Intergraph Plans a Continued Solutions Push Under Hexagon

The acquisition of Intergraph by Hexagon in early July has made geospatial industry consolidation a hot topic throughout this Summer. V1 Editor Matt Ball speaks with R. Reid French Jr., executive vice president and chief operating officer, about the company’s approach and potential changes under the new ownership. Ball also speaks with Mark Doherty, vice president and chief technology officer of the Security, Government and Infrastructure division,, about the company’s geospatial technology underpinnings and vision.

PART ONE: Positioning and Strategy

V1: Hexagon has been a large industry player since they purchased Leica Geosystems in 2004. What does this new alliance mean for Intergraph, and is there any broader planning taking place to integrate some technologies?

French: Hexagon is a company that has been highly acquisitive over the past ten years, having done a number of acquisitions in the geospatial arena. The way that they go to market is around precision measurement in one, two or three dimensions. Their original major acquisition was Brown & Sharpe out of Delaware that focused on metrology, with measurement machine tools. Their second major acquisition was Leica, and Leica at that time had purchased ERDAS. ERDAS is the software component for imagery analysis. Leica primarily is a specialty hardware company that focuses on laser scanning and other measurement devices. Intergraph will be their third major acquisition.

The genesis behind the acquisition is that they have a lot of specialty hardware that they sell around the world, and much of it is around general geospatial input, but they have very few software assets. They don’t have a good software platform or company to provide better integration of measurement through all their hardware tools. So, Intergraph has been purchased as a standalone division within Hexagon to provide that function.

They view all of our software assets as a presentation and analysis layer to display rich geospatial and CAD data. In addition to geospatial software, we have a computer-aided design division that does 3D CAD design and modeling for process plants.

I’ll give two use cases as an example of possible integration. For our Process, Power and Marine (PP&M) division, Hexagon has a laser scanning system that’s used a lot in brownfield oil plants. A lot of times these facilities were built before the advent of 3D computer-aided design platforms, and there’s actually no electronic data in a 3D format for what was built years ago. They set up the laser scanning equipment to take an image of the as-built. That information is often the beginning of our Process, Power and Marine workflow. We take that information and input it into our SmartPlant 3D, and we use it to begin to create an intelligent model.

The 3D model from a laser scanner is not intelligent, as it visualizes the pipe structure, but doesn’t know the gauge or properties of the pipe. Our application creates that information, which is then used for maintenance or to change it, whether you’re going to add to the structure or shrink it or change the process itself. That’s all done within Intergraph’s 3D CAD applications. Today the connections between laser scanners and 3D software applications are there, but they’re relatively weak. We think there is an opportunity to strengthen them so that they come closer together and add value to our clients.

The other area for integration is in our Security, Government and Infrastructure (SG&I) side where the output from Hexagon measurements from aerial and ground-based sensors, and laser measurement, should be visualized in a GIS application. Historically, those connections have not been that good, so we’ll see our GeoMedia application import that data to create a visualization and then begin to do analysis around it.

The one thing that you’ll find at our core level is that we’ll continue to look at ways to make the data handoff from their devices into our applications easier for our customers. I don’t think you will see us moving away from our vertical focus. We will continue our strategy of having vertical market solutions to fit the industries that we target, including public safety, military & intelligence, government, transportation, utilities and process, power and marine markets. We’ll continue to focus on those markets, and the workflows that they have, so that we can deliver a solution to them that solves their needs, versus just a broad platform.

We don’t want to be a platform-oriented company in the way that you think about Google Maps or even an Esri ArcGIS product. We want vertical solutions that solve specific needs that are tailored to specific industries.

V1: So, the focus would be more on a hardware/software solution set versus the whole geospatial data workflow of data capture through visualization?

French: It would be. An example of this is one of our largest geospatial customers, the UK Ordnance Survey. We have a large implementation there, and it’s also a large Leica customer with the creation of all of their survey data. There is lots of custom code that is written by our customers to solve the data workflow, but there’s no reason why that can’t ultimately become an off-the-shelf integration for them that’s maintained and managed by a software vendor.

You’re not going to see that every sale that we make at Intergraph will have a hardware component to it. That’s not going to be the case. However, our goal is to make things easier for our customers, and we want good integration between devices, the data coming off the devices, the input into our software products, and the visualization that provides analysis of that information.

V1: I’m interested in the business marketplace that leads to the platform not being as important. Certainly, the long-term multimillion dollar contracts to set up a GIS for a large enterprise like an electric utility are really gone, there simply aren’t that many from-scratch implementations. Is that reality the primary driver behind more targeted solutions? You’ve obviously had some good success with that approach.

French: The reality is that geospatial is becoming more of a key feature or function of a solution versus the driving force for what a company is after. There are customers that say they need a GIS platform, but more and more they are trying to automate a workflow, and GIS is a core function of that. Consumers have the same kind of motive, where all the navigation devices provide a workflow solution to get from point A to point B. It’s obviously using geospatial data and location tracking, but people think of it as a navigational system.

The same type of analogy is occurring in government, utilities, transportation and public safety. They have a workflow they are trying to address, and geospatial is absolutely a key feature and component, but it’s the workflow itself that they are trying to automate and are out to buy. Public safety is probably the best example of this. When they buy the application, they are looking to automate the emergency response mechanism. When you dial 911, you want to get the right emergency service to the right person as quickly as possible. That’s the core problem they are trying to solve.

Geospatial has a huge role in that, because the first part of any 911 call is where is the person calling from, and secondarily you want to know where your response vehicles are to get them there as quickly as possible. It’s a geospatial problem, but it’s not thought of as a geospatial platform. We have a whole series of applications that help solve this problem. We were the innovator 20 years ago when we brought an interactive map to this problem; it was our original innovation in this space.

We are seeing that solution mindset more and more. A vanilla example in transportation is a representation of where my roads are, versus a workflow of weight permitting - that’s something new. Weight permitting is something where people want a specific application to solve that specific problem, and Intergraph can solve that issue.

V1: How do you get to the point of offering a highly workflow-oriented approach? Instead of investing in a core platform, have you forged alliances or brought domain experts on board?

French: First off, don’t take away from this interview that we’re not making investments into the core underlying geospatial platform. We’re investing, but it’s not what we go to market with to sell. We’re selling the solution for particular industries, but we have to continue to modernize our geospatial platform. We’re making the transition from the desktop to web services, and we feel the need to be at the forefront of spatial data infrastructure (SDI), both in America and in Europe with the INSPIRE initiative. We have to maintain, and want to maintain, our forefront position there.

The hardest question for us is which applications and market spaces to pick. We want to pick issues to be solved that are universal across the world, and we have to also pick a market that is deep enough to maintain and support a COTS product that is specific to that issue. Going back to public safety, that is an area that we chose because the public safety problem is the same at its core regardless of where you are in the world. Someone is hurt, they need help, they make a call to an emergency response center, and you have to know where they are and get the right emergency service to help them as quickly as possible. That’s an area that we’ve really sunk our teeth into.

Utilities and communications is another example of a market that we’ve gone really deep into. The ability to manage a grid, and to deal with emergency outage situations, to get the right truck to the right place first, is another one of the same problems that you see around the world.

The secret sauce is to make sure that we pick wisely. We take a look at the platform advancements that we need to make every year to stay on top of evolving technology, and we also take a look at the industry-specific solutions that we’re going to address each year to solve specific problems.

V1: What is the timing on the move to Hexagon, and will there be significant changes in how you package and market yourselves?

French: The announcement occurred in early July, and the deal has to go through regulatory approval, which is normal and customary for a transaction of this size. We do expect that we’ll end 2010 by becoming part of the Hexagon group as a standalone subsidiary, and as the software platform for their company.

Our competitors are spreading the word that this changes the product road map, and that we’ll be shutting down products. None of that is true. They bought Intergraph for all of our software assets. There is no asset that they don’t care for, and they like the vision that we have for the industries that we serve. They want to continue to invest behind that vision.

Intergraph has made great financial progress over the last five years. We’ve grown from $500 million in revenue to more than $800 million. We’ve been one of the fastest growing spatial information management companies, and they want to continue to back that vision.

I know everyone likes to have a big story about the disruption from a big acquisition, but I don’t foresee that. It’s a change of shareholder for us, moving from private equity firms to being part of the Hexagon group. We have the opportunity to play a lot more within our company around the specialty hardware that is the original input into our systems. We’re excited about that, and we have a lot of R&D folks all over the world that are waiting for the transaction to close so that we can jump into that.

V1: Will there be changes in your sales structure, and how you market yourselves?

French: We’ll probably be branded Intergraph, a Hexagon company, because the Intergraph brand has such a strong awareness around the world. Relative to sales, I don’t think you’ll see a lot of change, but there will be opportunities to partner with sales in our sister companies. We sell software, and the Hexagon companies mostly sell hardware, and those are different things. I think it is more about partnering than about a wholesale change in how we approach the market.

PART TWO: Platform

V1: There was an announcement recently that the GeoMedia platform will be embracing 3D visualization. How is that effort progressing, and what are some of the details about this new capability?

Doherty: The release of GeoMedia 3D will be announced at our user conference in Las Vegas next week. In its first instance, it’s a general-purpose 3D viewer. We’re introducing an integrated capability inside the GeoMedia environment to visualize 3D models. We’re looking at 3D as just another window inside of our GeoMedia environment.

The results of any raster-based or spatial analysis will be available immediately inside the 3D view, just as they are in the 2D view. It’s not a case of having to cross over from one kind of application to another or do any kind of data transfer. It’s a fully integrated 3D capability within the GeoMedia environment.

In terms of future plans, once we get the general-purpose capability under our belts, we’re looking to apply that 3D capability to specific solutions. In the infrastructure space, we’ll apply that to a bridge or structure in order to go beyond floor plans to look at things as models. We’ll be applying the capability to the vertical markets where it makes sense.

V1: Will the next step in this modeling push involve more inputs such as sensors into the model, and also simulation to do some scenario-based planning?

Doherty: Certainly, we’ll integrate sensor input into the model. If a fire alarm or a gas detector go off, the ability to see where that is in three-dimensional space is very important. You get precise location, instead of an approximation on a floor plan. Ultimately, we’ll be able to locate things in three-dimensional space and to track the assets that respond to incidents in three-dimensional space as well.

V1: I have to think that the Hexagon alliance, and their ability to capture things in 3D, will accelerate your development there. Are you excited to have this input from the data capture side of the 3D space?

Doherty: We’re not in a position where we’re working together now, but if you look ahead, having the ability to draw on their 3D expertise on things like point cloud handling, and performing feature extraction , will serve to accelerate some of the things that we would like to do. I’m certain they have a vision for the 3D space that we’ll be able to assist with as well.

V1: Sensor fusion is an area of increasing interest, to streamline and bring different data types together more quickly for enhanced insight. That seems also to be a positive outcome from the acquisition, as Hexagon is an originator of many different sensor data types.

Doherty: A lot of the platform work that we’re doing on fusion is manifested in a product that we’ve released, GeoMedia Motion Video Analyst, that does the fusion of georeferenced video into a traditional 2D, and ultimately 3D view, of the world.

I was taking a look at the interview that you and I did a few years ago, and I think we still have one of the same major obstacles in front of us, and that’s the whole area of standardization. Even when we’re dealing with video, it’s still kind of thewild west with all kinds of different standards and various implementations of standards. Certainly, one of our biggest challenges, in terms of sensor fusion across the board, whether it’s video, alarms or CBRN (chemical, biological, radiological, and nuclear), is to try to move toward some level of standardization. The Open Geospatial Consortium (OGC) standard for Sensor Web Enablement (SWE) would certainly make it a lot easier to accomplish some of these integration jobs.

In the video surveillance and video camera area particularly, each vendor has their own way of doing things. When we go to a customer in a transportation security scenario, typically the biggest part of the job is having to figure out how to integrate video cameras from a programming perspective. With each job, you’re virtually starting from scratch on the camera, video processor or video management system side of the equation. A standard like SWE would have the ability to put that kind of standardized wrapper around those systems, and I think it would be good for the industry in general. Hardware manufacturers have proprietary things that they do, and sometimes standardization may be difficult for them, but it’s a case again where customers need to demand standardization.

V1: With your services-based approach, cloud computing seems to be inline with how you deliver applications. Is there thought to deliver cloud-based services?

Doherty: We certainly have some ideas. We don’t have any imminent announcements on a cloud-based solution, but we’re doing some research in that area. Most recently, we’ve been doing some work to take our GeoMedia WebMap application set and potentially have that certified to be able to be deployed in an Amazon EC2 installation. That would give our customers the option to take a WebMap installation that they would have traditionally deployed on their own servers inside their own firewall, and look to deploy that in the cloud using Amazon infrastructure. That’s a first step in the direction to let people take advantage of the cloud.

As you’re seeing, a logical extension to that would be to start offering more specific solutions on the cloud. We’re quite surprised, even in places like public safety, that there isn’t much resistance to cloud-based solutions. Smaller agencies, that don’t have a lot of their own information technology capability, are really quite open to looking at those kind of cloud-based solutions. Some of the investments that we’re making on our platform right now are being made with an eye toward being able to deploy more of our solutions in the cloud in the future.

V1: A lot of companies are using the cloud to reach the low-level customers, to get the word out about what the technology is capable of doing. Many are providing free solutions to do that. With Intergraph’s emphasis on solutions, are you looking at such applications to market your capabilities?

Doherty: We haven’t taken the approach to do something like offer a free buffer zone service in the cloud. What you’re more likely to see is for us to offer access to solution capabilities through a cloud infrastructure or architecture. We’re closely tracking Microsoft Azure, because we’re a Microsoft development shop. We’re also working now with Amazon’s EC2 and are excited about their virtual machine technology because it really allows a vendor like us to take a solution and hoist it up on the cloud today.

Some of the other things that we’re looking at that we need to do work on are things like multi-tenancy. Many applications were architected for a single user or a single agency. If we now want to start offering those on the cloud, we want to understand the best way to do it. Even though our incident management application has been adapted for use in multiple agencies, we’re looking at whether to roll a number of different instances out or take a look at turning that more into a multi-tenant application that can be used at many different agencies. These are some of the same things that many others in the industry are having to work through.

V1: With all your spatial data infrastructure (SDI) work, there’s a big move to greater openness, transparency and collaboration. Are you working issues of normalizing data from many different places in order to streamline collaboration?

Doherty: We’ve gone through a couple of different phases there. With some OGC and ISO standards, I think the industry has a pretty good handle on the ask-and-answer part. If I use WFS or WMS, I can go to a server and ask it to tell me what you have, and give me a map with that, and I get back a raster image or GML. Certainly something that we’re seeing in Europe driven by the INSPIRE initiative is taking that to a next step, and that’s moving toward normalizing or rationalizing some of the content.

If I ask for a road network or hydrological network that straddles an international border, I need to get something that is homogeneous so that I can work with that as a single set of data. There’s a lot of work going on nowdealing with the semantics to map out different data and classifications to match even though the data may span a border or multiple data sets. That’s a really difficult problem. We’re trying to bring some tools into the back end of SDI that do some schema mapping, generalization and re-mapping of data so that those kinds of data challenges can be met, in addition to putting data out there through standard interfaces.

V1: Data quality continues to be a big problem in the geospatial space. A lot of organizations have such poor quality of data that it limits what they can do with their GIS. Is that something that you combat as well?

Doherty: When you go back to the point where web mapping first went online, one of the phenomena that happened was that we moved from just five people viewing and analyzing data to a thousand people all looking at this data. As more of this data is made available through SDI or other techniques through the web, that traffic will increase and they’ll demand to know why certain features aren’t on the map or that the data is wrong.

All of that traffic is putting pressure on both commercial data suppliers and organizations like cities and counties to keep the data sets current. Certainly with the priority data sets, there’s a move to revision cycles that are quicker.

Our work in public safety globally puts us front-and-center on that issue. Regardless of where the data is coming from (a commercial supplier or an agency’s own data) that map has to be accurate and it has to be current. When we go in and install a public safety system for the first time with a given customer, we often run into a lot of issues with data currency and data accuracy, and there’s a lot of scrubbing that typically has to go on there.

V1: Given your work with the field crew side of a utility or the first responders in public safety, your work away from the desk seems to be a big component of your business. What kinds of trends are you seeing in field-based work?

Doherty: Just in the last year, we released a new mobile client for our public safety application suite, and we’re continuing to invest in our mobile capabilities for infrastructure management (electric, gas, communications and water). The bottom line is that with the increased bandwidth from 3G and 4G, people want to do more and more in the field.

I think it’s a mistake to say that people want their desktop from the office in the field, but they want a lot of specialized capability and they want to do a lot of things in the field. Greater network bandwidth is enabling that. We are also being driven by our customers to look at more handheld devices. There’s interest outside of traditional ruggedized laptop type devices to devices like the iPhone, Blackberry and other smart phones. We’re getting requests from all of our vertical markets with lists of functionalities that they want to be able to perform on a handheld device.

I think we had a bit of a false start in the geospatial industry with that. As you’ll remember 10 years ago, we were seeing a lot of buzz about the iPAQ. I think there were many of those that were left sitting in desk drawers. This time, I think it’s for real, and there are valuable things people can do with those handheld devices. We’re spending time and money to understand what people want and to roll out some of those kinds of applications.

V1: Because you’re not selling a platform, but solutions, is there any focus on engaging software developers to further enhance or customize your solutions?

Doherty: I’ve been at this game a long time, and done a lot of work globally, and if there’s one thing that we’ve learned it’s that while there are commonalities between systems for the North American market and European market, they’re not the same. They’re different for utilities, land management, public safety and spatial data infrastructure. The ability to customize and tailor a solution is essential.

We sort of think about it as a bar that we need to continue to raise so that the percentage at the top of the bar where we have to do customization or configuration work stays low. We do a certain amount of that ourselves through our regional offices. We also have a global network of partners. They take the core products from Intergraph and adapt those into solutions for specific countries. That’s an increasing amount of our business, because there’s no getting around the need to tailor these solutions.

V1: One of the challenges that I see with the solutions mindset is that there aren’t a lot of people that are learning your platform.

Doherty: One of the ways that we deal with that is through our own software creation and customization capabilities. We don’t just throw a platform over the wall and hope there are partners that will adopt it. For example, we have a sizable operation in Central Europe where we’ve built our own utility infrastructure management solution on top of our core platform for the region. The industry experts that developed that take it to market for that region. That’s been quite successful. What we have to do to be successful with this model is to stick to specific industries and target them. We obviously can’t cover everything that way.

V1: Is there anything that excites you in terms of technology development or market opportunities that we haven’t touched on yet?

Doherty: I think the biggest opportunity, and the thing that excites me the most, is around the intersection of service-oriented architecture, cloud computing and virtualization. This integration could potentially change how a lot of applications are delivered to users.

It’s exciting to think about being able to put a lot of intellectual property on a server, run those business rules on a server, and then be able to effectively host that via cloud computing with lower overhead. The combination is going to transform the way that a lot of IT is delivered, including to Intergraph customers.