It’s Never Been Harder to Make Money in GIS: The Sobering Economic Backdrop to the ESRI/GeoIQ Deal
by Brian Timoney
Because it’s the latest sign there are exactly two pathways to profitability in traditional GIS: be niche, or be ESRI. You’ve known for the last couple of years that State & Local budgets are decimated, now that same terrible swift sword is menacing the final redoubts of fat geo profits: Federal defense and homeland security.
So one can log onto FedBizOpps.gov and see name-brand contractors chasing sub-$50K work alongside the mom-and-pop shops–fewer dollars and way more hustle and sweat. Or, alternatively, call your buddy at GeoEye and casually ask how things are going.
In GeoIQ, ESRI gets a two-fer. First, with their GeoCommons platform, they bring a lot of proven expertise as to how ArcGIS Online should work. But more importantly they have sexy buzzword-y stuff (Big Data, Social Sentiment Analysis, Node.js) ready to go. As the industry heavyweight, ESRI can turn that secret sauce into multiple 8-figure contracts over the next 24-36 months. As a small startup, GeoIQ could only make a small fraction of that money, as James Fee so bluntly observed. Nimble and agile are great for innovation, but it takes a peculiar type of heft to deal with the federal government at its most profitable levels (just ask Google).
So where does that leave you? Developing a domain-expertise niche, teaching yourself Python, or furiously updating your LinkedIn profile? In a couple of weeks ESRI will have their annual pep rally, for which they have fire-hosed us with some cringe-worthy ad work. But pay attention to the attendees not going to sessions: middle- and senior-level people facing college tuitions and the dawning realization that deck chairs are at a premium. Picture beverages, tight smiles, and gallows humor as to how it’s really going out there.
Disruption feels great when it’s happening to someone else’s industry.