GPS has been with us for many years, and this is what most consumers think about when they hear the term location-based services (LBS). While the satellite-based routing capability needed to help us get directions will remain an important capability for the foreseeable future, location-based services is morphing into something that is well beyond what the original creators envisioned.
Indeed, as we progress to a more autonomous world, the future will be driven by a required knowledge of location, both internally and externally to our immediate environment. This includes in-building and other enclosed spaces, something GPS is not capable of providing. Further, location will be used as a filter for providing many forms of additional related data. Knowing what’s around us is the only way we can operate autonomous “things” as well as mobile devices doing real work. Finally, the notion of what is a map is changing dramatically as high-resolution images, environmental factors, and augmented reality/virtual reality (AR/VR) capability make their way into location-enabled apps.
Currently most LBS are stand-alone applications that operate independently. But location services will be a key component of virtually all future solutions for a variety of needs, including artificial intelligence (AI), AR/VR, drones, simulation/modeling, data analysis, etc. No longer standalone implementations, most LBS will be available as cloud-based services.
An ability to access LBS via a real-time API/SDK is critical to making future services useful, especially in business. While many mobile apps already have an LBS capability, virtually all enterprise apps will ultimately add location services as a component, making it more relevant to users, as well as creating a means to achieve much better outcomes and enable more efficient analysis.
HERE and MapBox aim to change how LBS is used, delivered
How will this play out? The battle for LBS relevance moves from companies that only support increasingly commoditized location data, which they license (e.g., mapping data for GPS), to those that can offer enhanced and supplemental services.
Previously seen as an old-style GPS/mapping data company, the largest LBS company, HERE, is moving away from the old model, although not totally. It’s changing from just being a database to being a value-added supplier of a full range of LBS with its Open Location Platform.
HERE has several partnerships with auto companies (Audi, BMW) and others (Intel, Oracle, Amazon Web Services, Microsoft) to add platform capabilities beyond their extensive mapping database. Those capabilities include value-added services such as tracking, traffic, safety services, and HD maps.
HERE’s main cloud-based LBS platform competitor, MapBox, offers similar services but does not include its own mapping database, instead allowing clients to link to their preferred mapping data.
HERE and Mapbox have some distinct strategy differences: Mapbox relies on others’ data sets and can connect as needed and by user preference. HERE has its own data sets and is looking to add value on top. Both have a value-added strategy that offers location data as a component of a wider need to enable more strategic value in using location — not just a factor in directions, but also as a key component of decision processes. This requires not only expertise in making services available, but partnerships that can form complete and useful solutions that enterprises can leverage.
While both HERE and Mapbox are aiming at changing the way LBS is used and delivered, others are likely to enter the fray in the near term. Google, Microsoft, IBM and other major players see LBS as a necessary capability in future apps and cloud-based services. Whether they go it alone longer term or continue to partner with the incumbent players remains to be seen. In fact, I could foresee one of these mega-players acquiring HERE or another player in this space in the next two to three years as a strategic differentiator.
Bottom Line: Moving beyond just mobile app needs, LBS is a critical component of next-phase autonomous “things,” as well as many advanced services like AR/VR and AI analysis. The days of old-style companies offering only a mapping database are coming to an end. Going forward, success for location services vendors will be about powering the most useful solutions through partnerships, and the location data itself will be secondary, although not unimportant, as accuracy will be critical and commoditized.
Mapping data providers that don’t move to a more ecosystem and more encompassing-based approach will not survive. And the primary winner will be the service provider that can create the most value-added services in conjunction with strategic partnerships that can generate revenues beyond a simple database access fee.
Currently, HERE seems to have the advantage, but the battle is not yet over, as other potential competitors (e.g., Google) are likely to enter the fray. Enterprises will ultimately benefit by this increased reliance on LBS and related services that power enhanced capabilities that improve operational efficiency and personal productivity. Companies should be exploring this technology now.