Ola Rollén, president and CEO of Hexagon, delivered an impressive 60-minute press conference presentation regarding his company’s acquisition of Intergraph. The full presentation with slides is accessible online here.
The detailed analysis of Intergraph’s business units provides a great deal of insight into the technology offerings, their market position, their business model, and their financial performance. The global reach of Intergraph, and their diversity in terms of markets served, has meant that their overall revenue dropped only five percent last year, despite the global downturn, and this is only true of their market reflected in U.S. dollars. If the performance is based on local currencies, without exchange rates and currency fluctuations, the drop is only one percent.
It’s amazing to look at the timeline of Hexagon acquisitions that only date back to the year 2000. The company was built from nothing through acquisitions of Brown and Sharp in 2000, Leica Geosystems in 2004, NovAtel in 2007, and now Intergraph in 2010. The vision has been steadily focused on measurement, and now with the Intergraph piece they add another means to visualize and present their measurement information.
Rollen does a good job speaking about the management and strategy changes at Intergraph that while frustrating to the press, have positioned them well for this acquisition. The picture in 2000 placed Intergraph in direct competition with both CAD and GIS vendors. With the 2003 change in management, Intergraph moved away from this competitive position with a focus more directly on solutions to specific industries. Rollén calls the success of this strategy “pure luck” because today major players such as Microsoft, IBM, Oracle and Google control a lot of the data server and general storage market. Intergraph’s open and collaborative approach has put them in a good position to collaborate with these large players rather than compete.
Rollén spoke to the disruption of scanning technology and the company’s merging of measurement capabilities of all of their measurement tools into the point cloud space. The point cloud helps bridge the input of this measurement into both CAD and GIS, and speeds the merger of the two separate markets.
The approach of Hexagon has been horizontal to date, penetrating different markets with the same technology. With the new acquisition of Intergraph, Hexagon is looking to tailor solutions for specific industry applications with different features. The product offering becomes much more compelling with this ability to tailor their approach. The fusion of sensors and software are essential to realizing these custom solutions.
The move toward 3D, as well as the ability to constantly update and improve models over time, are key motivators for the acquisition. Rollén describes the long-term collaboration with owner operators as a much better revenue picture for his company. Instead of a short project win that is only realized during the design phase of a project, the company will reap much better revenue over a longer-term window by enabling an ongoing interaction with the model to manage and operate the facility. The measurement to facility management shift is seen as a huge revenue opportunity.
The clarity of Rollén’s presentation makes it a must-see for anyone interested in the coming business picture for the geospatial marketplace. He outlines many of the disruptions that are taking place, and expresses great enthusiasm about what the technology will enable in the future.
The last memorable $2Billion dollar geospatial acquisition took place when AOL purchased MapQuest. There the play was about the advertising possibilities of consumer use of geospatial information online, meaning very little for the advancement and use of geospatial technology. This $2Billion acquisition is all about the future evolution of the technology and the much greater role that the technology will have in building and managing infrastructure. It’s about the full integration of geospatial tools to realize the promise of intelligent infrastructure, and I find that to be a much more compelling and energizing vision.
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Would like the full presenation please.
Scott, the presentation link still works for me at: http://storm.zoomvisionmamato.com/player/hexagon/objects/zfjctvqm/#zvm00-13