September 04, 2006
About Daratech's GIS/Geospatial Public Sector Software Market Forecast
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Susan Smith - Managing Editor

by Susan Smith - Managing Editor
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Message from the Editor -

Welcome to GISWeekly! Daratech
reported recently that the public sector spend on GIS/Geospatial software “will surpass the regulated sector for the first time in 2006. In a discussion with Monica Schnitger, senior vice president of market analysis at
Daratech, GISWeekly learned more about this trend and what is fueling the change worldwide.

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Industry News

About Daratech's GIS/Geospatial Public Sector Software Market Forecast

by Susan Smith

reported recently that the public sector spend on GIS/Geospatial software “will surpass the regulated sector for the first time in 2006. The sectors are close, with public projected to have a 39% share of all GIS/Geospatial software spend by year end as compared to 38% for the regulated sector. The growth in the public sector averaged 15% per year for 2004 - 2006, while the regulated sector averaged 7% for the same time frame,” according to the press release.

State and local governments, plus federal governments comprise the main segments within the public sector. In the U.S., interest in geospatial is fueled by homeland security and federal government-sponsored Landfire and e-government projects. Federal governments were early adopters of GIS, and continue to be big consumers, however, the federal move toward devolving responsibilities to states and localities have given those governments the imperative to adopt GIS as well. Daratech's estimates indicate that public sector revenues accounted for 37% of GIS/Geospatial software revenues in 2004, of $531 million. Of the public sector revenues, state and local governments accounted for 67%, while
33% was from federal governments.

Within the regulated sector, according to the press release, industries that are major consumers of GIS include utilities, telecommunications, transportation and education. Of these, the first two are by far the most significant. Utilities contributed 50%, or $278 million, of total regulated-sector GIS/Geospatial software revenues in 2004, while telecommunications companies accounted for 28%, or $155 million. By comparison, transportation accounted for 13%, or $71 million, and education for 9%, or $50 million.

In an earlier report this year, Daratech's
GIS/Geospatial Markets & Opportunities 2006, it was stated that “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 [in order of market position, eds note]: 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.

Growth is seen worldwide. For example, in the United States, the public sector interest is fueled by homeland security and the U.S. Federal government-sponsored Landfire and E-government projects. Europeans are moving quickly in this direction as a result of e-government initiatives and other imperatives.

In a discussion with Monica Schnitger, senior vice president of market analysis at
Daratech, GISWeekly learned more about this trend and what is fueling the change worldwide.

GISWeekly: What types of GIS/Geospatial software are included in this forecast - does it include applications for Google Earth or Virtual Earth?

Monica Schnitger -- We look at commercial sales of analytical applications and their underlying databases (where we can). We were unable to find commercial applications built on top of either Google or MSFT that were big enough to uniquely count. It's an incredibly interesting phenomena, though, as these technologies bring GIS/Geo to millions of people. Most use it to try out the technology, inventing all sorts of interesting (and sometimes weird) applications; as far as we could tell, though, it has yet to make it to the realm of large, commercial success, however.

GW: What do you think is fueling European government interest in geospatial?

MS: Lots of e-government initiatives, in part mandated by the EU harmonizing efforts. [Vendors suggest that European customers started later and are more accustomed to desktop technology, they have been quicker to zero in on what they want instead of building complications into their procurements. Throughout the past decade, a number of vendors have also targeted opportunities in Eastern Europe connected with infrastructure renovation management - press release]

GW: What is meant by "building complications into their procurements?"

MS: I believe this referred to the wholesale infrastructure change that used to be required for large IT implementations. Since GIS/Geo can run on desktops or be served to desktops of Web browsers, existing PCs and infrastructure can (usually) be used, which simplifies the procurement process and means it can often come in under ceilings that require massive approval processes.

GW: Are European governments interested in specific aspects of Geospatial over others, for example do you see more interest in GPS, location based services or remote sensing?

MS: I think the European acceptance of LBS is far ahead of the US and I haven't heard of the same kind of stress over GPS locators in municipal vehicles that I've heard here. I haven't heard as much about remote sensing -- but we don't have statistics to back this up, so it's more anecdotal.

GW: Are European local governments also interested in Geospatial?

MS: Yes, it appears to be across all layers of government. The usual issue, at the local level, is that government mandates may be unfunded at the local level.

GW: Are there any stats on interest or use by Chinese and the Pac/Rim governments?

MS: We don't have country by country information on government uptake in any region, so the fact that we don't have it for China is not unusual. All of our data suggests that uptake in Asia in general is slower than in North America (commercial as well as governmental). Interest in Japan is huge - especially for the personal device applications, but we don't have specific information on governments.

Top News of the Week

Franson Technology of Stockholm, Sweden, has released Franson GpsGate 2.0, a Windows and PocketPC utility that lets you run many GPS applications using a single GPS. New features in GpsGate 2.0 are the ability to share a GPS over ActiveSync, or Bluetooth. Support for Garmin software and GPS receivers. And GpsGate 2.0 will let you connect Google Earth to a normal GPS, something that otherwise isn't possible.

Serious GPS users often have several applications that they want to run simultaneously. Without Franson GpsGate, it's necessary to shut down one application before beginning another. With Franson GpsGate, you can share one GPS among several applications. Simply create additional virtual serial ports, and any GPS applications can connect to them.

Blue Marble Geographics is pleased to announce that Microsoft Corporation recently licensed the GeoCalc.NET software developer toolkit to enhance and expand the data processing capabilities required to create Virtual Earth. Blue Marble's coordinate conversion technology is used worldwide by thousands of GIS analysts at software companies, universities, oil and gas companies, civil engineering, surveying, technology, enterprise GIS groups, government and military organizations.

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-- Susan Smith, Managing Editor.


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