Sep 18, 2013

Business value of geospatial industry

Estimated Article Reading Time: 2 min.

(Sept 17, 2013) The past decade has brought significant value to several vertical industries, making geospatial one of the fastest emerging technology sectors. In addition to market trends which forced the geospatial industry to innovate, converge and integrate with business processes of promising industries like manufacturing, plant design and buildings, it was the visionary leadership of Trimble, Hexagon, Topcon, Bentley and Esri that initiated the process of evolving geospatial workflows and solutioncentric approach that proved to be instrumental not only in expanding the size of geospatial business but also brought forward its unique economic value propositions to the forefront, opening avenues for further development.

We at Geospatial Media, have not done any scientific study to measure the market size of geospatial industry. However, based on our formal and informal interactions with the key stakeholders and analysis of existing reports, we strongly believe that the size of global geospatial industry is very close to $100 billion and it is growing at an annual growth rate of 10-15%. The total revenue of top 10 geospatial technology companies is estimated to be about $10 billion. Additionally, the next level of technology companies contributes almost similar revenue of $10 billion. Since most of the technology companies trade their software and hardware products through distributors/ resellers and partners, this segment accounts for about 20- 25% additional business opportunity for the market, pitching the total technology business at around $25 billion. These technology companies leverage a much larger volume of business through their solutions and service providers. For instance, Esri’s 2012 revenue through software sales is estimated to be $1.4 billion.

Dangermond says Esri software leverages somewhere between $16 and $19 billion in sales of data, hardware and services. Following the above, on a very conservative estimate, technology companies put together leverage about $60-75 billion, making the total closer to the $100-billion mark.

While adding to the actual market size, one needs to take into account the revenues of national mapping, cadastre and space agencies. According to an estimate from the Chinese government, the total business of the geospatial market in that country is $31 billion. In fact, several progressive governments, including Japan, South Korea, Canada, US, UK, Germany, India, Brazil and China, have been investing heavily in geospatial technologies. Providing another dimension to the geospatial market size, a recent Google-commissioned study estimated the global geo-services market to be between $150 billion and $270 billion.

In all probability, this phase of re-organisation of the geospatial ecosystem is over, at least for a few years. Leading geospatial players have demonstrated their business urge and willingness to continue with technology acquisition, enabling productisation of solutions. One can very well see the alignment and re-alignment of companies featuring in different categories of geo-system with different emerging groups and alliances.

The next phase of re-organisation will began with the beginning of the revival of the world economy and we could expect the entry of very large business houses, not necessarily with the purpose of capturing existing geospatial business, but to utilise and harness the true value of geospatial ability in industrial processes and economic activity.

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