Finding Profits with Geographic Information Systems

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Finding Profits with Geographic Information Systems

Until recently, decision makers who needed to understand complex data involving where things were and how they related to other things had few options. They could pore over static reports and maps while trying to make sense of the information. But now, the technology of Geographic Information Systems, or GIS, makes it easier to see connections and develop powerful insights. GIS is a combination of computer hardware, software, and databases for capturing, managing, analyzing, and displaying information involving a geographic component.1

For example, maps and reports generated by a GIS can help managers understand the buying habits of households in a target market and decide where to locate new stores, how to market effectively to specific customer segments, and how to find new customers.2

As reported in Geospatial Solutions magazine,3 which covers the GIS industry, a report by Daratech, Inc. estimates worldwide GIS revenues at $3.6 billion in 2006, up from $2.8 billion in 2004. In 2004, the most recent year for which a breakdown in revenues is available, over 50 percent, or $1.5 billion, came from software. The top three companies, ESRI, Bentley Systems, and Intergraph, accounted for half of the software
revenues.

Among the other GIS software firms are Autodesk, Leica Geosystems, GE Energy, MapInfo, MacDonald Dettwiler, SICAD Geomatics, and LogicaCMG.

The second largest source of GIS revenues was data, which provided 25 percent of total revenue, or $677 million. The demand for commercial data is growing and is expected to continue rising as consumers and businesses discover new geo-enabled devices.

The third highest revenues came from services, at one-fifth of total GIS revenues, or $536 million.

Meanwhile, hardware continued to fall as a share of overall revenues as it has for several years, slipping to a mere 4 percent, or $113 million.

Daratech found that the fastest growth in overall GIS revenues came from customers in the public sector, and now account for more than one-third of total revenue. Much of the early growth in the industry came from federal agencies, which were early adopters of the technology. Now, as the trend toward decentralization speeds up, individual states and municipalities are key customers.

The biggest customers are organizations in the following industries:

  • Utilities
  • Telecommunications
  • Transportation
  • Education

Demand for GIS is building more slowly in the private sector because many companies haven’t yet discovered how they can benefit from using the technology...

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