Thursday, March 15. 2007

Pitney Bowes Pays Premium for MapInfo

Pitney Bowes (PBI) has made a play for the location intelligence market today by buying MapInfo offering over $20 per share or 50% over yesterday's close of $13.21. It's in the business of location technology already as it owns Group 1 Software (acquired in 2004), maker of geocoding and address validation software. I think Pitney Bowes sees the oncoming wave of location-based business intelligence (BI). They've got the important piece that companies look for initially which is georeferencing a corporate database; now they are angling for more of the analytical space. It's a good move but I think they'll have name recognition problems if they dismiss the MapInfo brand. They didn't do it with Group 1 so I suspect MapInfo will still be around in some form. Although I would predict that those units would merge.

By way of history, it was Group 1 that acquired Sagent, which had acquired QMS, all of which had solutions for data QA and geocoding. Last year, Microsoft had selected Group 1 for its geocoding engine to support some of its online mapping systems. So, I suspect that PBI can now offer and promote more "location intelligent" (formerly business geographics) solutions and go after other enterprise opportunities. PBI has a market cap of $10B and could try to secure a piece of the BI market.

MapInfo now has a big brother with some cash. Will Pitney Bowes try to acquire a BI company like Information Builders or Business Objects? I think that would be a very significant move and if they choose correctly could develop a niche market for a piece of the enterprise market that wants to spatially enable its customer database quickly.

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The more these GIS companies get bought out, taken private, etc., the more important open source GIS becomes. If you want to be certain that your mission-critical application will still work and be supported in the long run, then why not go with code that can't be taken away? This is where the model of buying application licenses compares very unfavorably against open source licenses.

#1 Allan Doyle (Link) on 2007-03-15 13:17 (Reply)

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