January 05, 2009
Welcome to 2009 – GIS Going Forward
Please note that contributed articles, blog entries, and comments posted on GIScafe.com are the views and opinion of the author and do not necessarily represent the views and opinions of the management and staff of Internet Business Systems and its subsidiary web-sites.
Susan Smith - Managing Editor


by Susan Smith - Managing Editor
Each GIS Weekly Review delivers to its readers news concerning the latest developments in the GIS industry, GIS product and company news, featured downloads, customer wins, and coming events, along with a selection of other articles that we feel you might find interesting. Brought to you by GISCafe.com. If we miss a story or subject that you feel deserves to be included, or you just want to suggest a future topic, please contact us! Questions? Feedback? Click here. Thank you!


Welcome to GISWeekly! Welcome to 2009! This year we will truly looking forward, not just as GIS folks but as people looking forward to a new American presidency and subsequent and much needed changes.

GISWeekly examines select top news each week, picks out worthwhile reading from around the web, and special interest items you might not find elsewhere. This issue will feature Industry News, Top News of the Week, Acquisitions, Agreements, Alliances, Announcements, Financials, New Products, Around the Web and Events Calendar.


GISWeekly welcomes letters and feedback from readers, so let us know what you think. Send your comments to me at


Best wishes,

Susan Smith, Managing Editor


Industry News

Welcome to 2009 – GIS Going Forward

By Susan Smith


Over the holiday season, I’ve been noting the various news coverages on what industries are expected to survive the recession. How companies survive the recession is another interesting topic --are they laying off hundreds of people or are they cutting back?


We are painfully aware of the dilemma of the banks and the auto industry at this point, and many industry pundits suggest that there won’t be much growth in banking or banking related industries such as mortgage and non-mortgage loan brokers for some time. Scott Shane A. Malachi Mixon III, Professor of Entrepreneurial Studies at Case Western Reserve University, has done some research on the various recessions over the past century and has come up with some interesting data about recessions, as follows:


Those industries that will show growth during this recession include: accident and health insurance industries, offices of health practitioners, and business consulting. He said that even during a recession, some industries grow “at a gazelle-like pace across a variety of different dimensions.” To look at past recessions shows that very few industries that do well during one recession will do well during other recessions. However, those industries that lean toward being “recession-resistant” are insurance, health care and consulting.

As of December 25, preliminary data gathered from Spending Pulse showed weak sales over the holiday season, which was attributed to the troubled economy and winter storms across the country. Total retail sales were down between 5.5 percent and 8 percent from a year ago. Interestingly, an area of retail that reported strong sales was in the hobby and crafts industry, where retailers were finding people who were making more of their gifts this year, rather than heading off to Best Buy for the latest electronic toy.


How does this impact the geospatial industry?


Geospatial is now an industry that has become pervasive, and trickled into many different industries – including insurance, banking, retail, health care, consumer products, in addition to the traditional land and space-based and government uses for which it originated. It is unlikely to geospatial will go away, but it may change and become lean and specific to address economic changes.


One company doing just this is Pitney Bowes MapInfo, producers of demographic map software which is actually used to track spending, among other things. The company is cutting 8 percent of MapInfo’s global work force of 1,600, or 128 full time workers worldwide. Approximately 10 percent of the cuts will take place at MapInfo headquarters in the Rensselaer Polytechnic Institute Park in North Greenbush, New York.


The layoffs are an attempt to lower operating expenses by approximately 7 percent by job cuts and other measures.


This is interesting because the company was well positioned to add 50 new workers to that location only 13 months ago, plus planning to relocate 120 sales and finance workers from Colonie facility, now closed.


What prompted the layoffs was that customer’s credit concerns led to delayed purchases, primarily in the area of software and production mail businesses. According to company spokesmen, some customers have not renewed their licenses or expanded their licenses as expected.


Pitney Bowes’ customers are some of the hardest hit by the recession – in the areas of banking, retail, and publishing. MapInfo’s market simulation software is critical to companies such as Home Depot, Cleveland-based KeyBank; Glendale, Calif.-based IHOP; and North Andover, Mass.-based Eagle-Tribune Publishing Co. for targeting locations for new retail branches, restaurants or circulation growth.


Pitney Bowes ended the third quarter with a net income of $98.2 million, down 23.1 percent from the same period of 2007. Its software arm posted a 7 percent increase in revenues, but sales fell flat when excluding the impacts of acquisitions.


Charles Foundyller, CEO of Daratech, said that what differentiates this recession from past ones is that previously, the GIS and CAD industries “shrugged off” the recessions, with little or no effect. Today, the closing of auto manufacturers and possible “bail-outs” are causing a ripple effect into the GIS industry, which provides location technology for in car navigation systems, fleet tracking systems and other uses. The geospatial industry is also now a vital part of retail, a ubiquitous element in personal navigation devices (PNDs), smart phones and even in video games and other entertainment. By entering the device market, it has entered mainstream, and is now available at
Wal-Mart, Target, Best Buy and a host of other stores. This Christmas season, sales of electronics and appliances were down 26.7%, according to SpendingPulse.


Serving Many Markets


If geospatial and GIS were entirely dependent upon the consumer market, we may be in for some very rough times indeed. However, GIS serves numerous markets today, so that although we will see cutbacks in some areas such as retail, banking and consumer, the technology remains critical to government, and in particular, in homeland security and geospatial intelligence. The need for geospatial technology is huge not only in the area of security but in addressing real issues of great magnitude such as the environment, global warming, agriculture, and infrastructure. These issues are of such paramount importance to the health of our planet and inhabitants that we can no longer ignore them,
and they will create jobs rather than trim them in the long run.


Creative Work Options


URISA's members are primarily city/county GIS professionals and consultants and vendors, and with government budgets being cut, consequently the organization’s members are being affected. Hilary Perkins, president of URISA said that “while some local governments will be cutting back services during the upcoming difficult economic times, some sectors may be well positioned to do well should an infrastructure-oriented economic stimulus package move forward. For example, regional planning authorities typically pass through federal funds for infrastructure projects, from initial design, to environmental impact studies, to air and water quality monitoring - for both roads and transit.
Many local government departments - such as public works or engineering - typically are involved in the process as well. This could also be true for State Departments of Transportation. There are many opportunities to use geospatial technologies in these types of projects.”


In past recessions, the first thing to go were the workers. However, this time around, not all employers are cutting their staff. Some, in an effort to avoid or limit layoffs, are introducing options such as unpaid vacations, fewer-day work weeks, wage freezes, pension cuts and flexible work schedules. Employers who use these options are still cutting their labor costs, but they want to hang onto their work force in the event that times change and the economy swings upward.


To hire again after the recession is over would be more costly in the long run. Jennifer Chatman, a professor at the Haas School of Business at the University of California, Berkeley, said in a recent article, “Organizations are trying to cut costs in the name of avoiding layoffs. It’s not just that organizations are saying ‘we’re cutting costs,’ they’re saying: ‘we’re doing this to keep from losing people.’ ”


Summary


Without available credit for acquisitions and R&D, the GIS market will definitely be impacted until money is made available. However, anyone who has been to a trade conference recently or read GIS news will see that geospatial technology innovation has not slowed down, but rather, it attends to the issues at hand and looks to the future. Vendors are offering products that if they work as promised, offering greater efficiency and accuracy to address real issues, there will be a market for them. A new spin is being added to products: during the economic downturn, you will need to save money, have greater efficiency, be able
to make use of your data, etc. The good news is that products that allow more work to be accomplished by one individual, products that increase accuracy, clean up data, provide more accurate data, will always be in demand to solve real world problems.


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-- Susan Smith, GISCafe.com Managing Editor.


Reviews:
Review Article
  • A message of hope January 06, 2009
    Reviewed by 'Greg Newkirk'
    While these are tough times and many of us are worried, this article provides insights in how to weather the economic storm. It is clearly written and upbeat in a down time.

      2 of 2 found this review helpful.
      Was this review helpful to you?   (Report this review as inappropriate)


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