As the ‘where’ element becomes an indispensable element of businesses, driving our thinking, problem-solving and decision-making capabilities, the geospatial industry must adopt new collaborative models to survive and thrive.
Apple, Uber, Amazon, LinkedIn, Facebook, AirBnb, Microsoft, Ola, TripAdvisor, Twitter, Booking.com, Quikr, Financial Times, Flipkart and many more companies… Wondering what is the connect here? “Location, Location, Location!”
Today, spatial information is critical to a much wider range of applications than ever before. Spatial context is now seen uncovering new trends, relationships and other business insights. While smartphones, PDAs and wearables bring the Web to any location, the context of usage turns into the main point, and the knowledge of the location becomes fundamental. Citizens have become the biggest group of consumers as well as producers and enablers of location data. Juniper Research reports that the number of location-aware apps is expected to triple by 2019. With more consumers fast embracing location into their everyday lives, businesses are fast trying to keep up.
“Location has always been vital to making sense of the dynamic world around us and geography, according to the study of spatial relationships between components of the world,” says Mladen Stojic, President, Hexagon Geospatial.
The ‘where’ element has become an indispensable element of businesses, driving our thinking, problem solving and decision-making capabilities.
Location intelligence is more than just a map with dots on it. For instance, empowering clients with purchasing knowledge at the front door of commercial shops and sharing price comparisons on customers’ smart phones is feeding the retail industry’s individual and aggregate customer profiles for increased sales efficiencies through Big Data analytics. Traditionally, geospatial had been cubby-holed enormously, and this kind of ‘spatial intelligence’ was the responsibility of highly compartmentalized and specialized geospatial industry players and their users. However, evolution of technology and transformation of the industry as a whole has democratized both the access to and the insights within and throughout the organizations employing them.
Naturally, this is creating new business models. As new companies threaten to disrupt the market with innovative products and solutions, traditional geospatial companies are going for collaborations with each other or with mainstream IT companies to survive the competition. Then there are a host of major mainstream companies like SAP, Microsoft, IBM or Oracle, and automobile, infrastructure or utility firms that have shown interest in location, with geospatial capabilities being integrated into all kinds of systems and they are no longer separate industries.
But where did this all begin?
According to Marc Melviez, Group CEO and Director, Luciad, “Google Maps, Google Earth and the increase in mobile devices have caused the masses to start thinking in terms of ‘where’ for many aspects of daily life. The trend picked up quickly.”
Agrees Clint Brown, Director, Product Engineering, Esri when he says a little over a decade ago, consumer mapping exploded onto the Web with tools like Google Maps and just a few years ago map-based apps became one of the most popular categories to download onto amount phones.
Today, awareness about geospatial technology and its applications across businesses and industries is on a continuous rise. Naturally, this is encouraging several traditionally ‘non-geospatial’ companies to engage in both spatial data capture and consumption, primarily as an enabler for their own products and services.
Over the past few years, the term ‘spatial enablement’ has become a trending jargon and there is a phenomenal expansion of applications and enterprises that have been labelled disruptive in terms of capitalizing on spatial components. Spatial enablement — or the ability to add location to almost all existing information — unlocks the wealth of existing knowledge about social, economic and environmental matters, playing a vital role in understanding and addressing the many challenges we face in an increasingly complex and interconnected world.
Manish Choudhary, Senior Vice President, Global Innovation & Managing Director, Pitney Bowes, emphasizes that geospatial and location technologies are now present across a number of industries, including retail, transportation, government and banking. He gives an example of the banking sector using geo-data to identify areas with high population density, Internet penetration, smartphone users to set-up ATMs, branch and sales employee allocation, and other banking services. Governments across the world are also using earth observation, spatial analytics and other geospatial technologies in fields of urban development and planning. Be it choosing the perfect location for setting up a new hospital, or logistics and resource planning for agriculture or disaster management, data and geographic information has become a core focus. This has led to stakeholders evolve fluid strategies with important decision points, thus altering the course of these strategies from time to time. This trend is expected to continue as technology evolves making capture and application of spatial data more and more cost effective.
It is exactly how, Stojic sees it: “Businesses are seeking to make use of what we in the geospatial industry have always known: everything has a location.” He feels this makes it a very powerful time to be in the geospatial industry for the industry has the capability to shape the potential across a diverse set of different industries. However, he also goes on to pose a relevant question, “How do we make this streamlined and as simple as possible for non-traditional businesses to build their individual geospatial applications?”
What is driving mainstreaming of geospatial?
“The trend is being driven by the need to own the geospatial data.” says Asif Khan, Founder, Location based Marketing Association (LBMA). That the value of the geospatial business is growing is clearly evident by the interest shown in this field by an increasing number of non-geospatial companies, including mainstream IT companies. In a small phase of time characterized by the speed of transformation, enabled by emerging technologies and a considerable continuity in industries and markets, it has always been observed that the most innovative businesses and organizations start to develop a new collaboration system that goes beyond the open innovation. It is about developing collaboration and synergies between businesses belonging to different industry verticals to produce new products, services and processes.
As a result of this collaboration, both ‘non-geospatial’ as well as ‘geospatial’ companies, which belong to two very distant segments, are moving into territories hitherto unexplored. The collaboration between two good ideas multiplies the result, and ultimately the value of the end solution increases manifold as a result of combination of technologies, applications or services.
As Melviez predicts, “The trend of increased geospatial information and the creators of geospatial information will only continue to increase and intensify.” He also envisages more and more information to be shared using geospatial metaphors, and feels that the ‘map’ would conquer part of the screen real estate currently used by spreadsheets. This in turn is expected to drive a need to acquire knowledge, know-how, techniques and applications to manage geospatial information.
So where is this heading?
Location undoubtedly is becoming fundamental to all decision making. Quite interestingly, Khan describes location data as the ‘cookie’ for the physical world. Why so? Because, much in the way that cookies are used for tracking people online, location data has the potential to enable tracking of people across their entire day journey. From home to work to lunch to shopping to entertainment and back to home again. Interesting, eh!?
Ron Bisio, Vice President, Trimble Geospatial, aptly explains: “Spatial data is becoming ubiquitous across both our personal and professional lives. From tracking the location of a business asset, to paying rent, to finding the closest coffee shop on the smart phone, even if we are not aware, spatial context is already a fundamental element in most of our decision making.” Industries are looking at geospatial information to gather more accurate data and to increase connectivity. There is an opportunity around location that extends beyond targeting customers. One major driver for this is the marketing/advertising sector wanting to leverage real-time geo data to engage and understand ‘where’ their customers are and ‘where’ they will potentially be going. Location intelligence platforms can help businesses, especially e-commerce, to gather invaluable information about their customers are along with actionable visual insights to deliver personalized offers and communications, sometimes even on a real-time basis.
As location becomes all pervasive and spatial enablement befalls the need of the hour, non-traditional players are gradually becoming an integral part of the geospatial industry. This trend is definitely transforming the business models of major geospatial players as users begin to think about GIS capabilities as part of their enterprise systems with various classes of users. For example, in the past few years Esri’s ArcGIS platform has moved from desktop product, which professional users would buy per seat or as shared sets, to one where work is orchestrated across many apps, desktops and servers along with the Cloud. Today, spatial analytics is reaching not only desktop using analysts but also the field workers who use custom GIS apps as well as the end users across every field. In turn these users are also creating valuable information products and maps that are intended to reach consumers through apps on their smart phones, other portable devices, crowdsourcing and story maps. This is enabling real people to mine actionable, useful information out of the ever changing pile of data available in the real world.
Stojic has an interesting observation to make — because traditional maps were too expensive, modern maps were designed to be multitaskers. And instead of communicating, our maps began complicating information. According to him, the map of the future is a Smart M.App — the revolutionary technology offers a platform that lets customers build their own dynamic information service. They are designed to be used to provide information about a specific business problem.
The pace at which collaborations between various technologies enabling location analytics is happening is remarkable. The bigger players of the geospatial industry are trying to make applications and information more public in order to encourage collaborations and partnerships. Technology innovation and increasing access to information have triggered endless business opportunities which are leading to mainstreaming of these technologies while compelling businesses to align, re-align and consolidate.
Is this driving acquisition of geospatial companies?
Uber and AirBnB are classic examples of further disruption to the disruptive agents as a function of spatial enablement. “If you take location out of Uber, you take them out of business. Uber uses data to predict traffic patterns, estimate near accurate wait-time for taxis and re-route to the fastest possible route to the destination, to give users a seamless travel experience from point A to B,” as Choudhary puts it.
From planning their entry into new markets, to improving customer service capabilities, the use of location technologies will be key to success. Uber isn’t the only company using location intelligence to keep its customers happy, every time someone make an online purchase on Amazon, ebay or any e-commerce website, a lot of work goes on behind the scene to identify the most optimal delivery process, calculate landing costs for shipping, analyzing courier services available near the location, to get the order delivered as quickly and seamlessly as possible. This trend will only increase with sophistication of IoT and AI capabilities.
Non-geospatial companies are discovering that ‘spatial’ is not as easy as they had thought. It is one thing to use your own personal GPS application on a smartphone and absolutely another thing to design a logistics application that optimizes delivery times by taking real-time factors into account. After realizing it is more complicated than anticipated, these non-traditional players start to hunt for talent, then discover such talent is scarce! Finally they realize that building resilient systems would take way too long and would also involve a lot of risk. So, what is the solution? ‘Buy’ is better than ‘make’ and this come in the form of acquisitions!
Majority of collaborations happening between the non-spatial and spatial industries are in terms of acquisitions of small-scale geospatial or location-based companies by the ‘non-geospatial’ players for their spatial enablement. This is also substantiated in the Global Geospatial Industry Outlook, 2017 Edition, by Geospatial Media and Communications, where trends traced around acquisitions and partnerships for spatial enablement through 2012 till 2016 (as seen in the Figure 1) show a conspicuous rise in such acquisitions.
So, is there a scope for partnerships?
Experts feel this is a possibility in the near future. One suggested model could be of traditional geospatial companies seeking out emerging location datasets gathered by non-geospatial companies to explore partnerships, licensing and investments before outright acquisitions. With the exponential value addition of geospatial in other industries, enterprises are seizing new opportunities around customer loyalty and supply chain efficiency with the help of collaboration with location intelligence companies. Companies have begun to understand the customer value that can be derived from geospatial information as they strive to differentiate themselves from their competitors. By combining their expertise with geospatial capabilities, businesses increase their overall value and this would be more so if they opt for a partnership model and not just acquiring certain small scale location service providers.
Another interesting trend seen today is that the already well-established geospatial companies are collaborating within themselves, instead of competing with each other. Some major mergers like the Topcon-Sokkia merger portray that where the market environment for the two companies is highly competitive and the merger of two companies is to maintain the edge in the increasingly competitive worldwide market. In more buoyant times, companies usually complement each other to make the collaboration worthwhile. On the same line, Choudhary talks about Pitney Bowes exhibiting partnerships with a number of technology companies, like a strategic alliance with GE which deals with embedment of location intelligence. It also has a number of technology partners such as IBM, Ernst & Young, GE Digital, Microsoft, Salesforce, Okta and Apigee.
Contrary to the belief that this is making the field smaller, the geospatial industry envisions the increasing interest in location intelligence as a great opportunity. “We recognize that while we have extensive expertise in the geospatial market, there are companies out there who understand their own individual industry and local markets, and large companies like Hexagon are leveraging the brand recognition to establish mutually beneficial partnerships with large, multinational companies,” says Stojic.
As interest levels about location strategy increases and organizations develop their own in-house capabilities, they are doing so only by leveraging on the existing geospatial information, products, services and solutions which is good news for the existing players. This is leading to a more expansive adoption and growth in the use and knowledge of geospatial industry. While there are some businesses which are looking at developing in-house capabilities for analyzing location-based data, this is also resulting in the explosion of the market. This growth is further catalyzed by factors like high Internet penetration, mobile usage, increasing deployment of IoT-based solutions etc.
Choudhary feels that in-house location-based capabilities are only a reflection of this growth and leads to an increased acceptance of location intelligence tools. Bisio agrees to this when he says that the more ubiquitous spatial data becomes, the greater the business opportunity. “Across the industries we serve there is scope for collaboration at all levels. There are always new partnerships forming in efforts to find new ways to address opportunities that arise in the market. This is true both for manufacturers and for the service providers to whom we sell.” He thinks, in the instance of a non-geospatial company acquiring a geospatial/location-based company for their spatial enablement, only highlights the increasingly important role spatial data is playing across most market segments as companies try to evolve their own products and services, or in some cases establish brand new categories. Public examples include recent acquisitions of various spatial technologies by both Uber and Intel.
Rather interestingly, Brown shares that business GIS is growing rapidly at close to 100% annually, and in terms of logistics, major companies are saving on the order of $0.5 billion each year by applying GIS. This growth is not occurring in a vacuum, but rather in concert with their other existing IT systems. Other IT companies with longer term plans and visions recognize this synergy, value, and opportunities from working together (vs. competing) with the geospatial community. While there are evidences of numerous in-house projects failing for geospatial is lot more complicated than imagined, the need and demand for spatial enablement continues.
“It’s more like the tech industry and GIS community are coming of age. The technology platforms involved in spatial analytics have advanced to the point that there are more exciting opportunities to be achieved through collaboration and information sharing,” Brown says, while pointing to the fact that modern GIS has always been about participation, sharing, and collaboration. Since the early days of the technology, people realized that to be success ful they would need data and technical capabilities from other sources beyond their immediate workgroups and organizations. People quickly recognized the need for data sharing and technology integration. Open GIS and data sharing gained traction early and quite rapidly across the GIS community, and these ideals continue to be a critical aspect in implementation of GIS capabilities. Modern Web and Cloud computing have accelerated what is possible in collaborative computing environments.
There is another side to this story that Stojic very rightly brings into light through hard-hitting questions that the geospatial industry needs to ask itself — Why are these businesses developing their in-house capabilities? Are the traditional packages too hard to use or too comprehensive? Is the learning curve too complicated? What really drives this need?
One obvious reason could be that the traditional geospatial offerings are not really catering to the needs of these non-traditional players. For years, business-critical technology providers have been innovating and creating user-friendly, targeted applications that provide timely, at-a-glance dashboard views of their businesses. Why shouldn’t they expect the same from location-based information? Each business has unique needs, and they want to get answers to their business questions without too much overhead. Customized solutions should empower businesses to combine their industry acumen with the industry-leading technology from build targeted applications that address their particular needs.
When a new dataset is acquired, there should not be weeks-long waiting period for the answers. They should plug in the new data and get an updated answer. This is the essence of dynamic geospatial information services. New data, new insights, no waiting!
Collaborative partnerships, particularly the technology driven ones, have a colossal transformative influence. What is more exhilarating is that these innovative collaboration processes are having a cumulative effect, increasing resources that would lead to further competitive advantages. Even a small edge, compounded over time proves to be decisive. This definitely makes it an exciting time to be in the geospatial market, because there is an explosion in the awareness of the importance of location data. More and more people are coming to see the powerful communication outlet that maps provide and geospatial is poised to empower them to take geospatial technology to levels we have never been able to reach before.