A Picture Is Worth a Billion Dollars

The GIS industry is going into full spin as the technology migrates from government mainframe to commercial desktop

Among the many computer-based technologies that trace their origins to the government marketplace, geographic information systems is today one of the region's most innovative but lesser-known applications.


Over the past 10 years, this unique, 30-year-old technology has evolved from complex mainframe-driven applications into desktop point-and-click software.

GIS is a technology that can capture geographic data from a satellite and -- through software -- allow the user to manipulate the data and analyze it. The image that is generated is shown as a digital map that contains several layers of text and graphics. The uses of the technology are endless. Utility companies use it to track lines and pipes, political research firms use it to analyze regions of the country, the government uses it for defense planning and environmental initiatives.

The migration of GIS and its many applications has propelled the industry to grow to $850 million worldwide in 1996. That number could jump to $1.4 billion by 1999, according to Frost & Sullivan, a research firm in Mountain View, Calif. Federal, state and local government users represent 45 percent of that pie, and thousands of U.S. companies are now cashing in on the profits.

Industry executives and analysts say the market has yet to reach the full potential of GIS applications, and the industry is just waiting to take off in several different directions. GIS is now being used on the Internet, and industry regulations are being broken down while certain standards are being implemented to allow for easier use of the technology.

As the overall GIS industry grows between 15 and 16 percent per year, analysts expect federal sales to continue to grow as agencies realize the potential of the technology. According to Daratech Inc., a research firm in Cambridge, Mass., the federal government spent $29.8 million on GIS software in 1995. That number increased by 12.6 percent from 1994. State and local governments are expected to grow to $840 million by 2000.

Business leaders and industry analysts find it hard to predict where the overall industry is going in such a new market. Desktop mapping and GIS on the Internet may be the secret to success for some companies.

THE HISTORY

According to analysts, the industry started in Canada in the mid-1960s when the Canadian government wanted to manage land inventory data. In 1969, the industry took off with the founding of two giants -- Intergraph Corp. of Huntsville, Ala., and Environmental Systems Research Institute of Redlands, Calif.

GIS is also thought of as a technology that evolved out of defense. It has its roots in mapping and satellite technology used by the National Aeronautics and Space Administration and the U.S. Department of Defense, simply because GIS and mapping technology was mostly limited to programs funded by defense and space projects. Much of the declassified technology, along with the emergence of the integrated chip, gave way to private industry developing graphics and later GIS applications. These applications moved into mainstream business in the early 1980s.

From the beginning, the limits of computer equipment had an impact on the growth of the industry. A GIS system uses large amounts of data -- including graphics and text -- that has to be stored, selected, moved and manipulated. The only computers capable of doing that were mainframe and miniframe computers. GIS systems were expensive, complex and were run by a handful of trained specialists.

"GIS is becoming a common application through companies. It used to be a magician's software that only experts could use," said Ana Pardo, a GIS analyst for Frost & Sullivan.

As computers gained more power and speed, and storage techniques and software architecture improved, GIS firms were able to take advantage of the new market. GIS technology is still expensive and complex, but migration from the mainframes to desktops has opened up a lucrative market for GIS.

Companies are looking to the government as their biggest client because the applications within the government are endless.

An estimated 80 percent of the data that government agencies manage is geographically related. Government agencies use GIS software and applications to analyze things like increasing populations, the environment, deteriorating infrastructures, crime and dwindling resources.

The largest government customers of GIS applications are the U.S. Geological Survey, a bureau of the Department of Interior responsible for mapping the United States, the Defense Mapping Agency, which maps the world outside of the United States for military purposes, and the National Oceanic and Atmospheric Administration, responsible for mapping all U.S. waterways.

However, almost every government agency has found a need for GIS applications. The U.S. Department of Health and Human Services can use GIS technology to track disease in certain locations of the country. The EPA uses GIS to track environmental hazards. The Department of Transportation uses GIS to manage road networks, track accidents and monitor pavement conditions.

PIECE OF THE PIE


The advantage for the suppliers of the GIS market is that there are many pieces that make up the whole. There are the software and hardware companies like MapInfo Corp., based in Troy, N.Y., that make the information readable. There are the satellite companies like Spot Image Corp. in Reston, Va., that retrieve the information, and there are the database management companies like Oracle Corp. Government in Bethesda, Md., that store the data.

Indus Corp. of Vienna, Va., a GIS software development company, recently established a federal division to take a piece of the federal spending on GIS. In July 1996, the 8(a)-certified firm acquired Vigyan Inc.'s federal programs division in Hampton, Va. The acquisition gave Indus, which started attracting government clients in 1994 when it entered the 8(a) program, access to customers like the Department of Justice's criminal and civil rights divisions, as well as the Environmental Protection Agency and the Department of the Treasury. Partnerships with integrators like Science Applications International Corp. in San Diego also helped the company attract government business.

With Indus' revenues expected to reach $4 million this year, the profits of the GIS market have just begun, says Shiv Krishnan, founder and president of Indus.

Today, only about 5 percent of potential GIS applications are being used, he said. "The surface has just been scratched."

George Korte, executive marketing manager of Intergraph Federal Systems in Reston, Va., agrees. Many users of GIS technology don't realize the full potential of the application. He explains that there are three tiers of GIS users. There are the experts in GIS, there are people who analyze geographic information daily and there are people who want to look at data from time to time. He says the largest group of GIS users is the third tier who just want to look at information organized in GIS format occasionally. "The market hasn't gone to the full potential of users," said Korte.

Intergraph, one of the pioneers of the industry, has annual revenues of $1 billion. Some 16 percent or $160 million of that total comes from federal contracts. The federal division of Intergraph, which was established in 1988, has 950 employees out of Intergraph's 9,000 total. The division offers hardware, software, support services and maintenance to government customers like the DoD, the EPA and the Department of Interior.

Korte says the driving force behind the federal market for GIS is the establishment of standards within the industry. In April 1994, the Clinton administration established the National Spatial Data Infrastructure to support public and private sector applications of geospatial data in such areas as transportation, community development, agriculture, emergency response, environmental management and information technology. The order calls for each government agency to make available all new geospatial data that it collects and make it available to the public through the National Geospatial Data Clearinghouse. The clearinghouse was established under the order as a distributed network of geospatial data producers, managers and users linked electronically. The order was passed to make GIS data more accessible and more practical.

The Open GIS Consortium Inc., a non-profit consortium in Wayland, Mass., made up of government, industry and education leaders, has been working for three years toward integrating geospatial data and geoprocessing resources into mainstream computing, and widespread use of interoperable geoprocessing software and geospatial data products through the Internet. The group's mission is implemented through an industry forum that promotes its initiatives to government and industry officials.

Oracle Corp., a database developer and management company based in Redwood Shores, Calif., opened a Spatial Data Option Solutions Center earlier this year to help establish GIS standards. The group is made up of seven vendors, including Intergraph Corp., MapInfo and ESRI. Engineers from the companies will work together to marry the GIS software vendors with the database management companies. The center's purpose is to tighten integration with partners of the group.

According to Kirk Fisher, technical manager, geospatial solutions for Oracle Government, GIS software vendors in the past have provided their own management solutions, which made for storage formats that were not compatible. GIS data is very difficult to store, and a commercial database capacity has emerged in the last 10 years.

"The evolution of map data into relational databases has just begun," said Fisher. Oracle has started to penetrate this trend with its software that provides for storage and access in its relational database. Government demand for GIS solutions has increased due to data becoming more accessible, he says.

However, the industry is moving rapidly from the government, and GIS companies are looking into cyberspace for their next stomping ground.

ON TO THE INFORMATION SUPERHIGHWAY


The Internet is offering GIS suppliers and users a chance to reduce their hardware and software costs. It also opens the market for suppliers to attract more customers through the Internet's wide accessibility. How much of a boon Internet is to GIS suppliers remains to be seen, but there is some significance to the trend.

"A number of software companies are [incorporating] interfaces for doing GIS across the Internet [into] their software packages," said Don Hemenway, vice president and publisher of GIS World, an industry magazine based in Fort Collins, Colo.

ESRI is leading the industry onto the Internet. In one of the largest federal GIS contracts, the $171 million company is offering a GIS-based imagery search tool on the World Wide Web as a subcontractor for Hughes Information Technology Systems in Landover, Md.

In March 1993, Hughes was awarded NASA's EOSDIS Core Systems contract, worth $826 million. EOSDIS is a series of satellites geared to monitor the Earth's environment and understanding of global climate change that will be in use in 1998. Hughes, which is building the network for the EOSDIS program, chose ESRI and the University of New Hampshire to build a collaborative prototype to be used on the Internet. The prototypes feed cutting-edge technology into a system to give scientists and students who will use EOSDIS a chance to feed ideas into the design. The team has put the prototype on the Web to study how students and scientists manipulate and analyze the data. ESRI and the university are hoping NASA will gain insight into the best design for the network that will support the EOSDIS program.

The site will be available in fall 1996 and will allow users to interface with a dataset of the Amazon region. According to Jeff Masek, research scientist for Hughes, this project is one of the first Web sites that will offer users the ability to interact with GIS information. He says current GIS Web sites don't offer users the ability to interact with digital maps and offer advanced spatial functions.

"The vast majority of GIS systems on the Web do not look real," said Masek. "The technology is just not there yet to provide spatial functions on the Web."

Masek says the market for GIS applications on intranets is even larger because of bandwidth constraints on the Internet.

Fisher says the GIS landscape is changing and there is a demand to move GIS data into a broader enterprise organization.

"GIS has always been a database problem," said Fisher. "We now have the technology to move into an enterprise database."

DepartmentProgram NameStatusValue

AgricultureIntegrated Information Management ProgramAwarded$276,000,000

Air ForceCloud Depiction and Forecast System IIAwarded$12,700,000

ArmyWarfighter Information NetworkRFP goes out October 1996$4,500,000,000

CommerceSoftware Support for AWIPS Development at Awarded$5,848,000

The National Centers

DefenseInmarsat Digital Usage ServicesAwarded$3,000,000

DefenseNuclear Weapons Effects for Tactical Awarded$5,525,000

Battlefield Engagement Modeling

DefenseConsolidated Systems Engineering SupportSource Selection*$50,000,000

EPAGeographic Information SystemAwarded$21,000,000

EPAADP Information Resources ManagementRFP goes out in 2000$50,000,000

Services (Recompete)

EPAFacilities Administration and Information Awarded$71,700,000

Resources

InteriorGeographic Information Systems SoftwareAwarded$23,800,000

InteriorTechnical Support Services (recompete)RFP goes out in 2000$30,000,000

InteriorEarth Resources Observation System DataAwarded$48,000,000

Center

InteriorAutomated Land and Mineral RecordsAwarded$403,000,000

System Modernization

NASAMission Support ServicesAwarded$15,503,000

NASAEarth Observing System Data InformationAwarded$500,000,000

System

TransportationInstrument Approach Procedures AutomationAwarded$8,200,000

Procurement II

TransportationWeather and Radar ProcessorAwarded$72,500,000

TransportationGPS Wide Area Augmentation SystemSource Selection$475,000,000

* Source Selection indicates the stage after bids have closed and before the award has been made. SOURCE: Input


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