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Jack Dangermond, founder of the 45-year-old mapping software company Esri, thinks every businessperson needs more geospatial awareness.
In Jack Dangermond’s world, an interactive map is worth 100 charts.
He’s biased, of course. The privately-held geographic information systems (GIS) company that Dangermond founded 45 years ago with his wife—Esri, or Environmental Systems Research Institute if you want to be formal about it—happens to be the market leader in this particular software category. Its technology is used by more than 350,000 organizations worldwide, including more than two-thirds of the Fortune 500.
Growth in the commercial sector is exploding, more government agencies and research organizations publish reams of historical data about communities around the world, including images, geographic information, and pretty much any sort of database you can imagine. “Executives are waking up to realize that they can do a lot better, save money, make better decisions if they optimize and start thinking geographically and have a location strategy,” Dangermond said.
Another major driver has been the uptick in mobile technology. “The app revolution is allowing the concepts we conceived of 50 years ago to come alive in consumer-like apps and consumer-like devices,” he observed.
Esri’s recent growth outside its traditional government stronghold is being driven largely by itsArcGIS service, which houses millions of maps available to any company that wants to overlay them with its own proprietary information. One example is a solar development site selection resource created by National Land Realty—which helps the real estate broker qualify sites far more quickly than previously possible. “We are able to do a much higher level of due diligence,” NLR’s chief operating officer, Dean Sinatra, told Fortune earlier this year.
Fortune spoke with Dangermond about his company’s growth potential among businesses and why you should paid far more attention in geography class.
Fortune: What’s the competitive landscape?
Dangermond: The way I see the world is that there fantastic maps being created by Apple and Google and Bing and others that are in the simple mapping [category] embedded into consumer experiences, the search kind of experience, the location-based services kind of experience. Then there is the GIS world that is largely managing authoritative data sources, supporting geocentric workflows like fixing roads, making cities more livable through better planning, environmental management, forest management, drilling in the right location for oil, managing assets and utilities. Once you’ve distinguished those two different markets, then you can drill into competitive plays.
We aren’t into the consumer space because that space is largely dominated by search and advertising, and it has a consumer face to it. Our space has technology that faces the consumer, like a business-to-consumer map service or a citizen-facing application that a city government is using.
Why is ArcGIS such a big deal?
This is really about democratizing mapping and location analytics. This is best told by use cases. The city of Boston had about 120 GIS specialists, now they have several thousand web map users on our platform. … The city provides web mapping for all Excel users or for those that want to do self-service mapping. A large oil company in Europe used to have 400 of our GIS workflow users along with big database servers. Now they have more than 12,000 users using ArcGIS. Their executives are looking at what is going on in their own businesses. They are also able to drag and drop spreadsheets onto their map to see what the data tells them, live. Or they can use them for presentations.
From our perspective is best to support these markets with one platform: the best geocentric workflow stuff, plus the best web mapping. This stuff that can be embedded into other apps like SAP or SharePoint or Office or business intelligence platforms from SAP, Cognos, and IBM.
What do you believe are the most relevant applications for the Fortune 500?
Traditionally, GIS has been very strong in government. Local government, state government, national government. It has helped them improve things in four areas. It’s helped them communicate stories. It’s helped them make better decisions by doing spatial analytics. It’s been able to provide documentation of record, like parcel maps and inventory maps. And it’s been big in educational science. But in the last four years, our biggest growth in GIS applications has been the commercial sector, growing 30 percent year on year. Some of it is this new mapping platform.
Big companies are starting to look at a ‘locational’ strategy, and a mapping platform can help that quite a bit. Just simple maps across the whole enterprise and sharing maps between different groups. This is just exploding. They are looking at consumer maps like the Google Map, but then they look at their own data on their own platform and they just go crazy.
It takes a while for executives to understand that every company is a spatial company, fundamentally: where are our assets, where are our customers, where are our sales. But when they get it, they light up and say, ‘I want to get the geographic advantage.’