• January 26, 2010
  • By Jessica Tsai, Assistant Editor, CRM magazine

Here, There, and Everywhere

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Talk about being in the right place at the right time: When Natasha Léger debuted LBx Journal, the publication she cofounded, at last May’s Where 2.0 conference, she thought of that first issue as a much-needed solution to a long-unaddressed problem—delivering, as she puts it, “location in the language of business.” 

Location-specific data is a relatively new concept, and the full potential of its enterprise value remains unclear, but the industry has rallied around the statistic that perhaps 80 percent of company data is location-oriented. Even so, traditional geographic information systems (GIS) have been expensive and proprietary, reserved primarily for companies with big budgets or mandatory location-based needs (e.g., utilities or communication companies). 

“There’s all this advanced technology, [and we] find all this information from a map perspective,” Léger says, “but we’re still fighting with [technology] to get real, actionable information out of our systems so that we can make better decisions.” 

Despite the value of location data, GIS has rarely been integrated with business systems such as CRM or enterprise resource planning (ERP). Anyone trying to understand how to tie location into the business, Léger says, had no place to go. “The business processes and systems—and even key performance indicators—haven’t really been developed from a location perspective,” she says. 

LBx stands for “location-based x,” a nod to the idea that “all products and services are connected to location.” Though the “x” is unique to each company (e.g., location-based inventory, advertising, product development, supply chain management), readers of LBx share one commonality in that they are the “non-techies,” the chief “x” officers (CXOs), or the business managers—the people who need to make important decisions related to location. 

Prior to launching LBx, Léger noted a rising interest in location at her second gig as president and founder of market intelligence and strategy advisory firm ITF Advisors. The uptick, she says, can be linked to the consumerization of location technology. More cars equipped with global positioning systems (GPS) or personal navigation devices (PNDs), kids printing out directions to their friends’ houses, advanced-yet-user-friendly downloadable tools such as Google Earth—location was, literally, everywhere. 

As with many Web 2.0 technologies, businesses struggle to balance the needs of managing organizational stability with innovation. The years of waiting, however, seemed to be coming to an end. “We all have this sinking feeling that the world is moving a lot faster than any of us anticipated…or are even able to keep up with,” Léger says.

Hitting Consumers Where They Live (and Do Everything Else)

While commercial GIS technology dates back to the 1980s with releases from firms such as the Environmental Systems Research Institute (ESRI), Léger says it wasn’t until the 2005 public release of Google Earth that location-data interest among business users really took off.   

“Consumer technology is driving enterprise technology,” Léger says, making the transition “a lot easier than we thought.” The shift is most notable in the expectations younger generations have as they enter the workforce—specifically their belief that if they’re able to navigate and customize a map at home, they shouldn’t have to tolerate an archaic multimillion-dollar system at the office. 

Traditional GIS applications typically work with industry standards such as shapefiles and keyhole markup language (KML), explains Tom Link, managing director at SpatialKey. However, he says, “those things are foreign languages to decision makers.” Shapefiles originated from ESRI and KML from Google (or, more accurately, from Keyhole, which created the forerunner to Google Earth before being acquired by Google in 2004). KML is also the standard for the Open Geospatial Consortium (OGC), comprising 384 companies, government agencies, and universities that, according to the OGC site, aim to “geo-enable” the Web, location-based and wireless services, and other technologies. 

Some decision makers, however, have ambitions that are far more mundane. Armed with simple, lower-priced options such as SpatialKey—which can use (but don’t need) shapefiles or KML files to visualize and interact with data on a map—these executives merely want to make sense of the explosion of location-based data landing in their Excel spreadsheets, a newfound bounty attributable to the rise in geolocation-enabled smartphones.

These devices are helping to popularize geolocation by enabling, for the first time, access to location-based data at any given moment at the user level. According to predictions made by ABI Research in the third quarter of 2009, 1.1 billion smartphones were expected to ship worldwide in the calendar year. That would represent a slight decrease from the 1.2 billion shipped in 2008—not bad, analysts say, given the economic recession. More important, however, is the fact that ABI estimated that 21 percent of all handsets shipped by the end of 2009 would have GPS capabilities. 

The mass market is increasingly embracing technology once reserved for geeks, especially as prices continue to drop. According to ABI, the share of smartphones that cost less than $200 was only 18 percent in 2007—but that figure is now 27 percent, and is expected to rise to 45 percent by 2014. “We may never see a $30 smartphone,” said Kevin Burden, ABI’s mobile devices practice director, in a press release, “but over time, smartphones will take a substantial part of the mainstream handset market.” 

“The most obvious, or most visible, way you can see how popular location is becoming is the number of location apps in the different smartphone-application stores,” says Dominique Bonte, ABI’s practice director of telematics and navigation. As of September 2009, location-based services provider Skyhook Wireless identified more than 4,000 location-based applications for the Apple iPhone App Store alone (out of roughly 100,000 applications total). Skyhook also noted more than 700 location apps in Google’s Android Marketplace, as well as others in Nokia’s Ovi Store, BlackBerry App World, and the Palm App Catalog. 

As location capabilities grow more prevalent on phones, PNDs may be suffering as a result. “It’s going to be difficult to convince consumers to pay for that additional service,” Bonte says, adding that a “converged revolution” may make smartphones the Swiss Army knife of applications. “There doesn’t seem to be a limit to the creativity,” he says. 

In late October 2009, the International Telecomunications Union projected the number of mobile subscribers to reach more than 4.6 billion worldwide by the end of 2009, far eclipsing the number of Internet users (fewer than 1.7 billion, as of June 2009). Carriers, handset manufacturers, and application providers all have tremendous amounts of data about where the customer is—data extremely valuable when it comes to personalizing the customer experience. 

Data acquisition wasn’t the obstacle, nor was the task of analyzing any given data point. “It’s very easy to use one location point,” says Greg Skibiski, chairman and chief executive officer of four-year-old geolocation services provider Sense Networks. “‘I’m here and now find me the nearest pizza place’ is super-simple.” 

On the other hand, making business decisions based on location was “impossible for anyone to do four years ago,” Skibiski recalls. “It was much harder than we thought to analyze this.” The real challenge, and why Skibiski suspects location data took so long to catch on, is the sheer quantity. “There was too much data to store,” he says. “No one wanted to dig into it.” To make matters worse, Skibiski says, the tools at the time weren’t accessible to anyone without specialized training in geolocation, and the infrastructure simply wasn’t scalable.

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