Geospatial 2.0: Will Traditional Players Lead or Follow in the AI and Digital Twin Revolution?

Building on our previous discussions about the shift from services to solutions, the changing skill requirements, and the need to embrace ambiguity, we now turn our attention to the evolving business models in the geospatial industry.

As we move into Geospatial 2.0, with the advance of geospatial data and the AI revolution, are traditional business models becoming outdated?

That is the question we will consider in this article.

Traditional Revenue Streams in Transition

As we've explored in our earlier articles, the geospatial industry has long relied on relationship-based sales and personal interactions.

The chart above illustrates how relationship sales (35%) and conferences/trade shows (20%) continue to dominate revenue generation methods. While these approaches have served the industry well, they limit growth potential in our increasingly digital and solution-oriented landscape.

The Changing GIS Market Landscape

The concentration of GIS market revenue in the public sector (40%) reflects the industry's traditional stronghold. However, as we've discussed, the future lies in diversifying and adapting to new market needs across both traditional and new sectors.

Digital Twins: A Model for Diversification

The more diverse sector distribution in the digital twin market offers a guiding path .. maybe! This diversification will continue, with the private sector continuing to grow in importance.

The AI and Digital Twin Challenge

In our last article, we discussed ambiguity in relation to both threat and opportunity. The rise of AI and digital twin technologies represents a prime example of how geospatial companies can turn uncertainty into opportunity. By embracing these technologies, firms could position themselves at the forefront of innovation rather than being sidelined.

Bridging the Sales & Marketing Gap

The low percentage (10%) of revenue generated through digital marketing and content creation underscores the industry's slow adaptation to modern sales & marketing strategies. This gap presents a significant opportunity for companies willing to innovate in their approach to customer engagement.

My View on the Future

All that being said, the geospatial industry has throughout its history been slow moving. There are relatively few players who control the space. As I look ahead, I see little significant change in the traditional geospatial sector. The industry will remain somewhat fragmented, with Esri dominating the GIS market and a handful of the larger remote sensing companies owning that space. The many geospatial service companies will remain aligned with larger players, and continue to find growth challenging. Overall, I forecast 5-10% annualized growth in the overall sector.

I believe the digital twin market in combination with AI is where we will see considerable growth over the next 5 years. Recreating the world digitally, by combining 3D and 4D data, allows us to understand better and solve real world problems. That has very broad appeal.

I see the geospatial industry introducing digital twins in the verticals it currently dominates; most notably the public sector. Wider adoption I do not see traditional geospatial driving. I think it will play a supporting role.

In the AEC world mergers like Bentley-Cesium have helped fuel my view. Exciting possibilities here; we will see how it plays out. But overall, I sense that we will see new players entering and driving this emerging market. Indeed, given the many moving parts, this may well not be a single organization but a complimentary group, each bringing their own expertise to the table. This group of collaborating companies will collectively provide a complete end-to-end solution from a product, services and implementation standpoint.

This will mean that traditional sales models will need to be refined as the customer can now be both the consumer of the solution as well as members of the ecosystem that create the solution.

Where and how will geospatial play a part in these new ecosystems?

Larger diversified professional services firms, who have geospatial and subject matter expertise in-house, I believe will provide the geospatial muscle to these groups.

More on this topic of sales ecosystems in a future article.

Conclusion

I believe the geospatial industry stands at a pivotal point of convergence between traditional practices and emerging technologies. Success in this new landscape will require not only technical expertise but also the ability to adapt business models, embrace new marketing approaches, and navigate the ambiguity inherent in rapid technological change.

It is my belief that the real growth opportunities lie in integrating AI, digital twin technologies, and other emerging tech with geospatial expertise. In this article, I have shared my doubts about the traditional geospatial industry leading this revolution from the front. I am happy to be proven wrong.

Whatever the future holds, those who can balance their deep geospatial knowledge with these new imperatives will be best positioned to shape the future of the industry in the era of Geospatial 2.0.

Matt Sheehan is a geospatial expert, who helps geospatial companies grow. Reach him at [email protected]