by Natasha Léger

• Added April 30, 2010

Despite the disruptions caused by the volcano eruptions in Iceland 2 weeks ago, approximately 140 attendees from across the LBS ecosystem made it to Amsterdam for the Location Business Summit April 28^th and 29^th, including over 40 senior-level presenters from T-Mobile, Orange FT, Vodafone, Intel, Qualcomm, Ogilvy, BBC, Dell Computers, Google, Yahoo!, Nokia and others.

There was a heavy emphasis placed on revenue models, and considerable attention given to the mobile web, advertising and the social component of location. There is a clear “Race to Place” according to Scott Seaborn of Ogilvy as companies and advertisers are racing to incorporate location and mapping into their products and services and advertising campaigns.  As discussed in the GeoWeb panel, the GeoWeb vision of a location aware web is simple in concept, and somewhat more complicated in execution as the LBS ecosystem and value chain still remains complicated.  It is a B2B2B2B2C chain with evolving business models, power consumption issues, privacy and security, and interoperability challenges between devices, applications, and mobile carriers still to resolve.  Business model discussions revolved around a number of strategies and successes from “location as services” (giving location away for free to drive other products and services) to the traditional licensing model and professional services as companies seek to implement LBS strategies and solutions from integration into new products and services, and integration into enterprise business intelligence and operational performance initiatives. 

The consumer market continues to drive the adoption of LBS as mapping and navigation services are made freely available by Google, Nokia, Apple, and OpenStreet Maps.  However, as this data flows across the wireless and broadband networks, and interoperability issues between devices, applications, and networks remains an issue, some presenters and panelists indicated that the communications carriers might yet to be a wildcard in the evolution of the market. The mobile web (translation computing power in the cloud) will offer individuals an unprecedented functionality and connectivity on devices that fit into their pockets.  The smartphone with GPS, speaker, microphone, camera and touch screen and connection to the cloud, now offers consumers an immersive experience.

On Day 1 the conference opened with an overview of the mobile and LBS market including the growth of social LBS and the prediction that navigation services will be free.  With alternative revenue models top of mind with the consumer trend toward free mapping and location services, David Gordon of Intel outlined a few paths to monetization including productivity tools once everything is geotagged, social networks, security, marketing services, and navigated content whereby people consume content where they are traveling.

Ed Parsons of Google discussed the Age of citizen cartography, and how associating place to people in a social context changes the perception of place—in other words a point of interest is really abstract until it becomes personal and engaging due to social associations with that point of interest which includes photos, conversations, emails, texts, reviews, stories, etc.  He concluded his presentation by saying that “the most powerful computer is in your pocket”.  A mobile phone connected to the cloud offers an unprecedented level of connectivity and an opportunity for applications and functions that were traditionally limited to the computing power of a desktop computer.  Therefore the mobile phone + the cloud will redefine how both consumers and businesses consume and share data. 

In two panels, one on Local Search and the other on Social Location and Community Based Applications, Miriam Warren, Head of European Community Management for Yelp, Sam Critchley, co-founder and VP of Products for Gypsii, Sylvain Grande, Head of Product Strategy Social Location for Nokia discussed the relationship between local search and location-based social networking applications.  The panel concensus was that developing and nurturing community results in the natural evolution of revenue streams and a loyal and stable community of participants.  

Day 2 opened with Alan Sicher, Wireless Product Planning Manager of Dell Computers discussing location aware notebooks and the various potential revenue models including web models, App download models, and subscription models. James Thornett, Executive Product Manager, Local and Location Services for BBC Future Media & Technology presented on the BBC’s integration of location into BBC’s online content from news and search to travel and traffic services.  The BBC, as a public broadcasting service is not concerned with product and service innovation for the purpose of revenue, but instead is focused on customer experience to acquire and retain viewers and defend the value of their public service. 

The GeoWeb panel made up of Gary Gale of Yahoo!, Ed Parsons of Google, Shekar Samanath of Qualcomm, James Thornett of the BBC, Haakon Bratsberg of Opera Software, and Christian Mandl of Maporama, discussed the LBS ecosystem and value chain from Hardware to Enterprise Applications.  Did I mention that I had the pleasure of moderating this illustrious panel?  This was a stimulating discussion on direct vs. indirect revenue models.  As a result of this panel and further discussions later in the day, it strikes me that this topic merits some further thinking.  Gary Gale tackled the reappearing elephant in the room-- “monetization” of location services.  He was very clear in that all companies should be in the location business to make money.  I couldn’t agree more, as a business is all about creating a customer—and a customer is someone willing to pay value for a service.

Here’s the real issue.  Companies of scale like Google, Intel, Qualcomm, Yahoo! are best positioned to manage and leverage the ecosystem to deliver value to their customers or drive sales of their products.  In Google and Yahoo!’s case their focus is on delivering increased value to their advertising customers.  Whereas, Intel and Qualcomm are interested in supporting a market that will drive increased sales of computer and wireless chips, respectively.  So when it comes to monetization of location services, the first question is who is the customer and what are the customer’s needs.  By the way, your customer can also be your investor, potential investor, or exit strategy.  As R&D has essentially been outsourced to start-up companies, this also complicates the landscape. While some companies are struggling to compete in this David & Goliath market (but isn’t always like that? Think GE, Proctor & Gamble, Walmart, Microsoft, IBM, etc, etc.) others such as Telmap, Wavemarket, Skyhook Wireless, Mobile Commerce, Sense Networks, and Maporama seem to have found a niche.  Look for more to come on this topic.

Wavemarket is a key player in ensuring privacy and security around location data as all mobile devices are now location aware.  Joel Grossman, VP of Marketing and Product Management discussed evolution of more sophisticated location services including GeoFencing, Ranges, and Virtual fencing and control messaging. The critical components of managing the privacy and security of location data he said are Control, Transparency, and Notifications.

The consumer market continues to drive the adoption of LBS as mapping and navigation services are made freely available by Google, Nokia, Apple, and OpenStreet Maps as examples.  However, as this data flows across the wireless and broadband networks, and interoperability issues between devices, applications, and networks remains an issue.  Motti Kushnir, Chief Marketing Officer for Telmap discussed the challenge that companies have absent a standardized interoperability environment—companies need divisions/resources for the various platforms for example Java, Bada, Microsoft, Symbian, Apple, Windows Mobile.  An aggregator needs to step up to establish and facilitate these standards.  He said Qualcomm is in a position to do so but the operators are really in the best position to standardize.  He believes that the communications carriers are still positioned as the best channel for LBS because they have better knowledge of their customers; they control the functionality of the devices; they are trusted parties—operators are paid for their service; their biggest asset is their billing infrastructure—although Apple is comparable because of iTunes, and their customer service department.

The mobile web and location-based services are redefining how people and businesses interact with data and each other.  That much is clear.  As a result, a plethora of data on consumer behavior is becoming available.  Sense Networks with its location data mining capabilities from cell phones to taxi cab sensors are developing powerful data analytics. 

The LBS Amsterdam conference covered a lot of ground, and brought together the leaders in the LBS space.  Many conference attendees were looking for more clarification or certainty around how the market will ultimately shakeout in terms of winners and losers.  There are clear leaders and influencers; the question is which business models will win out in the long run, and this appears to be a function of what David Gordon, Director Strategic Planning for Intel stated as “the proper dissection of the market”.

Goto Twitter #locbiz to follow the conference.