Back to SCS home page
GIS WORLD STOCK WATCH
Consulting services compose one of three groups of companies in the the GIS WORLD Stock Index. The group consists of five company types: consulting companies, system integrators, conversion vendors, photogrammetry/digital orthophotography firms and satellite imagery companies. A brief explanation of each is contained in "types of GIS Service Companies", below.
In terms of size, the service group represents about one-fifth of worldwide GIS revenue, or a few hundred million dollars annually. Although most of these companies are privately owned, those that are publicly traded, and their major service categories are as follows:
Other system integrators include IBM Corp., White Plains, N.Y.; Unisys Corp., blue Bell, Pa.; and Digital Equipment Corp., Maynard, Mass. Additionally, Michael Baker Jr. Inc., Alexandria, Va., is involved in photogrammetry. Because these four companies derive only a small portion of their revenues from GIS, however, they aren't included in the index. Despite a principal service mentioned for each firm, most offer a variety of services. Some, such as Intergraph and IBM, also offer hardware and software. Generally, photogrammetry is the most profitable of the five types of service firms.
The GIS WORLD Index Falls
Historically, October isn't a friendly month for the stock market. This was the case for the index stocks, declining an average of 8 percent. The market overall, as reflected by the S&P 500, was unchanged. Of the nine stocks that comprise the index, seven declined. Intergraph was unchanged, and only Analytical Surveys showed an increase (7 percent). The two largest declines were suffered by AutoDesk Inc., San Rafael, Calif., and Landmark Graphics Corp., Houston,Texas, each of which was off more than 20 percent, primarily due to concerns of reduced revenue growth.
The sale of Intera’s petroleum division to Schlumberger's GeoQuest Division, Houston, should close in November pending shareholder approval. Landmark reported revenues below expectations, by a few percent, due to changes in its sales and marketing groups, and the expansion of its consulting organization to develop an integrated solutions approach. An earnings focus on the index stocks covering the September quarter will be provided in next month's "Stock Watch" column.
Types of GIS Service Companies
GIS WORLD Inc., January, 1996; pp 76.
Consulting Companies - provide project direction and include front-end studies, database design and project management. Leading firms include UGC Consulting and PlanGraphics.
System Integrators - design and build enterprise systems by integrating a combination of software, hardware, databases and services. Major accounting firms have lessened their activities while certain hardware vendors (IBM and Unisys) have increased theirs.
Conversion Vendors - convert client records for use with software and GIS, and often involves dealing with errors, omissions and quality assurance. It is labor intensive, often includes outsourcing and provides little repeat business or future growth.
Photogammetry and Orthophotography Firms - Photogammertry involves generating vector-based maps built from a combination of images that are sequenced together. Digital orthophotos are more cost effective by using raster based maps that look like a photograph, but each pixel is corrected to reflect terrain differences. These firms require specialized skills and expensive equipment and have usually been limited to the region their aerial photo archives cover.
Satellite Imagery Companies - have emerged since the demise of the cold war by obtaining rights to use satellite imagery controlled within defense programs and then reselling the images for a variety of commercial uses. It provide a threat to aerial photo firms by replacing high-altitude aerial photography.
(This article was reproduced with permission from GIS WORLD Inc.)