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Despite technology disruption, Esri’s digital maps help businesses keep up

Jeffrey Tan
Jeffrey Tan2/4/2019 08:00 AM GMT+08  • 7 min read
Despite technology disruption, Esri’s digital maps help businesses keep up
SINGAPORE (Feb 4): As a young man, Jack Dangermond aspired to be a landscape architect. But while undergoing his tertiary studies in landscape architecture in the 1960s, he turned his interest to the field of geography and computers. At that time, he was
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SINGAPORE (Feb 4): As a young man, Jack Dangermond aspired to be a landscape architect. But while undergoing his tertiary studies in landscape architecture in the 1960s, he turned his interest to the field of geography and computers. At that time, he was fascinated with how maps could be digitalised, which in turn allowed other data to be included in analyses. “Today, we would call it spatial analytics,” he tells The Edge Singapore in an interview.

Dangermond, now in his 70s, is co-founder and president of global mapping giant Esri. He is regarded by many as the “godfather of digital maps”, thanks to Esri’s revolutionary mapping and analytics software. Called ArcGIS, it provides location-based analytics to visualise and analyse data, largely in the B2B space. The software can produce two- and three-dimensional maps and overlay data in real time. Dangermond says spatial analytics helps users see the “bigger picture”. “Maps have the power of communication. They are very easily understood by people [because] it is expressed very quickly and easily compared to spreadsheets,” he says.

Currently, more than 350,000 organisations use Esri’s mapping and analytics software. In retail, they include coffee chain Starbucks Corp, sports shoes and apparel manufacturer Nike and hypermarket chain operator Walmart. Motorcycle manufacturer Harley-Davidson and auto manufacturer General Motors are also users of the software.

Companies in several other industries as well as government agencies are also keen users of Esri’s mapping and analytics software. For instance, mining companies use digital mapping to chart mining tunnels and monitor mining activity. In the offshore sector, large oil companies use it to chart the seabed and scour for new oil reserves. The aviation industry uses it to create aeronautical charts.

In Singapore, the Land Transport Authority uses digital mapping to address overcrowding in the public transport system. The Singapore Land Authority and URA use it to plan the use of scarce land resources. “The leadership really understands the power of geographic information systems as a framework for not only doing their work better, but also collaborating between the different agencies [and] the public,” Dangermond says. “They are strong, heavy users of our technology.”

Digital maps provide unique insight

“A map is worth a million words because you can look at it and your mind somehow triggers an understanding that, [for instance,] it is better [to set up a store] here than there,” Dangermond adds. “And if you put analytics behind that, it is very powerful.”

It is the ability to combine maps with other data that provides invaluable insight into the relationships between the tangible and intangible world — especially in real time. This includes demographic patterns, human and vehicular traffic and weather forecasts. “All of those things are interrelated. Geography provides a framework of interrelating all aspects of cities and nature, which allows us to better understand how the ecosystem is occurring,” says Dangermond.

For instance, location is key for retail businesses, he says. Retail stores in the wrong locations may cause a business to fail, he explains. Digital mapping can help users better understand a store’s performance by finding correlations between its location and other factors. “We can do a geostatistical analysis to relate high performance to the causes. Then, we can create a formula that maps the best place in which the store will perform well as a function of the overlays,” Dangermond says.

Digital mapping is also helpful to non-retail organisations. For one, healthcare facilities that offer targeted healthcare services can be set up in the right locations, he adds. Digital mapping can also pinpoint the hotspots of disease outbreaks and correlate them to demographic data. This could help healthcare workers prevent a potential pandemic. Similarly, digital mapping provides value to insurance companies, as it can highlight high-risk zones such as natural disasters, wars and terrorism. “Insurance policies are being calibrated based on this geo data,” he says.

It has been argued that digital mapping may be losing its appeal in the light of technological disruption. For one, the advent of the internet has enabled businesses and institutions to transcend their physical limitations, which makes maps irrelevant; e-commerce has flourished with popular sites such as Amazon, Taobao and Lazada. Even the remote diagnosis and treatment of patients can now be delivered through an app, or telemedicine.

Opportunities in digital mapping

Dangermond acknowledges the impact from these disruptions but disagrees that digital mapping will become obsolete. On the contrary, disruptions would only lead to new and different kinds of users of digital mapping.

Take, for instance, the retail industry. Retail companies may require less digital mapping than before as they expand online, but logistics companies are becoming increasingly heavy users of digital mapping as the e-commerce industry expands. As a result, optimising routes have become more important than ever. Dangermond points out that logistics company United Parcel Service has saved US$400 million ($544 million) by using Esri’s digital maps.

Manufacturers are also seeing a shift, as they are now going directly to consumers by setting up their own retail stores, he adds. “So, they are a whole new class of customers saying ‘We want to go direct to [consumers]’ because they feel that a [direct] brand presence in a physical location is more valuable. It helps them compete against digital marketing.”

Further, as more devices become more interconnected through the Internet of Things, more data is generated, which can in turn be harvested for spatial analytics. For example, modern buildings today have built-in sensors, says Dangermond. These sensors can collect data, such as room occupancy, temperature and light, which can then be plugged into Esri’s mapping software.

Virtual reality (VR) and augmented reality (AR) technologies also offer new growth opportunities for Esri’s digital mapping software. This is an area that Esri is exploring, says Dangermond. A possible application of this is the use of AR goggles that would feed visual data as a user looks at an object or his surroundings. “So, you can walk around on the streets and look underground at the pipes or look into buildings. Our software creates a digital twin of geographic things,” he says.

Dangermond adds that Esri has opened up its software for collaborations by building application programming interfaces for third parties to produce other applications. “Our company builds tools to help our users better realise their vision,” he explains. “We don’t do all of it. We build the tools that enable these sorts of applications. And in the area of artificial intelligence and machine learning, we can also plug them with spatial tools,” he says.

Indeed, there is much that can be explored with digital mapping and Dangermond himself is not showing any signs of slowing down. He says he has “no plans to retire” and has rejected offers to buy him out. “We are 50 years old. We have always been a private company. And by being private, we were able to be more supportive of our customers,” he says, noting that Esri usually spends 30% of its revenue on R&D. “In a public company, that’s not possible. Their R&D expenditure ranges from 5% to 15% of revenue.”

Dangermond declines to go into the specifics of Esri’s financial performance, but notes that the company’s annual revenue is close to US$2 billion. He expects revenue to grow between 10% and 12% in 2018. He also expects the number of customers to accelerate each year. “Our belief is that geographic science and geographic information system technology can really help create a better world.”

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