From the Publisher
By Roland Mangold

GeoTech Three Pack: Economic Trends, New Players, and New Opportunities.

A question that seems to be coming-up often nowadays is, "How will an economic downturn affect this industry?" This is especially relevant now that our boom is being threatened by the Asian economic crisis. We are beginning to see signs of what a downturn can bring. Even though this industry is experiencing growth, for the most part it has been flat to modest. The Asian economic crisis is having an impact on many companies in this industry. And, some that have been disproportionately dependent on Asia for their growth are being affected more severely.
      South America is another market heavily targeted by this industry as holding tremendous economic potential. Rightfully so, for there is no other region of the world as rich in land, natural, and human resources. If ever there was a formula, for the need for the GeoTechnologies, those three ingredients would have to be listed as the most important. South America is already yielding sizable dividends for companies in this industry. And, all recognize the potential for that market is much greater.
      However, in spite of the rosy future everyone is painting for South America, ominous clouds are forming on the economic horizon of its largest market, Brazil. Already, a number of companies in this industry have been adversely affected by Asia's economic woes, we can only conjecture what the affect would be if similar scenarios were to materialize in South America.
      I discussed these issues with Al Hanks, (formerly with ERIM International, Plangraphics, Hughes STX, et al,), one of the most informed men in the industry, and all around GeoTechnology expert. According to Al, the formula for success in this industry is for a business to be geographically diverse so that recession in one region is offset by a robust economy in another; and, to have a foothold in several diverse vertical markets or applications so that if one industry is experiencing a downturn then there are other, more bullish markets to compensate.
      Al has an opportunity to test his theory. With the backing of a very large, deep-pocketed private corporation, Al is helping orchestrate a classic roll-up strategy for this industry . The idea of a "roll-up" strategy is that in a fragmented industry such as mapping/GIS/remote sensing, you acquire a number of companies that have market presence, if not dominance, in diverse vertical markets, diverse geographic markets, and diverse technological capabilities, and you roll them up into one dominant corporate entity that is relatively immune to economic fluctuations.
      There are others with similar models or variations on the theme, but my concern is that other companies in this industry have not sufficiently diversified their geographic and application markets. I am not suggesting that this industry should shun international markets. I am suggesting that this industry needs to diversify not only internationally, but domestically too. What concerns me more than an economic downturn either domestically or internationally is the fact that many markets have not been sufficiently penetrated and, in some cases, are being ignored.
      The environmental industry is an excellent example. For instance, The New Jersey Department of Environmental Protection has mandated that all environmental reports, site remediation projects, and Phase 1 investigations must be provided to the State in GIS format. New Jersey has a state wide environmental GIS, and ultimately they want all environmental information to populate this database. According to John Defina of The New Jersey Department of Environmental Protection, "We have spoke to numerous environmental consulting and remediation firms who are jumping onto the GIS bandwagon. And, interestingly, they do not resent the mandate. Even though they were not motivated to get into GIS until the mandate. They now can see the benefits of storing and working with this information in a GIS."
      This is the type of catalyst that can spur exponential growth for the GeoTechnologies. As recently as a year ago, few in the environmental industry knew what GIS is. Now they are actively getting into it, and it's not just the big engineering companies. Medium and small environmental remediation and consulting firms are looking for entrees into GIS. The irony is that virtually no one is marketing to this industry - it is fair game to any vendor - and the environmental market is not even on most of their radar screens.
      I have just provided a sliver of the types of issues that are omnipresent in our industry: "What are the economic trends, and how will they affect us?" "Who are the leaders of the industry, and what potential new players are waiting in the wings?" And, "Where are the markets, new applications, and how do we capitalize on them?" Through the magazines EOM and Modern Agriculture, The GeoTech Business Intelligence Report, The GEMI Store's sales and marketing, and the market research derived from the GeoTech Census, these are just a few of the issues EOM tackles every day for the GeoTechnologies. Call us at 303-690-2242 to find out how you or your organization can benefit from EOM's efforts. We are here to ensure your success in the GeoTechnologies.

Cheers!

Roland Mangold

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