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Brian-L.-Bullock_TN.gifIntermap Technologies was one of the first companies to realize the value of collecting and archiving geospatial data for large geographies, and the first and only to collect high-resolution elevation data on a worldwide scale. V1 Magazine editor Matt Ball sat down with Intermap’s CEO, Brian Bullock, to discuss the company’s history and business plan, as well as the future of 3D modeling.

Bullock_Brian.gifIntermap Technologies was one of the first companies to realize the value of collecting and archiving geospatial data for large geographies, and the first and only to collect high-resolution elevation data on a worldwide scale. V1 Magazine editor Matt Ball sat down with Intermap’s CEO, Brian Bullock, to discuss the company’s history and business plan, as well as the future of 3D modeling.

 

V1: Your NEXTMap program, which provides elevation datasets on a national scale, began with the collection of data for all of the United Kingdom. Why the United Kingdom first?

Bullock: It was a proof of concept and if you’re mapping, you want a small footprint but a big economy. People don’t realize how small the United Kingdom is – it’s only half the size of California, and yet it has the world’s fifth-largest economy.

In the 1997-98 timeframe, we decided that we wanted to seed a number of different vertical markets with data – to get them used to a new source of data. One of the vertical markets we wanted to look at was flood mapping, because water is a prisoner of the third dimension and it has to go where the low elevations are. We had a group of friends in the risk management business in the United Kingdom and, between the two of us, we put together a demo project on the Thames River in 1998.

We performed the elevation mapping and they constructed the flood model; we showed that a more precise elevation model would allow for a better management of insurance risk. By determining a building-by-building flood risk rather than simply by postal code – the only thing that was available at that time – we demonstrated that you could manage your risk portfolio and do a better job of stratifying premiums and making other business decisions.

They demoed that product in 1998-99 and, as lit turned out, in 1999 there was a 100-year flood in the United Kingdom. So the insurance companies breathed a big sigh of relief and said, “It’s now another 100 years before we experience a flood of this magnitude.” Well, statistics don’t work that way. And guess what? In 2000, the United Kingdom had another 100-year flood. All of a sudden, they became very motivated to launch a new flood risk program.

So, I personally went over and worked with our U.K. partner to put this proposition in front of the two largest insurers. We were originally thinking it might get supported through a joint industry project. One of them said, “No, we want to do this ourselves.” That gave us a launch customer, and it turns out to have been a brilliant decision on their part. They got the leadership in the industry and they got accolades from the public for being forward thinking, so it was also a huge public relations win.

It’s only been three years since they completed the flood model, and, because they got a better handle on their own risk, they’ve saved many times the cost of that project by not having to buy as much re-insurance. They had floods in 2007 and saved 10 times the cost of the project in just that year. It’s been a huge benefit for them and, of course, it gave us a great prototype.

First of all, we had to determine whether we could map a whole country at 1-meter elevation accuracy; after all the testing was done, we exceeded our goal by 15 percent. We have an 85-centimeter product for the United Kingdom. Secondly, we had to show that if you mapped it, people would buy it and that we’d be able to recover our invested cost. We were able to do that within the first couple of years, and so had our customer. So, it turned out to be the perfect prototype.

With that completed, we set out to map the United States and Western Europe. A combined area that is 50 times larger in area, with 15 times more GDP, and we’re more than half done.

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This flood animation shows the water extent from several different flood scenarios. Elevation data is critical to these calculations, and can save considerable cost for those managing risk.


V1:
Did flood mapping prove to be the market leader in Germany, which was the next countrywide dataset that you delivered?

Bullock:
No, it wasn’t – it is one of the key markets that we are going after, but it was not a market leader. I would say that the industry sector that jumped on our product first was cell tower siting for wireless telecom. Our data is excellent for intervisibility and the calculation of a coverage mask, and it is a relatively low-cost, high-resolution data source that fits into their modeling capabilities.

When we finished mapping the United Kingdom, within two years every wireless carrier bought our U.K. data. The wireless companies tend to be multi-national, so they were aware of our data quality before we delivered Germany. Our first sale of Germany data was to a wireless carrier, E Plus. It looks like the next two sales will be to its competitors.

V1: What was the impetus to start the company? You came from a mapping background, but to have the vision to map at the country level is quite ambitious and aggressive. How did that idea gel?

Bullock: Our previous company had a strong oil service business that we sold to Schlumberger. All of us recognized the fact that if someone owned intellectual property and achieved market leadership, they could provide a lot more value for their shareholders than if they simply operated a service business. So, we thought, if we’re going to redo a mapping business, we’re going to want to figure out a way to create significant rewards for shareholders.

We developed a market study that asked the top 100 mapping customers from our previous business, “If we were to re-launch the company, what could we do better?” People want better pricing but, even more than that, they wanted faster delivery. We asked them what they meant by fast delivery – this is an industry in which a mapping project is normally measured in months, if not years. They said, “Well, we’d like the data within 21 days.” We thought about that and realized that there’s no way you can issue an RFP, award a contract, go out and collect the data, process the data, and give it to the customer in 21 days.

The only way that’s going to work is if you have the data in inventory. In a fee-for-service business, the customer sets the spec and the contractor responds to it. You can’t do that if you’re going to be a data warehouse. We looked at the previous attempts at data warehousing, and we came to the conclusion that they had failed for two reasons. One, they never reached critical mass in coverage. And two, they didn’t set a specification that was uniform.

We began thinking that critical mass means you have to get national coverage. You can’t just have the hundred biggest cities – that’s not going to be critical mass – so we set our goal to get national coverage.

Then we asked, “What’s the specification that most of these markets will need?” We then took the initiative and set the specification for NEXTMap at 1 meter. We knew that it would meet the needs of a lot of markets, but not all markets. You don’t build a new building based on 1-meter data, for instance. But planning, route selection, cell tower selection, modeling with drainage, slope stability – all of that can be done with 1-meter data.

With those two decisions finalized, we then invested to get the technology to the point that we could do that efficiently. That’s what led to our first attempt in Britain. We now have a huge production system on a scale that nobody’s ever seen before. We collected 3.5 million square kilometers last year – that’s nearly half of the United States in one year.

And we will, by the end of 2009, have 10 million square kilometers in inventory. That’s all of the United States and all of Western Europe. Two years later, we’ll have 15 million square kilometers because we’re going to add Eastern Europe, Southern Canada, and some other international areas. We’ve got a very, very long-range vision about what needs to be done and the value it’s going to generate.

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V1: In terms of operations, how many planes are you flying and how do you manage the collection?

Bullock: We have four planes; right now, we have one here in the United States, one in Canada, and two in Europe. They move all over the world. We’re mapping on five different continents now – South America, North America, Europe, Asia, and we’re just about to go to Australia for an initial project.

We manage the airplanes here at our headquarters office. They’re flight-planned every day, with two or three flight plans for each aircraft each day. We plan the flights centrally because we have better access to weather data and other reports. We found that our productivity increases by 20 percent when we centralize the planning, rather than having it performed in the field.

V1:
So, you do some project-based work for very large geographies outside of your countrywide collections?

Bullock: We do a lot of project-based work to pay the bills. We’ve performed collection for forestry planning in Jamaica and Puerto Rico, for example. We’ve done a lot of work in Indonesia. We have about a third of Indonesia completed. We’ve also started in Malaysia and collected part of the Philippines, so Southeast Asia has been an area of focus for us as well.

V1:
Would you ever get in the service business by adding analysis to your data to provide insight and reports?

Bullock: Yes, for example, we’ve decided to create a flood risk mapping product solution. We provide a service right inside the insurance company. It’s a seamless application in which somebody just has to type in an address and a flood report is automatically generated. They have no clue about how it’s produced; it’s just offered as an end-to-end service inside the company.

We provided two demonstration products last year, one in Germany and one in Switzerland. We’ll probably do two or three whole countries this year,so we are headed in that direction. We must be selective because we’re still a small company and we can’t do everything. The flood market was one we decided to pursue because it was such a huge success in Britain.

V1: Governments have usually been in the position to undertake projects at the scale, scope, and accuracy that you’ve undertaken. Is there any conflict between your solutions and the types of projects that governments undertake?

Bullock:
We’re just trying to do the best we can for the customer and the user. Our first loyalty is to our customers and giving them products that they can use to enable new applications.

In my view, there’s a disruptive change happening in mapping. I spoke to this development at the National States Geographic Information Council (NSGIC) Conference last September. There are a lot of unhappy people in government mapping organizations right now because they see themselves being marginalized. Budgets are going down, and they’re losing control.

It’s a fact that commercial applications have now surpassed government applications. Mapping actually started in the 1700s, prompted by national security concerns between France and Britain, which werethe first two countries to be mapped nationally. Then it moved into the national mapping phases and GIS, and government and utilities were the big users.

That has changed.The point I made at the NSGIC Conference is that now there’s vastly more money moving in these industries propelled by consumer applications than there is by large utility and professional applications. I illustrated that simply by taking my Garmin nüvi® to the stage and asked, “If we waited for government data, would this product exist today?” My answer: “It exists today because two companies, NAVTEQ and Tele Atlas, took the initiative to invest over a billion dollars, and they licensed it into this product for $30.”

More than 30 million of those devices were shipped in 2007. NAVTEQ and Tele Atlas’s combined revenue was $1.2 billion worth of maps. They’re spending a billion dollars a year updating and improving their databases. What other mapping organization in the world has access to that amount of cash?

In four years, the investment will double again. Look one level up at Location-Based Services (LBS) and how much cash it’s driving. Google’s whole thesis is that 50 percent of the advertising dollar is wasted because it isn’t location specific. Google is out to double the efficiency of the advertising dollar – location is propelling Google’s business.

If you look at Google’s total business today, and at Yahoo!, and Microsoft’s Virtual Earth, more than $20 billion a year is being driven by knowing location. That’s way beyond what any government is ever going to spend. So people in the traditional part of the industry just have to face the facts that the amount of cash coming from government, and even utilities – what used to be the big drivers – has now been dwarfed by LBS and consumer applications.

My belief is that, within a decade, sales of 2D and 3D maps for these types of applications will exceed $10 billion. So, it’s just not correct anymore to say government needs to be driving this – it’s simply not going to happen.

Anybody who doesn’t think there’s major change occurring needs to read Clayton Christiansen’s book The Innovator’s%20Dilemma%3C/a%3E%3Cimg%20mce_tsrc=%22http:/www.assoc-amazon.com/e/ir?t=vectmedi-20&l=as2&o=1&a=0060521996%22%20width=%221%22%20height=%221%22%20border=%220%22%20alt=%22%22%20style=%22border:none%20!important;%20margin:0px%20!important;%22%20/%3E” target=”_self”>The Innovator’s Dilemma , and just think about the dramatic change that’s happening.

V1: A model-based future is gaining traction. Is your eye focused on that?

Bullock:
Consider the advances Virtual Earth has made in the last year. If you compare the city of Denver in Virtual Earth to what it was a year and a half ago, you can see where we’re headed in terms of content. Intermap is more the national-scale provider than the city-scale provider. The city scale uses different technologies and different approaches.

Virtual Earth does the street view, and Intermap does the bird view. We have not committed ourselves to do anything at the street level yet. Our technology is most efficient at very large areas and it’s the most cost-effective way to map an entire nation.

You know, it’s astounding that it took $2 billion and 60 years to map the United States the first time, and we’re remapping it now in about four years for less than $100 million dollars. We’re also doing it with a thousand times more density and ten times more vertical accuracy. That’s all a gift of technology.

V1: Is the sweet spot going to remain at one meter? Is there a need to revisit and add higher accuracy?

Bullock: We’re very complementary with other scales. However, we are studying whether, in five years, we should perform a 30-centimeter accuracy on nation-sized areas. There are some applications that would benefit from 30-centimeter data on a national scale,but we haven’t decided on that yet.

Right now, Intermap is focused on completing the initial phase of the NEXTMap database, building it out, expanding it, leveraging as many applications as we can, helping seed those, and get them going. We’re excited about our future. One of the things we think is going to happen this year is a revolution in handheld devices going from 2D viewing to 3D viewing, and our data will help that happen.

 

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