ASM
How to Pay for GIS?
That seemed to be the take home message from a meeting with Jack Dangermond at the ESRI Asia Pacific user conference on the Queensland Gold Coast in Australia.
He has been a big beneficiary of the current system. He is the founder and president of the world's most successful GIS company. Despite being tightly focussed on GIS, ESRI is a large company in anyone's book. It has about a million users; its turnover has been estimated at around a billion dollars.
But when I spoke to him, Dangermond had just concluded a keynote address in which he introduced the latest version of his ArcGIS software, version 10. It embraces all these trends, which would seem to have the ability to threaten the way he does business. Dangermond agreed with the the proposition that there are a number of technical trends in the industry that make the delivery of a discrete software product for a fee more problematic.
At the very least, the delivery of software, data or services over the web lends itself to a per-transaction model, in which you pay every time you access the service.
Another alternative is the development of offerings where people pay a subscription. This would be modelled on typical arrangements in publishing, where you pay an annual fee for access to the software or the service.
Even more disruptive: the Google model calls for the delivery of all this for free. Google makes its money from advertising, but other alternatives might also be viable. For instance, if a third party wanted access to users, or to promote a service to users. Dangermond says that many vendors in the IT industry are already exploring all of these options as ways to deliver their products. For instance, Microsoft, surely the benchmark in the industry, already offers services on a subscription basis.
But he noted that this kind of model is more viable when the task at hand can be broken down into a number of clearly defined, discrete steps. He noted Salesforce.com, a site for managing sales representatives. 'It s much cheaper and more efficient to host in the cloud that to tie up your own server and resources', he said.
To a certain extent, he said GIS will be protected from this because it is more a generic toolbox than an application. That is, a GIS needs to be tailored to each environment in which it is used, so its harder to offer on-line as a discrete module.
Notwithstanding this, there are particular applications of GIS that can be made into very discrete tasks. For instance, ESRI now offers its ArcLogistics (logistical analysis for the transport industry) and Business Analyst (location decisions for companies) products as software as a service.
'The bottom line', he said, 'is that some way has to be found to develop clever software, and make it relevant to customers'.
