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Total GIS core-business revenue for 2003 will grow 8 percent to $1.75 billion in 2003, by Daratech's forecast. This compares to a 2.4 percent growth (to $1.6 billion in core-business revenues) in 2002 over the prior year.
Core-business revenue includes software, hardware, services and data products. The breakdown in these areas for 2002 is as follows:
Software comprised more than two-thirds (67%) of the pie, with revenues from GIS software vendors reaching $1.1 billion. Leading the market in software revenues were Environmental Systems Research Institute, Inc. (ESRI) and Intergraph Corporation. Together, the two companies accounted for nearly half of the industry's total software revenues. Other software leaders in 2002 included Autodesk, Inc., GE Network Solutions, Leica Geosystems GIS and Mapping Division, MapInfo Corporation, IBM Corporation's GIS Business Unit, and SICAD Geomatics GmbH & Co.
Services were the second-largest component of core-business revenues. Services provided by core-business vendors accounted for 24% of total core-business revenues, or $393 million - essentially flat with 2001.
Hardware, a declining component of core-business revenues for many years, again accounted for just 5% of total core-business revenues in 2002, or $88 million. Almost all of this came from Intergraph and IBM, both of which have customers that value their ability to offer bundled hardware/software systems.
Utilities and Government Increase Spending
Industries in the regulated sector of the GIS market—utilities, telecommunications, transportation and education—once again accounted for close to half of total GIS core-business revenues in 2002, up 1% from 2001. Utilities grew 8% and contributed 51% of total regulated-sector GIS revenues in 2002, while telecommunications companies accounted for 30%. By comparison, transportation accounted for 10%, and education for 8%.
Revenues from the public sector--the two major segments being state and local governments, and federal governments—grew by 5% and now account for 30% of total revenue. While federal governments were among the early adopters of GIS technology, recent trends toward devolving more responsibilities to states and localities have spurred those entities to become important consumers of GIS. In 2002, state and local government markets accounted for 67% of total public-sector GIS revenue, while federal governments contributed 33%.
The private sector remained flat at 24% of core business. Of the major industry segments within the private sector, earth resources represents the largest opportunity for GIS business, accounting for 43% of total private-sector GIS revenue in 2002. Also notable is the AEC segment, which accounted for 16% of sector revenue. Other significant segments within the private sector include marketing and sales, and cartography.