After decades of internal organic growth, mapping giant Esri has gone on a shopping spree of late. The fact that the company has not grown through acquisition much in the past, and even indicated an aversion to such moves, clearly isn’t of relevance in today’s pace of change. Without these acquisitions, Esri would have missed significant market opportunities, and due to increased flexibility with their software platform, the integration of these tools with the Esri toolset has made the technical end of integration much easier to handle. These moves also speak to the economic strength of the private company that has been able to grow steadily without the need to focus on investor return.
Each purchase has been a strategic move that has addressed an area of expertise that wasn’t covered either by technology or through their established business relationships. On the eve of the 2012 Esri International User Conference it seems fitting to recap the acquisitions that have occurred since the last annual event, and to speculate on what might be forthcoming.
3D City Models
Esri acquired the company Procedural along with their CityEngine modeling software last July, concurrent with last year’s annual user conference. With this acquisition, Esri entered the 3D design and city modeling space in force, further blurring the lines between what the CAD, GIS and BIM toolsets are capable of in terms of city modeling, 3D creation, visualization, and 3D analysis.
With this bold move into 3d modeling at the city scale, Esri showed they were serious about the GeoDesign concept and the role of GIS for design and planning our next generation of cities. The rules-based nature of CityEngine makes it possible to quickly change large planning models by changing parameters, providing an evolutionary approach to digital design and visualization. The growing move toward Smart Cities, along with increasing urban populations, means a huge market for geospatial tools in planning and infrastructure design, and exciting times ahead for a convergence of planning, drafting, engineering and design tools.
In the business space, Esri acquired SpotOn in October of last year in order to create a direct connection with IBM’s Cognos business intelligence software. This further foray into the location intelligence market complements their own Business Analyst software, and provided a link to a very large business market that still has a great deal of room to grow beyond site location exercises.
Esri has further extended the business connection through their recently released Maps for Office software that links directly into Microsoft Excel and Microsoft PowerPoint to create interactive maps for the average business user. These two moves combined provide a blueprint for rapid expansion, tapping into large established user bases at both the enterprise and desktop level. Esri gains great exposure with both of these moves. While the extension with IBM is significant, the fact that their long-time partner Microsoft has allowed them access into their desktop environment is of greatest importance as it means access to hundreds of millions of desktop software users who will soon understand the ease and power of mapping their business data.
Developers and the Cloud
With the acquisition of GeoIQ earlier this month, Esri added a web platform that is developer friendly. While the announcement spurred a lot of blowback from those that have embraced the “neogeographer” culture at GeoIQ, the acquisition makes sense from both company’s perspectives.
Esri gains functionality for their cloud-based GIS vision, along with an elegance of user interface. GeoIQ founders gain access to the broader audience that will help feed their vision of spatial analysis for everyone. The user community ultimately wins from this too as there are tools and an approach here that aims ties into greater data transparency and data access. The GeoCommons platform has an accessible API that has gained great exposure in the federal government and NGO community. The developer-oriented approach also plays into the ongoing competition to extend mapping functionality with the likes of Google, Apple and Amazon. While Esri is making inroads in web mapping functionality with ArcGIS Online, this added environment brings a powerful complement.
The most recent acquisition of Maptel just this past week adds mobile application development tools for better field data collection. Mobile is an established strategy that is echoed by every serious software player that sees the growing trend for access to tools and data anywhere through increasing network connectivity.
To recap, there have been advancements through acquisition in 3D, business intelligence, desktop tools, web development, and mobile platforms. Areas of advancement and disruption for GIS functionality in these segments include streamlining LiDAR inputs to models, speeding access to data (including real-time sensor feeds), assisting the mining and analysis of big data by harnessing cloud computing capacity, automating data acquisition from drone platforms, and adding augmented reality to fieldwork. Each of these opportunities outlined are in fast-developing areas with little or no Esri business partner activity. Esri may choose to establish new functionality themselves or get a jump via acquisition. Regardless, it's exciting to see such a robust private company flex it's muscles to accelerate innovation and speed up their vision.