|
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
|
From
the Publisher Is The Earth Imaging Business Contracting? I recently received a call from a gentleman who works for a major market research firm, wanting to discuss the GIS/Mapping/Remote Sensing industry. He was concerned about conclusions his firm’s recent study had made, projecting a disturbing future for this industry. His worry was that his highly reputable company has conducted a study to determine 2002 revenue projections for the Earth imaging industry and its value-added components. Their figures came in at $1.5 billion as opposed to the $2.3 billion calculated by the ASPRS/Space Imaging online survey. He called me for a reality check, asking, "Am I missing something?" He wanted to know how could there be almost a billion-dollar discrepancy between these two studies. "Which numbers were accurate and more properly reflected the reality of today’s Earth imaging market?" he queried further. Obviously I am no statistician, nor am I a market researcher. Nonetheless, this man seemed, from my inexperienced perspective, to have covered all the vertical markets that represent any real revenue for this industry. He claimed to have also surveyed all vendors industry-wide. This last group may seem a bit suspect because, conservatively, it includes hundreds and quite possibly thousands of small mapping, photogrammetry and remote sensing companies around the world. Getting an accurate handle on this breadth of business activities and revenues would be no small feat. However, he was confident that he’d indeed covered all the markets and obtained revenue projections from everyone who is anyone in the industry. Again, not being a market researcher I can’t accurately comment on his methods or the validity of his findings, nor of those of ASPRS/Space Imaging. As we delved deeper into this discrepancy and examined what was actually happening in the industry, various seemingly unrelated factors started to come into focus, forming a picture of an alarming economic reality. Separate, seemingly unrelated issues began to come into focus, much as pieces of a jigsaw puzzle appear individually unrelated but, after looking at them from all angles, ultimately show their true interrelationship. This is no different than not seeing the forest for the trees, only to discover that the trees are burning and what we’re seeing is really a forest fire. By analyzing the "trees" I uncovered evidence that supports a startling conclusion: The Earth imaging industry is not growing, but actually contracting. I must admit that this is my own conclusion, not that of our researcher. Not knowing which revenue figures are the most accurate and considering the following evidence from my inchoate perspective, I would point to the lower number as those closer to reality. Let us now consider the following circumstances that lead me to this conclusion. Both before and after September 11 the serpentine economic slowdown had worked its way through the economy, now wrapping its muscular, scaly coils around the neck of the Earth imaging industry and choking off much of the mapping industry. At the end of last year and on into early 2002, many of my business colleagues told me that they hadn’t experienced any negative effects on their business. But within the last few months, these same people have turned openly pessimistic. Nowadays I am hearing people comment with bewilderment that they have never seen business so bad. Said one mapping salesman, "Last year was great and this year’s first and second quarter were OK. But looking into the future, projects are few and far between and everybody’s going after them." Naturally there are exceptions to this attitude. I hear reports from others who say that they’re having a great year and don’t see a major decline on the horizon, but these people definitely represent a minority. Traditionally, the primary markets for mapping companies have included city and county entities, whose budgets are now being adversely affected by drastic reductions in their tax base. Yet many vendors in this industry continue to be optimistic, expecting to be on the receiving end of a windfall due to Homeland Security. But I have yet to find anyone who can say with any assuredness exactly where the mapping component to Homeland Security can be found, or what sort of dollar value can be assigned to it. Publisher’s note: This editorial is continued on the EOM Web site at: www.eomonline.com. I apologize for the inconvenience. However, every month, in trying to cut my editorial to 800 words or less, a great deal of what I would like to say ends up "on the cutting room floor." There are some of you who probably prefer it that way. But, for the rest of you, the remainder of this editorial can be read on the web. Thank you for your patience and consideration. Until next time... Cheers! Roland Mangold |