INDUSTRY INSIDER
Application Service Providers and Their Impact on the GIS Market
By Dr. Carl Reed

Read any Internet or IT magazine and there will be an article on Application Service Providers, or ASPs. There is considerable buzz in the IT marketplace about ASPs. In the December 6th issue of PCWEEK, a front-page article has the title "Nortel Casts a Long ASP shadow." Nortel is creating an entire new unit for ASP service provision with 1000-plus employees. IBM and Oracle are both selling ASP services for such traditional applications as ERP and CRM. Industry analysts believe that, with Y2K behind us, we will see incredible growth in the ASP industry. International Data Corporation projects that the ASP market will grow from $150 million in 1999, to over $2 billion per year by 2003.
      This article discusses ASPs and what their potential impact on the GIS marketplace could be. The concept of an ASP in the GIS arena is not new. In December 1995, a friend and coworker proposed a business concept he called "Communities Nowª." Under the Communities Nowª concept, a private company in partnership with a local government would host the government's GIS data as well as a variety of applications. These services would range from map display to search-and-retrieval operations, such as property and real estate applications. Access would be via the Internet. The private company would provide all the hardware, software, security, transaction monitoring, and so forth. Revenue would be generated via subscriptions and/or transaction fees. Both the government and the private company would share in the revenue. Despite a variety of implementation issues, he was actually able to bring this concept to market and prove that this model could work in a production situation.
      As far as I know, this was the first Application Service Provider implementation in the GIS marketplace. Kudos to Robert Starling for his vision. Unfortunately, certain events prevented Communities Nowª from reaching its true market potential. In 1996, this was truly an idea ahead of its time.
      So what exactly is an ASP? How can ASPs possibly impact the GIS marketplace? In a sense, they are similar to an ISP. A Web host loads your web pages onto a server and provides an access service. An ASP, however, does much more. An ASP loads your data and business logic onto a packaged hardware/software system maintained by the ASP. The ASP can and will customize the application. Then they provide a centralized point of access, typically via the Internet. The goal of the ASP is to spare its customers the hassle and cost of buying hardware, software, installing Web hosts, managing the application, and so forth. In return, the customer pays the ASP a subscription fee, typically on a monthly basis, with computations based on projected usage. As use increases, so does the monthly fee. I believe that, in the future, these monthly fees will evolve into transaction fees, much as we pay for phone calls and utilities.
      While most of the buzz about ASPs is in the general IT literature and market, any number of companies have been quietly developing and providing ASPs for the GIS industry sector. Most of the ones I am aware of follow the Starling Communities Nowª model. The majority of the current ASP activity in the GIS market is a logical progression from numerous front counter applications as provided by government agencies. Teranet out of Ontario, Canada, is an example of an ASP that is focused on a GIS-based application.
      Teranet was formed in 1991, as a public/private sector partnership to implement the land registry automation project in the Province of Ontario. This project, called POLARIS, was begun in the early 1980s. POLARIS is actually three systems: an automated title index, a multi-million-page image library, and a seamless digital cadastre. The company was given the additional task of developing new information products and services (including an online remote access), and with establishing an international presence based on its expertise in land information systems and data automation. In 1994 and 1995, the partnership was expanded to include a GIS vendor and a database vendor. The next step was to provide outside access to the POLARIS database.
      Teranet's Teraview® product was introduced in the late 1990s to meet this need. Teraview is a gateway to a completely integrated land registry and GIS system, linked directly to the government of Ontario's automated legal records in POLARIS. Teraview provides seamless access that references and relates databases of textual information, digitized document images and electronic maps. Remote searching, land registration, electronic data interchange, online title insurance policy creation, electronic title document creation and registration, and electronic funds transfer features- formerly intensive Ministry of Ontario operations-are provided as applications via Teraview, thus offering a range of land-based business applications directly to the public's fingertips. Currently, access to maps and information on over 2.5 million parcels is available. Soon a new capability called GeoServer will be integrated with Teraview. This will provide even more applications and access to additional GIS databases. In all cases, revenues are generated on a transaction basis. Teranet's vision is to provide access to even the smallest Provincial municipality so that it can purchase GIS products and services on an as-needed basis.
      The GIS ASPs are today providing fixed application services. However, there is a new trend emerging in the GIS marketplace. In this model, the ASP is providing enhanced application software that customers can customize to meet their specific workflow requirements. This breaks the total reliance of the customer on the ASP to provide all customization services. This capability is very similar to one being able to customize and personalize your Web environment through an ISP. As an example, Syncline Inc., an Internet start-up in Cambridge, Mass., is a spatially focused Application Service Provider (ASP). Syncline's innovative mapping application portal, MapAccess.com, due to launch in early 2000, allows for the creation and customization of Java-based dynamic mapping applications tied to enterprise databases. There are a number of companies that will soon provide this form of ASP.
      With all this apparent activity, why have ASPs not had a greater impact on our industry? There are several reasons stated:
• The requirement for a strong, working partnership between the ASP and the customer. This is especially true when a public/private partnership must be forged. Legal, operational and financial issues must be negotiated from the beginning, and a well-defined and understood contractual framework put in place.
• Y2K. IT providers and buyers have been so focused on Y2K that the purchase of new or emerging technologies and services were put on the back burner.
• Hesitation to be an early adopter of a new service and/or technology. Vendors in the ASP business have found it very difficult to sell the ASP business model and approach to prospects. This is especially true of risk-adverse governmental agencies. With Y2K efforts winding down, with successful ASP partnerships, and with major IT players now entering the market, FY 2000 will be a banner year for ASPs in the GIS marketplace. Should your organization form a strategic alliance or relationship with an ASP? Consider that in FY 2000, over 50 percent of IT expenditures by state and local governments will be for internal and external services. The traditional front counter application is an internal service. An ASP is an external service. If your organization wishes to extend access to geospatial based applications but you:
• Do not want to (or cannot) purchase hardware and software;
• Cannot increase staff size to meet GIS service requirements;
• Want to provide Internet access to spatial data and applications but do not want to develop in-house Web expertise; ¥ Do not want to deal with system administration, applications development, security, and so forth; ¥ Have a good geospatial database and want to provide and easily extend service to your constituents without incurring heavy startup costs;
• Simply cannot afford a full in-house GIS implementation
      Then the ASP route should be investigated. While the number of geospatially oriented ASPs is small, by the end of 2000 there will be many more. Or you can take the route Ontario did and develop a private-partner relationship with a local concern and "create" an ASP that is specifically targeted to meeting your requirements.
      What will be the eventual impact of geospatial ASPs on the GIS marketplace? Clayton Christensen, in his book The Innovator's Dilemma, describes a market force called "disruptive innovations." A disruptive innovation both packages and delivers known technologies or solutions in a way that makes them easier for end-users. History has shown that disruptive innovations can introduce rapid change in a market and have the potential to topple industry leaders. I believe that geospatial ASPs have the potential to radically change the way geospatial services, data, and applications are delivered to the end-user. This is especially true if one accepts that the majority of users of geospatial technology and data will be accessing geospatial applications via the Internet through Web appliances and location-based services. This pool of users, thousands of times larger than the current GIS installed base, will access and use spatial information on a daily basis.
      In the last article, I mentioned MapQuest. In a broader sense, MapQuest is an ASP-even though its primary application has no associated transaction cost. In late December, AOL purchased MapQuest for $1.1 billion in an all-stock transaction. As AOL's Pittman stated, "Like calendaring, maps are a great example of a product that is easier to use and more useful online than offline. With AOL's resources and infrastructure behind MapQuest, we can accelerate the distribution of maps on smart phones, PalmPilots and other non-PC devices. This additional presence will advance our 'AOL Anywhere' strategy, making it more convenient for our members to get the directions they need, wherever they are." This statement has all the prerequisites of Chistensen's disruptive innovation. Furthermore, AOL will use MapQuest to leverage additional subscriber services-for a fee, of course.
      So I will leave you with a parting question. "What happens to the GIS vendor community when providers such as AOL decide to make standard geospatial processing as ubiquitous and easy to use as any other Internet application?"
      In the next article, I will discuss Java and the GeoSpatial industry.

About the Author:
Dr. Carl Reed, director of information technology at Image Matters, he may be reached at: 256-882-9597 or e-mail: [email protected] Dr. Carl Reed is currently an independent consultant specializing in working with both the commercial and government sectors to bring geospatial knowledge into business processes. Dr. Reed also represents Intergraph as their director of geospatial business development. Previously, he was vice president of geospatial marketing at Intergraph Corporation. Reed joined Intergraph in April 1998, after a long tenure at Genasys II, where he most recently served as chief technology officer for Genasys II worldwide. From 1989 to 1996, Reed was president of the Genasys U.S. operation. Prior to that, he was system architect for the team that designed and developed the Genasys product suite. Reed has been an active member of the OpenGIS Consortium since 1994. Before his tenure at Genasys, Reed worked at Autometric for six years as GIS division manager, developing a variety of systems for the civilian branches of the U.S. federal government as well as for the military. Reed worked on such programs as Terrain Analysis Work Station, the cruise missile program, Computer Assisted Photo Interpretation Research, and the Mark 90 proposal effort (the first NIMA modernization program). Prior to his work at Autometric, Reed worked for the U.S. Fish and Wildlife Service, developing an interactive GIS for environmental mitigation. The result of this work was a system called the Map Overlay and Statistical System (MOSS). This was the world's first full-function, interactive vector-based GIS to run on a mini computer. At one time, MOSS was used by dozens of federal agencies. Reed received his PhD in Geography in 1978, specializing in GIS technology, from the State University of New York at Buffalo. Since beginning graduate school in 1972, Reed has published dozens of professional papers, delivered hundreds of seminars, and spoke on numerous conference panels. In 1996, in recognition of his contribution to the GIS industry, Reed was voted by his peers as one of the top ten most influential people in GIS.

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