UK Geomarket worth £1.2bn – who knew? 1

There is money in them there maps. Thanks to seriykotik1970

How big is the UK geomarket? What does it comprise? A recent report by ConsultingWhere entitled “The UK Location Market Survey 2012” suggests that the market is now valued at £1.2bn per annum. That’s pretty big and certainly more than my informal but informed guess/envelope calculation/hunch which either means that they’ve got it wrong or that I don’t know as much as I thought I knew (probably the latter since their research is largely sourced from publicly available data).

Scope creep

So how did we grow from a geeky niche to be a billion pound plus industry? Well the answer is at least partly down to the broadening of the scope of what CW define as the UK Location Market to include

  • Originators  of  software,  data  and  hardware  where  location  information  is  a   significant  component.
  • Suppliers  of  services,  data,  software  and  hardware  both  direct  and  indirect  where   location  is  a  significant  component.
  • Revenues  derived  as  a  direct  result  of  the  use  of  location  information.  Examples  include  the  advertising  revenue  of  web  organisations  where  the  service  incorporates   location  information.
  • All  suppliers  of  location-based  data  and  services  provided  within  applications  on  a  personal  mobile  or  tablet  device.
  • Specialist  hardware  used  by  organisations  active  in  the  location  market (but not consumer GPS)

The chart shows the breakdown by business focus with Geospatial  representing what I think of as the traditional GI business space. I think there are a couple of very significant shifts identified by this choice of scope. Firstly the inclusion of the Marine sector (massively bigger than I had ever thought) and the Geomatics sector defined as “land-­based  surveying  and  related  activities’ recognises that the professional market has much broader scope than what we (or maybe that should be I) have typically considered within the traditional GIS world. Additionally the authors have included the growing B2C market including location based applications on mobile devices and location driven advertising although it is not clear how they have been able to split these revenues out from the numbers of some very large players. It would have been great if the authors had exposed a little more detail about the breakdown of their estimates but I guess the confidential conditions of some of their sources precluded that. It appears that most of the growth from the previous CW survey in 2009 when the market was sized at £657m is down to the broadening of the scope of the study. The downside to changing scope is that it makes it more difficult for those interested in tracking the ups and downs of the GI market to identify the key trends in the professional  segment, although they do recognize this issue by providing a “like for like” comparison of the turnover of some of the bigger players over the intervening period. The big takeaways for me from this study were how much more there is to location than your MapInfo Pro or ArcGIS and how colossal the data market is.

A peek inside

Apart from the overall size of the market what are the highlights of the study? The data market is well over half of the total market (which seems to match my experience of selling solutions) that said, one has to wonder whether this segment of the market is going to shrink as crowd sourcing and #opendata encroach.

This study has included a very comprehensive review of the vertical markets for the UK Location Business, the authors have gathered contributions from domain specialists, users and solutions vendors which identify the drivers and issues in each market and seek to predict growth or decline over the next 3 years. Understandably a large share of expenditure is in the public sector (Defence, Central & Local Govt and Emergency Services) and with the exception of defence all of these sectors are predicted to decline. Personally I think the authors have substantially understated the likely decline (which they predict at -5% to -10% year on year) as the implementation of the austerity agenda combines with a surge in uptake of Open Source geo. Overall the traditional GI market is going to be pretty flat with at best growth in commercial sectors offsetting the decline in the public sector.

Clearly it is based on a large amount of research – if  you work at the user or supplier end of the market these sections are interesting and possibly essential reading (even if you thought you knew the market back to front)

So is the study worth purchasing? Who should be interested in it? The authors say

The  overall  aim  is  to  provide  readers  with  a  view  of  the  UK  location  market  in  both  quantitative   and  qualitative  terms  for  the  purposes  of  aiding  business  planning  and  in  order  to  underscore   the  value  and  importance  of  the  market  within  the  wider  UK  economy

If you are in the location business or are thinking of developing an application in this space then this study (at less than the cost of a day’s consultancy) is a worthwhile read.

Disclaimer – I am kindly name checked by the authors in their acknowledgements for providing some feedback and suggestions on an early draft of the study. I didn’t write any of the content and I have no financial interest in it.

One thought on “UK Geomarket worth £1.2bn – who knew?

  • Thierry G

    Whenever I’m interviewed for studies like these I struggle with where the line is between geo and other industries. Most of our products have geodata in them but are mostly targeted at non-geo industries. So do we include all of our revenues in the market estimate or just some of them? If 20% of the product cost is spatial data, should you only include 20% of the revenue in your “geo” market estimate?

    Who knows. OS always claim they “underpin” £100 billion worth of economic activity, does that make the market worth 100 billion, or 20, or 5, or 1? You might just as well use GDP and divide the zillions of pounds or dollars by the number hedgehogs in your garden.

    I think what is much more useful than the numbers is the *mood* in the industry. In my experience that’s pretty clear cut at the moment: pure geo is struggling or even declining (except maybe in developing countries which are not as well mapped); the web and energy giants are on a roll (the latter esp. offshore and overseas), finance & insurance are doing well, and everybody else is just bumbling along waiting for good times to return.

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