In a recent IDC market research study entitled "Worldwide Business Analytics Software 2009-2013 Forecast and 2008 Vendors Shares" (as reported by Intelligent Enterprise Magazine), a few geospatial technology companies popped up on the report under the category of "business analytics." According to Intelligent Enterprise, "The business analytics market grew by 10% in 2008 with Oracle having the largest share in terms of revenue, a market research firm said. Over the next five years, sales are expected to continue to rise at a compound annual growth rate of 7.2%." While Oracle is the overall market leader of the top 10 companies in the survey, ESRI and Intergraph appeared in the second tier (11 through 35) of this list. The top 10 vendors accounted for 66% of the total market, with the second tier companies accounting for the rest. For greater detail on where spatial information management and spatial analytics technology truly fit into the mix, and to discuss IDC's work on geospatial market sizing, Editor in Chief Joe Francica spoke with IDC's spatial analyst, David Sonnen.

Directions Magazine (DM): This particular IDC study of the business analytics market includes a few geospatial vendors in the mix. Does this mean that geospatial technology solutions are now a sub-segment of the broader software solutions market? Is this is change from previous studies? Why now?

Dave Sonnen (DS): IDC has included spatial information vendors in its broad business analytics practice for several years. While companies like ESRI, Intergraph and PBBI do a lot more than just analytics, some of their software does include sophisticated analytic capabilities. So, IDC tracks spatial companies as part of the overall business analytics market.

Also, most business analytics companies include spatial capabilities in their analytic platforms. It's hard to track exact revenue figures for features in a software platform, but IDC does think it's important to recognize the role that spatial capabilities play in enterprise markets.

DM: We noticed a change in terminology in the report. The term "business analytics" was used, while including many "business intelligence" software companies in the mix. Has "BI" become too generic a term for a category that includes "CRM" and "ERP" and everything in between?

DS: All the analyst firms have their own taxonomies for the markets they cover. Those taxonomies are somewhat arbitrary, but they give the analyst firms a consistent structure for tracking revenue and trends.

IDC uses "business analytics" as a broad category that includes analytic applications, business intelligence tools, data warehousing platform software and spatial information analytics tools. We divide some of those categories into subsegments, like financial analysis software and CRM.

To answer your question, "BI" is too broad and loosely defined for IDC's purposes. But, IDC's taxonomy is probably too granular for most people. Generally, most people will combine some of IDC's categories to derive the market potential data they need for a particular application or new business.

DM: What are the implications for geospatial players now that they are included in the mix? Will this help or hurt their chances of expanding their reach into enterprise computing? Does this mean that they will have to collaborate with the business analytics providers to get the attention of CIOs?

DS: In its report, IDC is just recognizing that spatial technology is part of the broad business analytics picture.

Most geospatial companies are in the thick of the enterprise business analytics battle. They are part of a complicated web of partnerships, co-development arrangements, strategic relationships and direct competition that swirls and twists constantly. These battles will be lost and won at the individual account level. All sides will proclaim victory and "dominance" - just normal market noise. The companies that keep making money over time are the actual winners.

DM: What implications do you see for the niche location intelligence companies like SRC, geoVue and Tactician? Do you expect these companies to seek a merger with other BI companies or structure their own mergers to form larger, more specialized firms?

DS: There are many, many places for spatial analytics in enterprise IT. The niche players and new innovators all compete for the spaces they think they can win. But, the bigger players generally win the financial battles. The niche players can either try to defend some space they think they can hold or they can form relationships with the big guys. Sometimes that means selling out.

DM: PBBI was not mentioned in this report. What significance do you see in that?

DS: Pitney Bowes is definitely included. IDC just hadn't updated the report with the new PBBI name.

DM: Several companies mentioned in the report like Netezza, TIBCO and Informatica have dabbled in spatial solutions. Do you expect them to expand their efforts into the location intelligence market or is "LI" still flying under the radar?

DS: Most business analytics companies have some kind of spatial strategy. Some, like Netezza, are currently quite focused on spatial analytics. Some companies, like PBBI, brand their products as "Location Intelligence" and some use other terms that they like better.

I don't think that "Location Intelligence" is under the radar; it's just one of many branding terms that companies will use to differentiate themselves.

DM: The market for "business analytics" is expected to grow by a 7.2% compounded annual growth rate. Can we expect similar growth in geospatial analytics?

DS: Right now, it looks like spatial analytics will grow a bit faster - how much faster is hard to say. But, there is currently a lot of interest in spatial technology broadly, and I expect that interest will translate into increasing revenue as the recession abates.

DM: What can you tell us about the overall size of the spatial analytics and the broader spatial information management market?

DS: We're pegging the total spatial information management software market at $3.19 billion this year. That's just software licenses and maintenance. Data and integration services would add to that number.

We think that the spatial analytics software share of the spatial software market is $717 million this year. That only includes revenue from the spatial information management providers.

We can't track spatial revenue inside business analytics companies. They just don't make that kind of detail available, if they have it. Since most business analytics companies have at least some spatial capabilities, they are seeing worthwhile returns for those capabilities.