An industry previously known for its mapping and navigation capacity, is now maturing into analytics and intelligence, leveraged by both enterprises and consumers alike.
The use of location data in business enterprises is going through a strong development cycle. Location Intelligence is increasingly being used to provide integrated and personalized products and services to customers.
Location Intelligence helps optimize business decisions — from determining the best area to open a new store for improving the supply chain to creating engaging marketing campaigns. Insurance and financial services use location analytics to assess risk and verify claims. Businesses also use location technology to manage customers by integrating their enterprise resource planning (ERP), customer relationship management (CRM) and social networking platforms with the Geographic Information System (GIS).
With renewed interest from enterprises, location ecosystem is now steadily expanding. An industry previously known for its mapping and navigation capacity, is now maturing into analytics and intelligence, leveraged by both enterprises and consumers alike.
The location industry value chain today can be viewed into a three-tier structure:
- Location data and analytics platform providers
- Location-based consumer services and platform providers
- Enterprise business intelligence platform providers with integrated location capability
A uniquely placed segment at the center of location analytics and Business Intelligence interchange is the sharing economy business. From ride-hailing to food delivery services, these businesses are continuously generating, consuming and analyzing location data. It is a matter of time before they start monetizing their Location Intelligence, further disrupting the entire location industry value chain.
The rise of location industry
The integration of GPS in iPhone 3 and the proliferation of smartphones as IoT devices are said to be the defining moments for ‘location’, turning a mere component under the GIS label into an independent industry. The growing importance of this industry is highlighted by the actions of giants like Esri and Hexagon — two core geospatial players, who have steadily moved into the location ecosystem by associating their offerings with Location Intelligence. This way, they can tap into the business analysts and developers’ communities, that are not part of the traditional geospatial industry.
“Location and GIS concepts are already becoming a part of most leading IT organizations and they will eventually become pervasive. The three drivers influencing this are the increasing volume of geospatial data, the growing awareness of its value, and the dramatic advances in the technology itself,” says Jack Dangermond, Founder and President of Esri.
With the advent of Cloud, software-as-a-service (SaaS) platform, 4G-5G network and connected IoT devices, the availability and strategic importance of location data has exploded. Today, millions of connected users on apps aided by innumerable sensor devices are generating location data by the second.
Unicorns like Waze, Uber, Lyft, etc. have Location Intelligence at the core of their business model. Enterprise businesses from retail, logistics to financial services are gradually using Location Intelligence to better understand their customers and keep them engaged.
Javier de la Torre, Founder and Chief Strategy Officer, CARTO, points out, “it has become clear across every industry that the highest-growth companies out there put location first, and we are now entering an era where Location Intelligence is not only limited to early adopters in Silicon Valley (e.g. Google, Uber, Amazon), but is opening up to a much wider range of players (e.g. telecommunications, energy and utilities, and financial services).”
So, what does this mean for the industry? It’s no longer about who has the maximum data. It’s about who can process that data faster and generate critical insights in real-time.
Location data and analytics platform providers: Companies offering location data platform like Google, HERE, CARTO, Mapbox, GroundTruth, Foursquare, TomTom, Factual, Quadrant and many others understand that businesses are competing with speed and efficiency. Unlike in past, when analytics were used for future decisions, businesses today demand insights for immediate decisions. The ability to process data faster, enabling more efficient real-time business-critical applications, gives businesses a competitive edge they didn’t have before.
Cloud-based platforms are the reigning solution to this. As SaaS continues to increase in maturity, location companies are now shifting their business strategies to Platform-as-a-Service (PaaS) to let their customers gain greater agility, flexibility and scalability.
By providing developer-friendly location data, application program interface (API), and software development kit (SDK), these companies let their customers design, build and develop custom applications using their platforms.
Location data platform companies also offer data management, data augmentation, data analytics and data visualization services in their platforms. In a way, the location data platform providers are the one-stop solution for all services with regards to location data and analytics application.
This is a critical responsibility of the industry, as opined by Greg Van den Heuvel, Chief Operations Officer, Pitney Bowes Software and Data. “Without a deep understanding of the myriad data sources necessary for complete location analytics (sensors, both land-based and remote) and the ability to organize and geo-enrich these data, achieving even sustainable living will not be possible,” he says.
The niche ecosystem
As businesses and consumers alike see more value and additional uses of location data, more players are starting to venture into the location field. These new entrants, mostly in the form of startups and small and medium enterprises (SMEs), have created their own niche in the market by providing customized and ready-to-use location-based solutions for specific end-users. Such companies are in the second-tier structure of the value chain.
The most notable segment leveraging on location-based services today is the marketing and advertising. Mobile location data provides real-time and relevant proximity-based information of target consumers. Location-based marketing platforms such as HYP3R, NinthDecimal, Reveal Mobile, bluedot, Swirl Network, Verve, etc. allow businesses to target those mobile users with the right promotional message when they are in the proximity of a store. Such real-time data analytics is tremendous for businesses to gain behavioral insights about consumers’ purchasing habits, dietary patterns and others.
Location data is also a critical component in producing city intelligence that helps improve urban living. One of the primary concerns for cities striving to become smarter and more sustainable is mobility. Smart mobility involves creating connected transport systems, which offer flexibility and efficiency for citizens and visitors to have a more comfortable and enjoyable city experience.
Companies like Citilabs (recently acquired by Bentley Systems), LotaData, UrbanFootprint, Streetlight Data, Groundhog Technologies, PTV Group, INRIX and Moovit are offering cities location-based mobility intelligence platforms that include route optimization, virtual scenario simulation, city network modelling and traffic flow prediction capabilities.
It is also worth mentioning that companies like Gro Intelligence, Farmobile and thethings.iO help farmers and agriculture companies access real-time location data to generate intelligence on agricultural production and consumption patterns.
“We are seeing a growing demand for accurate location data. This is caused by a number of factors, but in particular, the consequences of poor-quality data are becoming more severe as bigger decisions are being made based on data. However, we are also seeing more ROI from companies using location data and this will continue, especially as the quality of location data continues to improve,” says Mike Davie, CEO and Founder, Quadrant.
Sunil Kumar, Founder & CEO of GroundTruth, seconded the positive outlook “As customers become savvier and more familiar with location as a convenient addition to the technology they already use every day, we believe the possibilities for its use expand exponentially. At the same time, as location technology becomes more sophisticated, the convenience and accuracy it provides to consumers will only increase.”
The growing prominence of digital technologies such as Artificial Intelligence (AI), Augmented/Virtual Reality (AR/VR), and Internet of Things (IoT) is expected to drive the outreach of location-based services to more users and in more innovative ways.
Location adding competitive advantage to BI platforms
A major trend that is currently unfolding in the Business Intelligence (BI) space is the data and analytics portfolio integration. Understanding that data will drive processes and operations through analytics and BI, companies are now adopting data strategy in their business models.
It is worth noting that in 2019 alone, Salesforce, the world’s leading CRM software company, has made six acquisitions, and two of them are location and data analytics companies: MapAnything and Tableau. The total investment for the two companies runs into billions of dollars.
In June, Alphabet (Google’s parent) announced that it plans to pay $2.6 billion in cash for data analytics tool maker, Looker. Another BI company, Qlik, also made some significant acquisitions, including Attunity (data streaming) and Crunch Data (conversational analytics), and partnered with DataRobot (automated machine-learning modelling). In May, SiSense, a self-service BI platform, announced its merger with Periscope Data, an advanced data analytics platform. Both Qlik and SiSense now provide end-to-end data integration and analytics platform for businesses.
SAP, the enterprise software solutions provider, has been partnering with Esri to integrate Location Intelligence capabilities via its SAP HANA platform. Similarly, IBM has partnered with Pitney Bowes to include Location Intelligence data in its Watson Knowledge Catalog.
These companies, along with other counterparts like Oracle, Microsoft Power BI, SAS, ThoughtSpot, Information Builders, GoodData, Yellowfin, MicroStrategy, etc. form the third tier of the location value chain.
By adding the location element into enterprise platform, the pre-and post-sales team can visualize database entries in waypoints with routing and scheduling engine as well as integrated GPS tracking capabilities. The additional location-based workflow layer helps solve complex spatial questions, taking into account the distance, cost and time; driving prompter customer service, and therefore deliver a better customer experience.
Matthew Zenus, Global Vice President, HANA & Analytics Solution Strategy at SAP, believes that a digital copy of the ever-changing world is becoming the source for new decision-making and geolocation intelligence. “SAP customers that are embracing the next wave of geolocation functionality are clearly achieving next level competitive positions. They use additional insight to pull ahead and define next generation best practices.”
Sharing economy creating new frontier
The sharing economy — sometimes called the on-demand economy — has rapidly evolved into one of the most popular business models in the e-commerce space. Ride-sharing, home-sharing, on-demand ride-hailing, on-demand food delivery and countless other on-demand services have become a dominant digital force all around the world.
These virtual marketplaces for products and services rely on location-based platforms. Since the business model is to match consumers and providers, real-time, accurate location data is an absolute requisite.
Ride-hailing companies like Uber, Lyft, Grab, Go-Jek, Ola, etc. use location technology to track their network of drivers in real-time in order to match consumer with the nearest driver. Similarly, r food delivery business such as FoodPanda, Zomato, Deliveroo, DoorDash, etc. rely on location technology to locate the nearest rider to a restaurant; and based on the distance from the restaurant to the address of the delivery, they can provide consumers with a precise waiting time.
Operating on location-based platforms, these sharing economy companies are continuously collecting location data of their workforces, partners and consumers. The combined total of sharing economy consumers worldwide could touch half a billion. The amount of data, and not to mention the value of intelligence that these companies generate, is tremendous.
For example, the role of location technology in food delivery business doesn’t simply end at geo-fencing. Location Intelligence is also used for gaining more useful and actionable insights.
Ashwin Irappa, Director of Product at FoodPanda, shares how they use Location Intelligence to identify and solve cuisine gaps issue. “By fetching insights of a customer, we will get to know the kinds of cuisines that are there, what restaurants are open till what time, and how far the distance is. Based on this information, FoodPanda does a cohort analysis to identify cuisine gaps, which are used to get more restaurants in the customer location, so that he can get more options.”
Hardik Batra, Country Head, Online Ordering at Zomato Philippines, says location analytics is used to predict demand based on time of the day, weather pattern, external and internal factors, and historical data. Analytics is also used to customize what a customer sees on the app. “Two different customers in the same locality will not see the same restaurants in their delivery app. We do a lot of customer profiling so customers see restaurants based on their preferences,” adds Batra.
eatigo, a popular restaurant reservation platform in Southeast Asia, uses Location Intelligence to match users with restaurants that are offering a good discount at a particular time. Location technology is also used to determine how far a customer would be willing to travel for availing a big discount. “The same restaurant offers different discounts at different times of the day, based on various factors like what day of the week it is, location, weather conditions, or if it is a dinner or lunch,” says Vinol Joy D’Souza, Vice President, Business Intelligence.
One of the pioneers of sharing economy business, Airbnb, uses Location Intelligence to provide more content and context to help users plan their vacation better. In an article published in Medium, the company introduced its knowledge graph, which helps categorize its inventory and deliver useful travel context to its users. The knowledge graph stores and serves high-quality information about entities (e.g. cities, landmarks, events, etc.) and the relationships between them (e.g. the most popular landmark in a city, the best neighborhood for tacos, etc.).
Rather than serving a specific industry, these sharing economy companies identify themselves as ‘technology’ companies. This gives them the flexibility to expand their services to wider market. On top of its consumer ride-hailing business, Uber has now ventured into food delivery, freight and healthcare business. All this by leveraging its platform assets, and its critical mass of drivers and consumer users. It’s no surprise that Uber considers its competitors to be Amazon and Alphabet.
With their own in-house product engineering team and data science team, the sharing economy companies will continuously innovate to improve their location-based platforms and services. It is exciting to see how they will further disrupt the location industry value chain in times to come.
Indoor Localization: The Next Generation Location
Indoor positioning technologies are gaining popularity in spaces such as airports, hospitals, shopping malls, convention centers and warehouses. Combined with navigation, scheduling and analytics, indoor positioning allows users to see and share their location in relation to assets, rooms, offices, shops, departure gates, etc. in real-time.
As accurate location is a key component of a robust indoor positioning system, providers are continuously looking to improve their positioning technology to the highest precision. Since no one technology is ubiquitous, innovation in this space is expected to soar.
Companies like IndoorAtlas, Blooloc, VisioGlobe, Steerpath, Skyhook, Inpixon, MazeMap, Sensewhere, Pointr, GiPStech, Wifarer, etc. provide end-to-end solutions via their indoor location platform-as-a-service. Customers can develop their own app on top of the platform with ready-to-use positioning, navigation, tracking and analytics capabilities.
In August 2019, Inpixon completed the acquisition of Jibestream, an indoor mapping and location platform provider, their second indoor location related acquisition in four months. Back in May, they announced the acquisition of Locality Systems, a provider of Wi-Fi-based positioning and analytics technology.
In February, Esri acquired indoo.rs, an indoor positioning technology startup, and subsequently introduced a new product called ArcGIS Indoors.
Interestingly, the most exciting new development in the area came from the chip industry. One of the innovations that Apple introduced in the iPhone 11 is Ultra-WideBand (UWB), a chip for precise location and distance measurements.
With such an open landscape, the indoor location market offers massive innovation opportunity; and soon expected to grow into one of the strategic areas in the location industry.