The latest round of Google Maps innovation, with map updates that mirror the crowdsourced data approach of OpenStreetMaps (OSM), as well as the addition of parcels (a typically high-priced data set) has many data providers worried about their livelihood. The larger question here, beyond just Google’s moves, is whether online geospatial data want to be free.
Free and open access to information and data form the underpinnings of the success of the Internet. While information in the form of written content has predominantly been free for some time, the same hasn’t been true of all online information. There are successful business models where people pay for digital content (iTunes, Netflix, Amazon for e-books, etc.). However, there are growing trends of richer and more accurate geospatial data available for free access and manipulation online, which begs the question of whether licensed data has a future for online applications.
Free Data Sparks Fee Data
Without good data the value of a GIS is very limited. In the United States where free data has been supplied by the government for a long time, the use of GIS spread much more rapidly and deeply among a much larger variety of application areas than in parts of the world where governments charged money for data. Free data sparked much greater adoption and innovation and gave rise to entrepreneurial companies that were able to make a business enhancing free government data in order to help companies make the next leap forward in improving the utility of their systems.
The foundation of free data provides a baseline that companies can exploit to enhance that data for licensing. For example, a free national road network was a start, but roads change constantly and free data didn’t contain important navigational details such as one-ways or the complexities of tricky intersections. For in-car navigation these details are crucial, so companies set out to constantly map and monitor roads to expand the use in vehicles. In this case, device companies are the ones to license the data because without accurate information navigation devices are useless or even dangerous.
There are a number of other free to fee data enhancements in the geospatial space. Free U.S. Census Bureau information is enhanced by companies that develop consumer profiling tools that are useful to marketers. Free digital elevation models that add terrain to flat maps has sparked an effort to map the elevation of the entire globe more accurately. Free and open Landsat imagery has sparked a number of companies to interpret and package that data to users. In each case the added detail or global coverage provide enhancements that people are willing to pay for and data licensing businesses have taken off.
Always Room for Enhancements
The base map of free data continues to be enhanced, and free map platform companies continue to add data sets that others pay to license. This constant shift of better free data makes it hard for those companies that build enhanced data for licensing. Invariably though, there is room for better data accuracy, currency and fidelity that organizations are willing to pay for.
It does cost considerable money to capture accurate geospatial data. The tools needed to capture high-quality data are expensive, and the the skills to make sure the data is accurate and usable are specialized. A company would pay much more to add the capacity to create such data in-house, so the licensing model works well.
There’s also the issue of coverage and consistency. Local or regional high quality data sets are of little use for a company that needs consistent high-quality data for their countrywide or global business. This need for larger datasets has created the impetus for the consolidation of smaller regional companies into larger data providers that capture geospatial data on broader scales and take advantage of the efficiencies of scale.
Open Adds Sharing
Geospatial technology is only as good as the data that underpins it, and the more high quality data in a system the better the system is at aiding decision making. All organizations have boundaries to the information they collect, but operational questions often expand the data they want access to. If others within the user community have created the data that they need, then there’s an incentive to share out of mutual benefits and the camaraderie of the practitioner.
Where data sharing takes place, the data licensing company loses out on an opportunity. And, when sharing is initiated, there’s an increasing incentive for others to share their data, which leads to an increasing amount of data available for free. In order to stay on top of the increasing free and shared data, the successful data licensing company needs to stay in advance with better base map data that all practitioners need or enhanced data that appeals to a large group of practitioners. Users will commonly share domain-specific data sets, which leaves data gaps for both coverage and analysis, leaving room for data licensors .
Free Hurts Fee
Data licensing only works when there’s continued demand for the content. As geospatial data businesses have grown larger they’ve formed barriers for entry for smaller companies that might wish to enter the market, and have somewhat cushioned themselves from competition. But their business model is vulnerable with any new data collection scheme that dramatically drives down collection costs or greatly enhances the quality of available data.
The creation of OpenStreetMap was made possible by the high licensing costs of Ordnance Survey data in the United Kingdom. There the fees formed a barrier for wider use that was tackled in an innovative way by entrepreneurs who have harnessed the crowd to create high quality data that is made freely available. While Google continues to license data, they obviously understand the phenomenon and value of the army of volunteers who create data for free based on simply the rewards of participation. The benefits that OSM founder Steve Coast asserts — faster, better and cheaper — weren’t apparent until this movement recently reached critical mass, and the crowdsourced model certainly poses problems for data licensing companies.
When the leading web mapping portal keeps adding richer data sets that are made available for free mashup manipulation, there are consequences to fee-based geospatial data providers. The constant shift of what’s available for free means that the business potential for fee-based data will always be shifting. While there will continue to be opportunities for licensed data, the data players will constantly need to be a step ahead of data that’s made freely available. They’ll need to constantly enhance their offerings to stay at the cutting edge with data that has added value, and always with an eye to the most efficient means of collection to be certain their profit margins stay positive.
For practitioners and decision makers more free and open data is a very good thing. The continued addition of crowdsourced or shared data means that the geospatial system of systems is growing in quality and complexity to help us better understand our world. However, we’ll need to continue to make room for the geospatial data licensor by providing margins for revenue. It is only with the promise of reward that there is innovation, and innovation speeds advancement toward our shared goal of a continually improving model of our complex planet.