Sign up for our newsletter
Technology / Data

Q&A: ESRI founder Jack Dangermond

Q. Now must be a good time to be private. Do you have any plans to acquire any public GIS companies whose share price must have been hit hard recently?
A. No. We’re 40 years old; we’re not really in that space. Occasionally we have acquired small technology firms and integrated them when it was appropriate from an engineering standpoint. Because we’re private and “cash rich” we have no desire to be a public company. Generally we don’t operate in that business model.

Q. What is your business model?
A. The vision has not changed since its inception. We focus on technological innovation; we spend approximately 20% of our revenue, which is almost double a normal IT company, on R&D. That amounts to well over $100m a year. By a large IT company’s standards that is pretty small, but for our world, it’s quite extraordinary. We also focus on being an organisation that supports our users. They listen to us, we listen to them and are responsive to what our users need and want.

Q. What are some of the ways in which businesses are using mobile mapping technologies?
A. The most popular mobile mapping technologies are TomTom in Europe and Garmin in the US. Microsoft, with the acquisition of Navteq, and Nokia will play into that space as well as larger players. But they are all consumer oriented: Where is it? How do I get there? What’s around me? Those are the fundamental consumer questions that require GIS behind them. The success of these organisations has largely been to do with the assembly of high-quality content behind servers or copies of the content cached and put onto a device in a car for example.

ESRI is not a player in the consumer mobile space. But we have released several mobile GIS products designed for professionals. One of these enables companies to take GIS into the field. The organisation will create a server of maps and images, and all mobile workers can download data relevant to their application. With that data, and a GPS mobile device, they can see where they are and edit the data. It’s a complete data loop: download data, caching it, then editing it and sending it back to the server.

White papers from our partners

Sears, for example, spent $3m on our ArcLogistics system and saved $43m a year. They also cut their fuel costs by 15% and went from 88% on-time deliveries to 97%.

Q. Does it run on the iPhone/BlackBerry Storm/Windows Mobile/Google Android? If not, when will it?
A. We’ve standardised on Windows Mobile as a platform that gives us a level of device independence. We are looking at other platforms, but see Windows Mobile as a primary IT platform for professionals.

Q. The embedded mapping capabilities on websites often come from Google, Multimap and so on. What is ESRI’s niche?
A. Microsoft and Google, and Yahoo to a large extent, are very much consumer-focused. They look at mapping and geospatial visualisation as one more aspect of search. It’s all about spatial search as an augmentation to traditional web search. This is a very exiting field; it concentrates on a global base map for visualisation and association.

They both become active in being able to support embeddable mapping for locator services and they are both spending between $100m – $150m, a year on developing content for that base map. The technology itself is highly optimised for fast visualisation access; it’s not a GIS system.

We don’t focus on consumer technology. Our field and our customers are the professional market; those that actually build the content that can be visualised on the web, or do the analysis. Analysis is where the big pay-offs on GIS arise.

These two companies, particularly Google, have done a wonderful job of opening the world’s eyes to the power of GIS, particularly in the visualisation world. We appreciate that and partner with both companies.

Q. But aren’t Microsoft’s moves in the GIS space helping to turn GIS into a commodity? Is this good or bad news for ESRI?
A. We work closely with all the IT companies on their geospatial-enabling technologies. We like that partnership. The investments that Oracle made in their database and that Microsoft has made in spatialising SQL server means that our customers can enjoy the benefits of integrated technologies.

We go to market with Microsoft selling our server and their server stack and the user does not have to hire a systems integrator to figure it all out, they just work. From a user perspective, linking our technologies with other IT companies’ spatial strategies is very good news.

Virtual Earth is all about supporting their search environment and visualisation. We have partnered with them to resell those map and images services to our customers, so they can enjoy directly as part of their desktop packages web services from Microsoft for a few hundred dollars a year to look at images and maps from anywhere in the world. That dimension from Microsoft is very much content focused. There are lots of interesting connections between their tools and ours.

We have similar connections with Google, IBM and SAP. Our main focus is on our customers, not strategic relationships with other vendors. If we can find things through these partnerships that help our customers to integrate geography and GIS into their solutions, we’ll feel very happy about it.

Q. You mentioned that there are big pay-offs for analysis with GIS. Does GIS belong under the BI umbrella? Would ESRI sit better under the ownership of an Oracle, IBM or SAP?
A. A number of these vendors, SAP included, have licensed our component software ArcObjects and embedded it in their systems. SAP has rarely bought IT technology from a third party, usually they build it. We’re in a very small handful of companies that enjoy that privilege. That’s because our components are strong and easily embeddable and designed to support developers as well as end-users. We have the same strategy with IBM with their DB2; their spatial extender in DB2 is our technology.

GIS is not BI, but the functionality can support BI. There are elements of spatial analysis and visualisation that are really quite extraordinary for BI work and applications. We have tried to design the technology so that it can be embedded. Some people would argue that GIS is nothing more than BI, but it is substantially more. It’s more than just analytics and decision making. It’s a complete information system.

In terms of being sold to a larger IT company: No. We intend to grow GIS in the same way SAP grew ERP systems. It’s not in our agenda, nor is it a natural thing, that GIS would be subservient to one of the other IT technologies. It’s about how you classify technologies. In our definition, GIS is not CAD, it’s not DBMS, it’s not just spatial data management, it’s not simply visualisation, it’s not document management. It is interoperable with all of those things. It’s a standalone information system that is rapidly evolving as a mission critical system for significant enterprises such as oil and gas companies.

Q. What is your attitude towards open source?
A. ESRI is philosophically very supportive of the open source movement and we have engineered our tools so they live inside an open source sandwich. They run on Linux and other open source systems. We have some significant components of our tools that are open source such as Spatial Statistics, which we purposefully kept in Python open source environments.

Q. Do you face much competition from open source?
A. I don’t think we do. It’s a political movement as well as a technical effort. People who buy our products don’t typically want to buy open source because they want to acquire total integrated support for their mission critical applications. Do we want ambulance dispatch running on a system that’s not as well supported? Arguably a commercial product can bring about better support these days, maybe that won’t be the case in the future. But at this point our general philosophy is that we like the open source movement, we not challenging it, or challenged by it, and we welcome it into the geospatial community because it’s a hotbed of open research that we benefit from and like to contribute to.

Q. You started out in landscape architecture. Why did you get into that and when did you make the leap to the technology side?
A. I started in landscape architecture and environmental science and then went to urban planning at the University of Minnesota and then landscape architecture at Harvard. In my undergraduate years, I became fascinated with quantitative methods and started by churning out questionnaires to people in shopping centres, asking them why they went to this or that shopping area; some were enclosed malls, some were open old towns. I made it a study because I was curious.

At the time, I thought it was because of the architecture or the beauty that attracted people to one place verses the other. I got thousands of key punch cards and ran them through card sorters. I waited for the discovery – the reason why people chose one place over another. In that process, I asked people to voluntarily write down their address; and in almost all cases they did.

The interesting story is that I plotted those addresses on a map and in a number of cases there were multiple shopping areas in the same region. I wish I could say I really discovered the truth to why people go to one place or the other for some aesthetic reason, but nothing was statistically significant.

Geography dominated the story but I didn’t study geography at the time. There are classic geographic theories about central place theory, which I discovered later as a result of this research; I started digging into it and got very quantitative and thought, “This is why people do this or that!” and as a young person, without that science training, I discovered geography.

That caused me to go to urban planning school and study that and geography. That led to the discovery that there was a place at Harvard where they experimented with mapping on a computer; spatial analysis. That lab not only invented the first computer maps, with line printers over-printing alphanumeric characters to make shades of grey. They also invented some of the basic concepts of spatial analysis; trying to inter-relate different geographic parameters, like why are houses being foreclosed in this area but not that area.

That led to a shift in career, because as I got deeper into quantitative methods as a way to understand design and planning and the environment I became very motivated to the idea that these quantitative methods could actually change the world. They could, if implemented correctly, change the course of human action by directing how people located and didn’t locate land uses and activities. And that’s what fundamentally GIS is about. Once I got that concept down, there was no stopping my motivation.
This article is from the CBROnline archive: some formatting and images may not be present.