Editorial
Editorial |
|
|
Is Small Beautiful?The growth of the industry demands bigger companies.by Jon Fairall |
|
I've just being doing a quick survey of our Spatial Business Newsletter. It records most of the doings of the companies that make up the commercial industry in Australia and New Zealand, so it is probably a pretty good record of what's going on in the commercial sector. It's quite interesting. As far as I can make out, three companies have been formed and six have merged with other organisations. None has been lost, although as we go to press, Formida Holdings is battling to keep its Xmarc subsidiary afloat. The three new companies are Geoz, a venture by academics at the Northern Territory University, Open Spatial Technology, a vehicle to sell an asset management system imported from South Africa, and Enable, a Smallworld GIS shop. Most likely there are many more, but in the nature of the case, they tend to remain invisible until they have reached a certain critical size. The list of mergers includes Kevron, Airesearch, EMC and Tesla, all of which were sold to the Dutch giant surveyor Fugro, Terralink, which was bought by a consortium led by New Zealand Aerial Mapping (NZAM), ERSIS, which was bought by MapInfo, and Abakos, which was swallowed by Sinclair Knight Merz. It's more difficult to speak with authority about what is happening overseas, but the picture seems much the same - a few new companies, a few lost companies, and quite a few mergers. So is this good news or bad news? I think it's mostly for the good. One of the most fundamental structural problems with the industry is that, so long as it remains just a cottage industry - an industry dominated by very small companies with sub-million dollar turnovers and fewer than five staff - it will be an industry unable to invest in its own future. Most companies will be unable to justify the expense of the latest, most productive, technologies. They will be unable to meet the requirements of large clients, have difficulty relating to government and be unable even to bid for large jobs, which require executives to gamble a large investment in tendering for an uncertain outcome. This means that the leaders of any company that is moderately successful in this industry needs to make a decision: either to be a whale or a minnow. There is nothing wrong with this, provided that not everyone makes the same decision. |
If everyone decided to sell up to the next carpetbagger in town, the whole industry would be controlled from New York which would have some impact on the flow of profits. On the other hand, one of the great strengths of the industry is the way new business ideas and new technologies from overseas have been able to percolate quickly through the business. If there were no foreign interests here, that would be much harder to achieve. As it stands, the evidence on this score is pretty good. There have been several foreign acquisitions of local companies, of which the ERSIS acquisition is the most notable, but that has been balanced by the growth of several large locally controlled companies. In Auckland, the emergence of NZAM as a major power in the industry is welcome, as is the growth of Sinclair Knight Merz in Sydney. NZAM has made its leap into the big time with the acquisition of Terralink NZ from the New Zealand government. SKM's emergence as a major player in the spatial industry is also founded on the purchase of a government-owned entity - in this case the commercial operations of the national mapping agency AUSLIG. Interestingly, it now seems that SKM's spatial business is considerably bigger than AUSLIG's commercial operation ever were. May NZAM be so lucky. Either way, it would seem both companies are now big enough to undertake the largest mapping programs likely to be considered in Australia or New Zealand. Who knows, maybe they are even big enough to wean the military of its ridiculous infatuation with all things American - but don't hold your breath on that score. If there is something to watch for, it is Fugro, which, with the acquisition of Kevron and Airesearch, would now appear to have rather an unhealthy domination of the aerial survey industry. It is probably to soon to know if this will turn out well for the industry. Market dominance is not healthy, but it may be that we need a Fugro-sized entity to make the huge investment in equipment that will be required to give customers access to the latest equipment. Correction: Due to a small black hole in the editing process (GIS User 47, p34, Mobile Mapping feature), the Tsunami wearable' GPS, which is under production by Micronics, came out as something entirely different. Apologies all round. |
Top of Page |
Table of Contents |
|
|
