Freemium Business Models, Part 2

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Freemium Business Models, Part 2

Key Takeaways


ESRI (Environmental System Research Institute) is the global market leader in GIS (Geographic information systems). Since its inception in 1969, the organization has been at the center of identifying data-driven solutions to the world’s most complex problems. It achieves this by providing platforms through which government agencies develop answers to governance issues. This report examines how ESRI markets itself to government agencies, the products it sells, and how it acquires and maintains business with government agencies.


Company overview

  • ESRI markets itself as the global market leader in GIS. Over the last five decades, ESRI has managed to transform the concept of GIS into a science with demonstrated value for problem-solving. The company has developed many of the GIS mapping and spatial analysis methods that are now standard to GIS.
  • As the science of computing developed, ESRI refined its software tools. Working on projects that solved real-world problems enabled ESRI to innovate and design robust GIS tools and methods with broad applications. As a result, the company’s work started gaining recognition in the academic community, especially in the fields of spatial analysis and planning. In 1981, ESRI developed ARC/INFO to handle the increasing volume of projects it had, thus marking its first GIS product launch.
  • Today, GIS provides a platform for people to create their own digital maps and help solve real-world problems. It has become a means for collaborating and sharing data. Hundreds of organizations now share their work and create millions of maps that tell stories, reveal patterns, relationships, and trends about almost everything.
  • National governments use GIS technology to evaluate policy outcomes and manage programs. With this kind of technology, government agencies integrate diverse data types to operationalize solutions, derive understanding, communicate insights, and engage stakeholders/public on matters of interest.


  • ESRI’s suite of GIS software products goes by the collective name ArcGIS. This includes GIS and Mapping products, Geo-enabled products, and location analytics tools. Collectively, ArcGIS capabilities include Mapping, Field Operations, Spatial Analysis and Data Science, Imagery and Remote Sensing, Real-Time Visualization and Analytics, 3D Visualization and Analytics, Data Management.
  • ArcGIS offers practical solutions to Business, Government, and Industry needs. Solutions to government needs include Civic Inclusion, Asset Tracking and Analysis, Crisis Response, Economic Development, Operational Efficiency, Planning for Sustainability, and Safety and Security.
  • To develop a better perspective on how ESRI markets itself, we look at a few areas where its suite of GIS products finds application.

Example Areas of Application

Data Sharing

  • In collaboration with ESRI, federal agencies using ArcGIS can share data in open formats and feed that data directly through the government website For example, disaster management agencies can use ArcGIS to respond to natural disasters through Apps and dashboards that help responders quickly identify vulnerable populations, locate resources, and visualize routes to these resources in real-time.

Disaster management, Health, and Safety

  • Another widespread use of GIS in government is the mapping of national problems. For instance, the United States Geological Survey (USGS) often uses a set of earthquake data to assess the risk of major earthquakes in specified regions. This helps it to develop strategies to mitigate damage before the earthquake occurs.
  • ESRI’s product manager Dr. Jill Saligoe-Simmel points out that interoperable and unencumbered data allows for the effective and efficient running of government programs, thereby saving money and lives.
  • The ability of ArcGIS to bring awareness to multifaceted issues that might otherwise be difficult to understand without visualization is another of its many selling points. For example, in 2018, a study by the Appalachian Regional Commission found that the inhabitants of the Appalachian region were less healthy compared to other Americans. To help people truly appreciate the impact of the finding, the Commission used interactive maps that allowed users to filter data based on a range of spatial and health information variables such as poverty, morbidity rates, education, etc.

Civic engagement

  • Government agencies have also used ArcGIS Hub online to streamline their open data to enhance citizen engagement with data, events, apps, and productive collaboration focused on specific civic initiatives. For example, since 2014, the United States Department of Agriculture (USDA) has used the ArcGIS Online platform to deliver cloud-based geospatial services. This is attributed to ArcGIS being a secure platform. ESRI assured USDA that its applications and data are protected and after a rigorous assessment of ArcGIS by USDA, ArcGIS was granted low Authority to Operate (OTA) permission.

Marketing strategy

  • The examples mentioned above detailing how ESRI’s products are used by different government agencies perhaps highlight the marketing strategy employed by the organization to get and maintain government business.
  • For starters, ESRI markets ArcGIS as a highly secure platform where government data and applications are protected. This is a critical feature for organizations that work with government agencies. In addition, the U.S. has various sector-specific legislation to safeguard how third-party entities handle public information.
  • Further, ESRI markets its GIS products as scalable and flexible. From mapping to spatial analysis to real-time visualization and analytics, there is no doubt that ESRI has developed a platform that can help government agencies undertake a wide variety of tasks.
  • Finally, ESRI has packaged ArcGIS as a future-looking platform that will continue to facilitate government activities. Some current trends offer clues to how government agencies will use ArcGIS going forward. First, through geotagged mobile and social data, government agencies can send safety alerts directly to users based on their locations. Second, as machine learning becomes an integral component of GIS applications, government agencies can now develop spatial models to predict events accurately. Third, the evolution of remote sensing and imaging enables better monitoring of public infrastructure. This allows government agencies to identify infrastructure that needs repair, thus facilitating better resource allocation. Finally, with the growth of internet connectivity, road signs and utilities will join the IoT family. This will enable disaster response teams to harvest accurate real-time data and better tailor their responses to natural events like power outages.
  • As these trends evolve, the importance of open data and data sharing practices at all government levels will grow. In addition, the demand for more spatial information and real-time GIS data will necessitate automated sharing and the development of platforms that multiple agencies can access. This will make ESRI even more relevant.

Research strategy

The dearth in ESRI’s marketing strategy information called for a logical pivoting where the research team identified ArcGIS’s main strengths and interpreted these as selling points. These have been supported by several examples of how government agencies exploit the stated ArcGIS strong points to undertake critical functions.

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