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?

1. Feature
26 Quarter Three 2012

2. Brave
New
World
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? ››
By Brad Spencer, managing director, NuMaps
Quarter Three 2012 27

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 Australia's 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 industry's 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 was
28 Quarter Three 2012

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, or
Fig. 1 Blue areas are CCDs where Median Total Household b.) as a software as a service (SaaS) offering that is hosted in
Income 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 model
purple area is where the two overlap. Study area is Castle Hill in
because the SMEs see this as an operating expense which
Sydney’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 resources
Fig. 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