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?”
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.