Back in June, Mapbox received their Series B round of $52.55M. With that, Mapbox has turned up their development on just about everything and had a grand old-time at the Esri UC buying just about every advertising space outside the San Diego Convention Center. At the time Eric said:
We’re creating the building blocks for a complete mapping stack. This extends way beyond a map.
We are excited to announce the close of $23 million in Series B financing to expand CartoDB’s mission, enabling anyone to map their world’s data and leverage the power of location.
This moment is truly important because it sends a strong message about the location intelligence revolution as renowned investors validate our position and direction in this growing market. I would like to acknowledge the hard work done by many people in the company in the process — you guys rock!
Spatial IT is hot stuff right now. That’s about $75M in Series B funding in little over 2 months. Bubble? Probably not as you can’t really say either company hasn’t developed a business and has important clients. 5 years ago there were much more spatial startups running around trying to get money, from GeoIQ and SimpleGeo to WeoGeo1 and Geoloqi all received some funding but ended up being acquired mostly for staff or client lists. CartoDB and Mapbox are of a different beast and their sustainability has been rewarded by large investments.
So what’s going on with CartoDB now? It appears they’re going to continue investing in the core product and make it bigger and easier to work with. I’m excited for them, the elephant is going for a ride!
We were talking this weekend about how much serving up GIS data has changed in the past 3 years. GIS Server used to be so important to many of my friends companies to the point they spent tens of thousands of dollars on it a year. But no longer, each one said that they stopped paying for server because they all use other options. Now before I go on, I want to say this isn’t about sales data of Esri products. It’s more about changes in how people are sharing spatial data. Feel free to replace ArcGIS Server with your favorite GIS server package (Title is a bit of SEO, right? Heck I’m not even talking about ArcGIS Server in this post).
I gave a talk years ago about something we did at the GNOCDC mapping recovery from Hurricane Katrina. You can see the slide deck here and watch the video here. Basically it was the seeds of what we are going through right now. It wasn’t that what we were doing back there was very unique, it was just a realization that GIS can’t be hosting “enterprise” data in a “workgroup” environment. Just like Katrina basically broke the GNOCDC GIS servers, it has become clear that there is almost no way for an organization to use classic GIS servers without putting a lot of load balancing and networking decisions in front of them.
For most companies this is just way too much infrastructure and licensing costs. We’ve seen the rise of CartoDB, Mapbox and ArcGIS Online (or whatever it is called these days). Each has pluses and minuses and while there is overlap, they all do things unique to themselves. But what the big attraction for each is that you don’t have to manage the constellation yourself.
The biggest drawback each said was the unknown in licensing. Most hosted GIS plans are costed in ways that GIS people aren’t familiar with. Mapviews? Nobody has analytics on that until you put it in these services. 100,000 map views sounds huge doesn’t it? But how do you really know? Service credits? We’ve wondered what that even means for years. But I’d wager beers that even with the unknown, you’ll still save money over your ArcGIS Server license or other maintenance you pay for hosting your own GIS server.
We’re at a crossroads here. People have begun to start realizing standing up ArcGIS Server, Geoserver or other map servers makes little to no sense in the new marketplace. Paying for hosting maps is cheaper in the long run, has more availability and is easier to use that classic self hosted mapping solutions. ArcGIS Online for all it’s confusion is beginning to be leveraged by users and everyone I knew at the Esri UC knows what CartoDB and Mapbox do. Back in the old days of WeoGeo, we had to prove what we know now every day. The cost of “doing it yourself” is magnitudes higher than paying for hosting.
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So you probably heard the news last month that Google is ending support of Google Maps Engine.
Maps and location information are valuable tools for businesses – whether it’s helping people find your store locations or identifying sales opportunities across town. To help our Maps for Work customers continue to get the highest impact from our products, in 2015 we’ll focus on helping customers deliver location information via our Maps APIs and shift away from selling any non-Maps API products. We’ll support our Maps for Work customers through their contracts and work closely with them and our partners through this transition.
In coordination with Google, Esri has prepared a special offer for Google Earth Enterprise and Google Maps Engine customers and partners looking to transition to Esri software.
Details have been slim but it appears to be a consulting service to help people migrate their data from Maps Engine to ArcGIS Online. I’m sure other companies are going to jump in and offer services to migrate the data either to other Google cloud services or other online mapping platforms.
But what is the big picture here? Why did this happen? Clearly only Google really knows why they terminated support but I can think of one of two scenarios.
The market for hosted GIS solutions isn’t that big. Google probably had visions of millions of companies using and paying for Google Maps Engine but in the end the effort to continue to improve the service wasn’t worth the revenue coming in. Users leverage Google Maps API but store their information in other locations. Traditional users use Esri or homegrown utilities and new mapping users use other hosted solutions (such as CartoDB or Mapbox). The Google Maps for Work has more upside for Google because it uses their standard products and is easier to share with other Google Services. Small companies such as CartoDB and Mapbox can make money with such small number of customers and large companies such as Esri make up the difference with ELA sales. Hosted GIS is a disappointment and a sideshow for mainstream tech companies.
The market isn’t using Google Maps Engine. While people have dipped their toes in the product, no body is really using it for production work. The Esri/CartoDB/Mapbox solutions are more powerful and better supported. When it came time to put their money down on Google Maps, they choose to go elsewhere.
So which one is it? Probably a little of both as I think the market isn’t mature enough and I think people didn’t use Google Maps Engine. The Google Maps for Work seems much more like a Google service and coupled with the announcement that Google Earth Pro is now free, Google is leaving the traditional GIS market to Esri.
Will this be a new source of revenue for CartoDB? Most likely and one that could be substantial (hopefully). For Esri I can’t imagine this moving the needle enough to make a financial impact. But the big win for Esri is removing a service that was a compeditor for ArcGIS Online which they view as a key to their future product plans.
Win for CartoDB and Mapbox and win for Esri. Probably win for Google too as they can focus on Google Maps for Work. Esri and the others have products to replace Google Maps Engine, will companies like them more than Google? We’ll have to see.