iStart - Brave New World: GIS solutions in the cloud

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The ‘Spatial industry’ has for decades appreciated
the real, exciting and powerful benefits of geospatial
analysis. But if geospatial tech is so wonderful and
is such a ‘no brainer’, why haven’t small to medium
enterprises embraced the technology?

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iStart - Brave New World: GIS solutions in the cloud

  1. 1. Feature26 Quarter Three 2012
  2. 2. BraveNewWorldThe ‘Spatial industry’ has for decades appreciatedthe real, exciting and powerful benefits of geospatialanalysis. But if geospatial tech is so wonderful andis such a ‘no brainer’, why haven’t small to mediumenterprises embraced the technology? ››By Brad Spencer, managing director, NuMaps Quarter Three 2012 27
  3. 3. Feature // Brave New World T here are approximately 1.5 million SMEs in Case Study Australia representing about 40 per cent of the By way of example, the Rooftops application has been devel- Australian workforce and contributing around half oped and is being tested for its benefits in Sydney. The original a trillion dollars to Australias GDP. SMEs make a objective of Rooftops was to demonstrate software develop- substantial contribution to domestic production in ment capability and to also leverage access to ABS census a wide range of industries and much of the productivity gains in data in the form of online thematic map overlays. These can be these SMEs can be attributed to the high take-up of information draped atop of a Google Maps-like application or mashup. The technology and more recently the increasing use of the internet. result is a web-based application that has SME market appeal if Given this huge potential market hungrily adopting new packaged affordably. smart technologies, why has business use of mapping technol- The target market for Rooftops is any SME that wants to ogy been slow to take off? Geospatial technologies have been identify households that are candidates for their product micro- around for a long time, but the entrenched use of this technolo- marketing efforts. These are not vast swathes of suburbs or gy is largely limited to niche markets within a number of sectors postcodes but a subset of properties that are more likely to be such as public, defence, mining, finance and others. It’s rarely converted into a sale. These organisations may typically be selling found in the 20-99 man businesses that are selling products “ Asking solar panels, swimming pool products, outdoor pergolas, garden direct to consumers. Yet these organisations have recognised the value of investing in IT and are operating with an internet SMEs to invest sheds, landscaping, etc. These are big ticket residential items that historically have been attacked with postcode/suburb wide mail- presence. There are several reasons why an increased take-up in thousands out strategies. These strategies have proven to be expensive per has not eventuated. converted sale. The objective of the Rooftops application is to use Firstly, the spatial industry tries to over sell technology into of dollars for information to identify households that have an apparent capacity this market. These businesses do not want to invest in GIS and all that goes along with that investment – it’s simply not core to access to the and/or a need for these products and are more likely to invest. Rooftops consists of a two-step analysis process: their business. Targeting these organisations as potential GIS latest imag- 1. Inspect the Demographics. In this first step the user has customers is a waste of time. access to a demographic analysis tool that lets them iteratively Secondly, spatial technology is generally over-priced for these ery or access identify the ABS Census Collection District (CCD) areas that on markets. These organisations are reluctant to make any financial investment in technology unless its benefits are clearly apparent to the latest average have financial capacity to invest. Currently, this is based on economic capacity to spend (In Fig 1 we are overlaying low over and above any alternative investment. So asking SMEs to geocoding Mortgage Stress with high Household Incomes). The user can invest in thousands of dollars for access to the latest imagery vary these overlays interactively by simply changing criteria val- or access to the latest geocoding engine will simply fall on deaf engine will ues in order to isolate high priority target CCDs (in Fig 1. The CCDs ears. Google have done more to commoditise spatial data and thus get it in the hands of the broader community more suc- simply fall on rendered purple). Other analysis profiles can be supported such as based on education, employment, religion and other attributes. cessfully than all the spatial industrys efforts. deaf ears. ” 2. Inspect the Individual Properties. Given that the user Thirdly, geospatial analysis applications are typically not tar- knows that the area they have identified has more financial geted to particular operational needs. They are invariably trying capacity to invest, they can now invest the time and effort into to be all things to all markets and therefore over complicated. looking at each individual property to identify those they would Generic open source GIS products are available but they are not like to market directly to (Fig. 2). The user switches the base being used because there is too much of a learning curve and map to the high resolution imagery version and can zoom in little data available even if they accept the benefits. and pan around to inspect each property within the target area. Finally, these markets need clear proof of the benefits. There The address for any property can then be harvested into a list of are rarely individual champions within organisations that get it addresses by the included reverse-geocoding tool. The result is a and lobby within to invest in this technology. list of property addresses suitable for target marketing purposes. All the above probably only represent a few of the show- When inspecting a property the user can measure rooftops, stoppers but they do indicate the magnitude of the challenge. If backyards, etc with the measure tool and objectively include or these markets are to embrace geospatial analysis these issues at exclude properties based on inspection of house aspect, exist- least must be addressed. ing landscaping and tree shadows etc. In Fig. 2 the user was28 Quarter Three 2012
  4. 4. measuring rooftops and harvesting addresses shown as red map symbols. In this application example, it was important to exclude houses with solar panels already installed. This type of application does resonate with SME businesses; it does not require any GIS software investment, no user training and can be accessed via a standard browser-based PC con- nected to the Internet. However, there are details that have to be sorted not least of which is pricing. As explained above enterpris- es will simply not invest time and money even in a simple web based application if it does not have an immediate return. In this case that is a list of remotely qualified sales leads. But they will invest once they are convinced that the cost per converted lead is affordable. SMEs simply cannot afford to waste any resources. Price for any web-based service inevitably comes down to dif- ferent business model options. There are two ways to price such applications: a.) as a software product sale that delivers the software to the client to run on their own Internet server, orFig. 1 Blue areas are CCDs where Median Total Household b.) as a software as a service (SaaS) offering that is hosted inIncome is greater than $9,000 per month, Red areas are the cloud and paid for under a subscription model.CCDs where Median Mortgage Stress is less than 22% and the The preferred option would appear to be as a SaaS modelpurple area is where the two overlap. Study area is Castle Hill in because the SMEs see this as an operating expense whichSydney’s Hills district. requires no capital outlay and can be terminated at any time – low cost of failure investment. The other key reason is that should they invest as a capital purchase they would need to arrange licensing agreements with at least three downstream data suppliers. Under a SaaS model this is all undertaken for them by the provider of the service on behalf of all users of the service. However, the downstream suppliers of the data used in this or any similar application must look at this market in a differ- ent light to the typical GIS aware market. For example, there are limitations on geocoding and there are licensing costs for access to the most recent imagery that could make the whole exercise cost prohibitive and or impractical. Conclusion It is clear that SMEs are a ‘greenfields’ market for geospatial analysis presented with the right applications and that data and network infrastructure are improving all the time to facilitate such initiatives. However, if these initiatives are to flourish and brave new markets breeched then the suppliers of the dependent resourcesFig. 2 Red circles are harvested addresses need to re-package their offerings to accommodate these mar- kets and cloud-based initiatives otherwise geospatial analysis will struggle to be adopted in the broader market place. Quarter Three 2012 29

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