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Editor-in-chief & Vice Publisher, Directions Media joe.francica@directionsmag.com  Fig.1Courtesy of Oracle We see the technology being used everywhere: Managing telecommunications, mitigating terrorist threats, and locating retail stores as well as finding the most efficient routes for supply chain management, dynamic weather analysis for storm modeling and reacting to the consumer demand to locally search for goods and services. Mapping technology is ubiquitous: in cars, on your mobile phone and on the web. And in 2008, that impact will be felt even more. Nearly forty years after some of the first GIS solutions offered by ESRI and Intergraph came to market we are seeing more companies developing software on both existing platforms as well as application programming interfaces (APIs) from Google, Microsoft and others, but also on open source technology. The result is an explosion of software, mashups, and web services as well as the adoption of new software development strategies like service oriented architecture (SOA) and Agile, just to name a few. STATE AND LOCAL GOVERNMENT MARKETING CONTINUES TO EXPAND In North America, the past year saw continued growth in the traditional markets of local and state government. The business of government is intrinsically tied to geographic information. Tax assessment, emergency response, environmental management, urban planning, and economic development are but a few of the duties of government agencies that are increasingly relying on geospatial technology to help them to become more effective and cost efficient. It is a natural association and the public is taking notice as more information is exposed through the internet to allow them to see land parcel information, demographics, and other data that assists economic development. GEOSPATIAL DATA WAS KEY IN MOVING MARKETS The location technology section saw increased market awareness in the area of data. The companies holding the key the world's digital street centerline data moved markets. NAVTEQ and Tele Atlas stood to benefit from an increased awareness of geospatial data. The result, NAVTEQ and Tele Atlas were acquired by Nokia and TomTom, respectively. Sales of personal navigation devices (PND) soared with the likes of Garmin and TomTom benefiting. As such, we came to understand just how much geospatial technology was worth. Nokia's offer to buy NAVTEQ was US$8.1 billion or nearly 14 times NAVTEQ's 2006 earnings of US$581 million. NAVTEQ also acquired Traffic.com earlier in 2007 for US$177 million. Then, last July, TomTom extended an offer of $2.5 billion to buy Tele Atlas, a 32% premium over the stock price. In March, Pitney Bowes acquired MapInfo for $408 million, or approximately 2.5 times MapInfo's 2006 fiscal revenues of $165.5 million. The acquisition will eventually result in the integration of MapInfo technology with Group 1 Software, previously purchased by Pitney Bowes (PBI), which allows the company to stake its claim in the marketing services business. PBI has the dominant brand in the postal metering business in North America and while this is a shrinking market in the age of Internet communication, the direct marketing business is expanding. PBI's acquisition of MapInfo, its largest purchase ever, will link MapInfo's marketing analysis tools with Group 1's address validation and data cleansing technology to create a location- based solutions entity. Combine the "geo" side with PBI's existing marketing groups like Imagitas and Digital Cement and PBI's strategy will create strong linkages between predictive analytics, target marketing, site selection, and lifestyle psychographics. COMMERCIAL INDUSTRY TAKES NOTICE These acquisitions had an impact on the broader market. Private industry, previously slow to recognize the value of "location," is adapting to a new business climate. Businesses are not only pushed internally to look at how to manage supply and demand but to understand the new language software solution providers are using - A location intelligent approach. Many businesses are finding that they must rely on location-based information, like those in the real estate and transportation industries. Some businesses have succeeded quite well without location technology but that too is changing as consumer products are exposing more business people to what maps can pro position with Oracle offering more integration of their business intelligence applications with Oracle Spatial and Microsoft introducing the next version of SQL Server with support for geospatial data types. With a large percentage of the North American market using either of these two relational databases to store geospatial data, both are poised to grow because of these new features and products. The Google Affect The influence of Google cannot be ignored and it is even affecting some of the larger information technology companies. For example, Oracle announced that Google Maps for Enterprise is currently available as a part of Oracle Field Service software. As with other field service applications, the maps are part of the solution that supports routing and scheduling of field service technicians as they make their daily rounds to customers. "We're putting customers in the context of a geospatial plane," said Guy Waterman, Oracle's Senior Director for Product Management. Dispatchers who use the field service application can locate mobile personnel to alert them to changes in scheduling or other needs to reallocate resources. This "enterprise mashup" is significant because it represents an example of how a visualization tool like Google Maps and a selected set of geospatially-enabled applications like Oracle Field Service have no inherent GIS solution as a component. It is a self-contained application that offers the user an industry solution without GIS software, as we know it. Oracle has many applications that can leverage the Google Maps API as well as its own MapViewer application and either may be offered to many of Oracle's existing users who need to consume location-based information. According to Oracle's Steve Garth, "Oracle Application Server MapViewer is a J2EE service for rendering maps using spatial data managed in Oracle Database by Oracle Spatial and/or Locator. MapViewer provides services and tools that hide the complexity of spatial data queries and cartographic rendering, while providing customizable options for more advanced users. MapViewer is designed to integrate with Location- Based services and applications, and supports relevant Open Geospatial Consortium (OGC) standard specifications." All of this contributes to setting up the following situation: Oracle sees demand from existing customers as well as internal product groups who want to use mapping technology. Plus, as Oracle makes huge advances in search engine technology the result is a near perfect storm that could generate huge market awareness for spatially enabled applications at the enterprise level. LOCATION-BASED SERVICES TAKE-OFF IN NORTH AMERICA Market awareness of location-based services (LBS) is driving a high adoption rate for applications on mobile devices in North America. Of the $118 million in revenue that downloadable mobile applications such as LBS, weather applications, chat/community, and personal organization tools generated during Q2 2007, LBS represented 51 percent. Networks In Motion (NIM), an LBS navigation publisher for products including Verizon Wireless' VZ Navigator, secured a 27 percent share of carrier revenue from mobile applications and leads all mobile application publishers. Unlike buying an "off-board" navigation system like a Garmin or TomTom, "leasing" your navigation system from a carrier that uses a solution from NIM or others compares quite favorably in cost. In addition, the smaller form factor for a phone versus a wider screen navigation device provides some additional convenience. This broad adoption of navigation services sets the stage for more services that involve location as the key business driver. From location-based advertising to social networking, North America can expect to be hit with a barrage of new services from which to choose. The use of real-time traffic information is gaining traction among many travelers. Real-time traffic information supports the reduction in fuel costs and helps to avoid traffic tie-ups due to sporting events, major accidents, or simply the slow downs that may be predicted on a daily basis. But the penetration of this service is very low...only about 8% of vehicles have invehicle systems and most don't have a way to accept real-time traffic. This is rapidly changing. By the beginning of 2008, thirty PND's will offer real-time traffic as a service. Companies like INRIX are using probe data to analyze traffic congestion and support local and state government transportation operation centers. In addition, having historical data collected throughout the country will allow companies like INRIX to offer predictive traffic information and wider market coverage. What's next? With the acquisitions of NAVTEQ and Tele Atlas there will certainly be more products that will shake up the market. Writing in Directions Magazine, ABI Researcher Mike Ippoliti says that, "Both deals to acquire key map data suppliers (TomTom-Tele Atlas, and now Nokia-NAVTEQ), were arranged by European companies. This is a clear indication of the more advanced, and adventurous, state of European businesses and consumers regarding LBS. There are implications for Handsets, GPS, Telematics, and for the entire LBS market…Nokia has been thinking long and hard about a Location- Based world, has a strategy in place, and is implementing that strategy. Perhaps it caught Google looking the other way (at 700MHz spectrum?), and perhaps Garmin has a Plan B, but Nokia knows where it is going and is in a big hurry to get there first." SUMMARY The GIS market is certainly evolving. There are relatively few companies that now focus entirely on providing mapping software and data. With the acquisition of MapInfo earlier in the year by Pitney Bowes, and the acquisition of Intergraph in 2006 both companies are sure to change their business models and move more into industry specific services and solutions. While ESRI remains a key player in the GIS market and companies like Caliper and Tactician continuing to offer desktop mapping software, the North American market has seen others adapt to a changing business atmosphere. Some consulting and service firms are offering open source technology solutions to clients that are looking only for a selected set of features. And it is still unclear whether geospatial web services will offer customers a clear differentiator to desktop solutions. As such, we are likely see a rapidly evolving market for geospatial solutions. We are approaching an intersection of three major ecosystems in GIS, mobile location-based services, and enterprise information technology. This collision will spawn new markets and solutions that will drive growth in 2008. Page 1 of 1
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