The Evolving GIS/Geospatial Industry

Daratech: The growth and evolution of the GIS/Geospatial industry. The industry’s markets and opportunities are expanding with both new buyers and sellers in the market, led at the moment by Internet search and data providers. The public imagination has been sparked by the availability of web mapping tools and the ubiquity of GPS and LBS systems.

Although the three largest players, ESRI, Intergraph and Bentley, together account for nearly half of the total software revenue, there are roughly 20 companies that each account for more than one percent of total annual software revenues. In fact, new buyers and sellers have increasingly contributed to 80% of the market’s total in 2004.

The GIS core business concentrated in three categories in 2004: market leaders; large companies acquiring or developing small GIS businesses; and specialized software companies, by far the largest in terms of number of entrants. Both existing and new players are using GIS/Geospatial technology, initiating profitable growth in new markets and application areas. Market growth has been driven by the increased availability of public and private data, which has benefited users with new applications at low incremental cost. The availability of services, applications, multimedia technology, database systems and mass-market user interfaces has increased the demand for integration services to further the growth of the GIS/Geospatial industry.

Customers are expecting more from their vendors, especially from market leaders. The industry is finding partnerships between generalist suppliers and GIS/Geospatial vendors beneficial to the market growth, as Geospatial technologies are complementing the systems integration activities of hardware and infrastructure suppliers. Hardware innovation is a new direction that the industry is continuing to undertake, where GPS technology, handheld computers and GIS software are integrated to provide up-to-the-minute data from enterprise databases for field-based personnel. This technology specialization enhances mission-critical decisions during emergency situations.

Undoubtedly, GIS/Geospatial technologies are increasingly establishing a solid network of information throughout the Internet, taking advantage of the Internet revolution by launching web sites and corporate-wide intranets. The only challenge is to determine what information will be disclosed, to whom the information will be made available, how the information will be displayed to specific users and how data will be protected. GIS software developments have undergone rapid measures to web-enable their offerings.

With the significant effect of technological innovation and marketplace change, the GIS/Geospatial industry continues to integrate and interoperate among its developing technologies and database management systems, ERP, SCM and IT infrastructure enterprises. GIS/Geospatial technology is spreading into entirely new markets and there appears to be ample opportunity for strong growth for existing and new players.

Daratech’s report, GIS/Geospatial Markets & Opportunities 2006 Publ 20060801

GIS/Geospatial Market Grew 17% in 2005 to Top $3.3 Billion; Sales Led by Growth in Data Products

Daratech: worldwide GIS/Geospatial revenue is forecast to reach $3.6 billion in 2006, up from $2.82 billion in 2004. This growth is driven by sales of commercial data products and the emergence of desktop and Internet-based systems.

Core-business revenue includes software, hardware, services and data products. The breakdown for these areas for 2004 is as follows:

Software comprised over one-half of total revenue, with revenues from GIS software vendors reaching $1.5 billion. Leading the market in software revenues were Environmental Systems Research Institute, Inc. (ESRI), Bentley Systems, Incorporated and Intergraph Corporation. Together, the three companies accounted for about half of the industry’s total software revenues. Other software leaders included Autodesk, Inc., Leica Geosystems, GE Energy, MapInfo, MacDonald Dettwiler, SICAD Geomatics, and LogicaCMG.

Data was the second largest component of core-business revenues, accounting for a quarter of total revenue, or $677 million. Sales of commercial data sets are skyrocketing and are projected to continue to grow strongly as consumers and businesses become more aware of and purchase geo-enabled devices.

Services came in third, with core-business vendors accounting for one fifth of total core-business revenues, or $536 million.

Hardware, a declining component of core-business revenues for many years, dropped again, and accounted for just 4% of total core-business revenues, or $113 million.

Utilities and Government Increase Spending

Revenues from the public sector—the two major segments being state and local governments, and federal governments—led market growth and now account for over one-third of total revenue. While federal governments were among the early adopters of GIS technology, recent trends toward devolving more responsibilities to states and localities have spurred those entities to become important consumers of GIS.

Industries in the regulated sector—utilities, telecommunications, transportation and education—once again are the largest consumers of GIS/Geospatial solutions. Utilities contributed almost half of total regulated-sector GIS revenues, while telecommunications companies accounted for a third.

Private sector growth continues to lag, as companies explore the business benefits of these technologies. Of the major industry segments within the private sector, earth resources represent the largest opportunity, accounting for over one-quarter of total private-sector revenue. Also notable is the AEC segment, driven by growing acceptance of geo-capable engineering applications.

GIS/Geospatial Markets & Opportunities 2006

Publ 20060814