2011 two weeks ago and they were received very well from the financial community.

Congratulations. However, there seems to be some confusion amongst the distributors and partners of the constituent companies of Hexagon with regard to the future of their relationship. Your comment?
I do realise there is a bit of uncertainty, primarily for Erdas distributors. I don’t see the traditional Intergraph distributors being particularly worried, simply because there aren’t that many. Intergraph has had a direct model. Erdas however has had a distributor model. I don’t think they should be concerned because our planning ensures that there will be plenty of opportunities for everyone selling Hexagon products.

It is true that there are a lot of opportunities. But let’s take an example of a user looking at purchasing a camera. You have two distributors selling cameras, one for Leica Geosystems and one for Intergraph. A user might need to know which camera is more suitable for their kind of application. In such a scenario, if the distributors are not sure about the relationship, they don’t push forward the right kind of information at times.

We have completely merged the two camera businesses. I don’t think there is any conflict between the two product offerings. Against such a background, if a distributor doesn’t push forward the right kind of information, it could be possible that he is not educated enough about the different products. Let us take the instance of ADS 80 camera and DMC camera. I think they have their own market positions. We have ironed out most of the conflict areas. I think they are coming together nicely. We usually allow a year for this to happen and we are six months in the process.

We are still looking at how Erdas Imagine can be integrated into Geo- Media. Imagine was built on top of an Esri product. Historically, we would never try to integrate Imagine with GeoMedia. But that obviously needs to happen in the next few months. Hopefully, we can launch the new GeoMedia version which will have the features and the functionality of Erdas products by 2012. This year is too early.

After having organised all the products of Hexagon companies, how do you see the positioning of Hexagon Group in the geospatial industry?
I think we’re in there and there is plenty for Hexagon to do. We are never satisfied with our position; we always think that we can improve further. We do have the tools and the toolbooks within the company today to develop the kind of tools we see are necessary for the future. In certain areas, we have product gaps and technology gaps. But if you look through the Hexagon organisation, I would say we are already 90 percent complete.

Do you think large conglomerates like Hexagon or Trimble can serve users as efficiently as smaller companies and give individual attention they expect?
First of all, I would like to clarify that we are not a very big company. It is true that sales-wise and turnoverwise we are EUR 2.2-2.3 bn (USD 3.2 bn). In those terms, we are a fairly large company. But if you compare us to Google and Microsoft, companies that you have to accept are players in this industry, our resources are not really adequate to do what we need to do in the geospatial arena. One should regard us and our peers in this industry as defending the business against these large companies. Because they will eventually eat away the added value of traditional map creator, surveyor or cartographer. We have already seen a large chunk of the market disappear with the launch of Google Earth.

That’s interesting but the model is different. Google addresses individuals or small companies while you go through mapping companies. It needs an integrated approach with companies like Hexagon working closely with smaller companies to defend the industry. Your comment?
We get very little income from the Google Earths and so on, but they have great impact on our customers’ businesses. So we think in terms of directing our customers towards a better future where they don’t have to compete head-on with Google. We believe in dynamic GIS, as opposed to static GIS.

I do believe that accuracy is the future as it was in the past. One can only survive by providing very accurate data. But a shift will come in the number of updates. We need faster tools to measure very precisely and also update on a more frequent basis. That’s where the future lies for professional GIS companies.

Google spans the entire earth. And you can’t update the entire earth every month, every week or every day if you so wish. But we try to develop tools where you can, in a very cost efficient manner, update the smaller geospatial surface. And then, if you are a professional mapping company and use those tools, you can definitely compete in your local market. That’s the kind of market we try to drive towards.

Hexagon 2011, has the theme – Building Smarter World. What is your vision to build a smarter planet?
We need to start with a global outlook and understand what the future holds for all of us. The shift in economic power is driving everything. So far, we have had a very vertical world, where 600 million people have consumed 95 percent of the global production or global resources. I am obviously referring to Western Europe and North America. In the last 10 years, we have seen the emerging markets of Asia grow their economic power. By 2020, economists expect China to supersede America as the largest economy on this planet. We are seeing a big shift in global economic consumption, with probably a billion people joining the global middle classes in the next 10-15 years.

In order for this to happen, we as a society need to consume our resources in a much more clever way. We need to explore oil, minerals, gas, electricity, water, power and so on in a much more economic way than what we have been doing so far. We also need more clever infrastructure and more efficient utilities. On top of that, we have a growing concern for security and public safety which are connected to GIS. I see professional GIS going strong in these areas.

What are Hexagon’s plans in playing this role?
We can only do it by launching new products. Take mining for example. We are designing cleverer mining refinery plants. We are active in fleet management, ie, monitoring all the vehicles in an open pit mine. That’s where we see GIS being an integral part of the product offering. A mining company needs an updated GIS model of its open pit mine. It probably needs to be updated every 24 hours. And that GIS model, or lets call it digital terrain model, because its 3D that they need it, would be used as a basis to guide all the vehicles in that mine. Let’s take the example of Coal India with whom we worked. Some of Coal India’s mines have up to 600 vehicles moving about in the mine at the same time. They need to explore coal assets in a more efficient way while reducing pollution and wastage.

We have talked about combining GIS analytical tools using feature extraction to analyse crops. This can be followed by using Leica Geosystems’ machine control assets to guide machines to perform certain functions on the field where one locates deficiencies, be it water, putting more fertiliser on the crop and so on, to improve productivity per square metre. There are many such applications which can combine GIS with our other in-house technologies, to reduce waste and improve productivity. By doing this, we can support the migration of people living under poor conditions to reach middle class conditions. That is the driver. The big driver in the next 30-40 years in the global economy will be the growth of middle class.

Geospatial technology is getting integrated with several end-user domains, be it construction, engineering or IT. What, according to you, will be the trend in the technology – will it get merged with other domains, or will it stand alone?
I think GIS will merge with CAD. Let me illustrate. We have installed public safety systems in large cities, where we control, for example, movement of police cars using GPS on a GIS map. The dispatch facility can, in real time, see the location of all police cars in that city. As one calls 911 or any other emergency number, the caller’s geospatial position will appear on that map. And then they can coordinate what police car or ambulance goes to that address.

It will not stop there. As societies become increasingly complex, there will be need for the same functionalities inside buildings. The GIS in this application needs to be scalable, so that you can drill into a building and see what’s going on there. Think of skyscrapers that are coming up all across the globe. In an unfortunate circumstance that one of these large skyscrapers catches fire, there would be smoke everywhere inside the building and thousands of people would be trapped on these floors. How would the firefighters find them and help them out? The interiors of these large buildings need to be documented so that one can use them to navigate in real time to help and assist people. This is a typical application where even one-time use can save thousands of people’s lives and realise its value. This is what I mean by dynamic GIS. You need very precise modelling combined with actual motion. In this case, you would probably need scanning, or specifically laser scanning to scan the building, interior of the building, and then put it in a sort of CAD model.

While GIS might get merged with CAD, there is more frequent usage of the term geospatial.
I think we should call it 3D and not geospatial, because that’s what it is all about. To be able to describe and measure the reality in 3 dimensions is the future. There is so much information in the third dimension. We need seamless zooming in and zooming out functionality from sub-millimetre accuracy up to maybe metre accuracy and that is how I look at this market. I basically have accuracy on the X-axis and the size of the object you want to describe on the Y-axis. We call it the funnel, because the more precise you become the smaller the object you measure and describe. But, we feel that GIS is one integral part in a system of information systems that basically go from nanometres up to metres in accuracy.

There is clearly a move towards mergers and conglomerates in the industry. Do you think smaller companies will have a role to play in the future?
There is always space for small companies. While the smaller companies need to continue to improve their product offerings, there is also a need to specialise on one or two key products and provide something unique. For example, if you try to do a Google Maps, you won’t survive. Business is all about finding a niche where you can survive as an organisation and deliver value to your customers. The market is opening up a huge opportunity for GIS professionals because the world is moving from 2D to 3D. It is an exponential movement because the number of maps that need to be interpreted if there is a third dimension is enormous. And, within this expansion there will be room for clever individuals and organisations to survive. Large companies will not be able to span over all the opportunities. While the larger companies take more and more of the volume market, the smaller companies need to look for opportunities in the high end.

One of the concerns for geospatial industry is that it has not been marketed well, to the political, economic and administrative leadership. What role can a company like Hexagon play in raising the profile of this industry?
The industry needs to move on. It can’t hang on to just GIS and maps without evolving and adding value. For example, large scale city planning would not require GIS and can be accomplished by using Google Earth. As long as people dwell in the past and not move on to carve out a great future for themselves, the profile of this industry cannot be raised. But, we will raise the profile of Hexagon’s end user market by talking about 3D applications, which is something that Google can’t do. People will be willing to listen to that because we have solutions for a different set of problems compared to what the GIS market did in the past. One can always use GIS for cadastre. Authorities dealing with cadastre don’t trust Google Earth because it’s not precise enough. So there will always be a niche for surveyors doing cadastral work. For all the commercial applications on top of that, one will have to start using other words like digital terrain models, 3D etc.

You have talked about nano-metre to a metre resolution data. But, higher the resolutions, greater the risk of privacy infringement. There is a serious debate among legislators in the US and elsewhere to protect users’ right to privacy. Do you think restrictions on the content will affect the industry adversely?
I think the legislators are not in sync with time. For example, look at the various social networking sites. If you are on Facebook, you have signed away your privacy. Facebook owns anything you publish there. And you have around 2 billion Facebook users around the globe. So, we are getting more and more used by exposing our private lives in a very delicate way on public and social media on the internet. I think we are entering a new era where everything is becoming much more public.

Do you think there is a need for companies to get together and try to educate and put forward some kind of a thought process on this?
Companies do not have resources to sit in committees until they generate money and I am a firm believer in that. It is a waste of time. But, if you compare the number of decisions actually taken by politicians vis-à-vis those taken by other decision makers, I think politicians’ power has eroded over time. I am once again talking about how these social networks and internet have enabled people to take decisions in a different way compared to what would have been the case 20-30 years ago.

Do we foresee Hexagon becoming more solution centric?
We definitely will be much more solution centric and I think a good analogy of that is Apple. Apple created iPad, which is a bleak copy of a computer unless you fill it with apps. They created a new business model where you have a platform that allows you to deal with various types of solutions and services that different kinds of customers will be interested in using. For example, you could be a golf enthusiast and there is an app for golf. While there are different apps, the platform remains the same.

That is the future for Hexagon, where we can create an infrastructure and then different companies can build upon that infrastructure to generate their own businesses. That is the way forward around the globe.

So, do we foresee capacity being added to Hexagon in the form of a solution company?