News of the ESRI acquisition of CACI�s Marketing Systems Group started appearing on Tuesday Jan 8. Though ESRI has not released a formal statement as we go to press, several articles appeared around the Web with further details. The articles themselves are not so interesting as the responses they sparked. On one message board the announcement received exactly NO response. Comments about one article were far more focused on comparing MapInfo�s product and support to ESRI�s. I can only conclude that those replying are just not that interested.

However, the acquisition is significant since it seems to indicate a slight change in ESRI�s direction even if it causes little impact on the GIS marketplace. In the past thirty plus years, ESRI�s acquisitions have included relatively raw technology as well as packaged software. Examples include the SDE technology, AtlasGIS and Mapplex. ESRI even built its flagship ArcInfo on the purchase of the INFO database, release 9. But for the first time, ESRI has consciously bought into attribute data. Of course, ESRI has included some demographic data with ArcView for some years, and as an ESRI representative explained, some is licensed from various vendors and some ESRI owns. That was the arrangement for BusinessMap and Business Analyst, as well. Now, ESRI will have a data arm that in fact �makes� demographic data.

It is worth remembering that the early days of business applications for GIS, in the early 1990s, were the heyday for companies hoping to sell inexpensive software and more expensive data. Strategic Mapping and MapInfo followed that model. Then, when Strategic Mapping closed down, the software (AtlasGIS) went to ESRI and the data arm to Claritas. The tide of whether data and GIS software should live together in a company swung the other way and data giants began to grow. GDT and TeleAtlas are among the largest GIS data vendors these days. This recent ESRI acquisition could be signaling that things are heading back the other way.

Why did this acquisition happen? Perhaps this part of CACI didn�t quite fit with the rest of the business. Perhaps ESRI wanted to streamline its relationship with the data vendor and cut the costs associated with licensing and renegotiating contracts year after year. Perhaps ESRI needed CACI�s experience in marketing business data and applications to further enhance its sales and marketing team in the marketplace. Looking back at ESRI�s history, its early focus on natural resources (the name, of course is really, Environmental Systems Research Institute), years of selling GIS to small and large governments, and a big push toward utilities as Smallworld entered the market, left little energy and resources for business geographics to build momentum.

The practical aspects of the acquisition have not been released as we go to press. Next week, I plan to take a look at those details and some share some thoughts from experts in business geographics.