Forget the Credit Crunch; it’s the Geo Crunch in London

It was a particularly cruel piece of coincidental timing; quite a few of the usual suspects of the London geo scene congregated in Harrogate earlier this week for the one day Where 2.0 Now? conference. I was there representing Yahoo! Geo Technologies as well as Chris Osborne from Ito World, Ed Parsons from Google, John Fagan from MultiMap/Bing Maps, Harry Wood from Cloudmade, John McKerrell from mapme.at, Steven Feldman from  knowwhere and a host of others.

At the same time, back in London, the Credit Crunch was biting hard with the news that Cloudmade were to close their London office. While not officially announced by Cloudmade, both Russ Nelson and Richard Fairhurst reported this on Twitter and several other sources have corroborated this.
As if this wasn’t enough, news also filtered out that Microsoft acquired MultiMap was also shedding staff, with Chris Darby and Burak Gürsoy providing the unofficial news on Twitter and again, several others have corroborated this.
Bleak times for the geo scene in London; an observation that Steven Feldman, chair of this year’s AGI GeoCommunity conference noted wryly, whilst in Harrogate.
It’s an oft touted aphorism that a recession is the best time to found a startup; there’s certainly a cadre of very talented, passionate engineers in and around London. Here’s hoping that this is not the end of the story but the beginning of one or more geo startups that were founded in the depths of the Credit Crunch.

Posted via email from Gary’s Posterous

Another Piece Of Bloggage By Gary

Self professed "geek with a life", geo-blogger, geo-talker and geo-tweeter, Gary works in London and Berlin as Director of the Places Registry for Nokia; he's a co-founder of WhereCamp EU, the chair of w3gconf and sits on the W3C POI Working Group and the UK Location User Group. A contributor to the Mapstraction mapping API, Gary speaks and presents at a wide range of conferences and events including Where 2.0, State of the Map, AGI GeoCommunity, Geo-Loco, Social-Loco, GeoMob, the BCS GeoSpatial SG and LocBiz. Writing as regularly as possible on location, place, maps and other facets of geography, Gary blogs at www.vicchi.org and tweets as @vicchi.

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9 Responses to Forget the Credit Crunch; it’s the Geo Crunch in London

  1. Maitri says:

    Where are the bulk of Cloudmade’s head technical guys? It would be a shame if they were to leave and a great product suffered because of it.

  2. Gary says:

    My understanding is that all Engineering functions will centre around the Kiev office, with the Menlo Park office remaining for sales and V/C interaction.

    Of course, there’s been no official announcement on this yet so there’s a certain amount of assumption and surmise in trying to discern precisely what’s going on.

    However I think that the closure of the London office won’t affect the product, at least not directly. Despite their announcement of their pricing policy recently I still don’t see a viable business and monetization model for Cloudmade and that’s the greatest shame of all of this.

  3. @Maitri:

    (As a soon to be ex CloudMade employee) The product development and operations is not affected, as it is based in the Ukraine office, which is staying open.
    I am getting somewhere with the job hunt, which is good.

  4. Observer says:

    The main effect of this will be to disassociate CM from the technical direction of OSM, perhaps from its overall direction also.

    Steve and Nick are heavily involved in the governance of OSM (Foundation, SOTM) but less so in the technical aspects. Most of the improvements to the core OSM site in the last year have come either from CM’s London office or from Tom Hughes.

    Though OSM is an international project, most of the development happens around London — I can’t see Kiev replacing this. And OSM is a very technocratic community. Devs are respected. Suits aren’t.

    CM’s London office has also made Herculean efforts on data quality. Any improvements to the terrible TIGER data is largely down to these four guys. Giving this up is, brave, shall we say, bearing in mind the embryonic state of the OSM US community and the strides Google is making with its own US map.

    It is indeed a recession and there was probably no immediate ROI on the London office. This makes short-term sense for CM’s balance sheet. But it slows the progress of OSM and long-term that is bad for CM.

    I wonder at the VC exit strategy, too. Like you I think monetization is a long way off so my initial guess would have been – get bought by someone. Yahoo maybe. :) But the data is open, so CM only had two assets: the proprietary code for their webservices, which is not that remarkable, and their expertise, which was. Now they have lost much of that.

  5. Money from geo has two sources: routing and local search.

    I’m thinking it was too time consuming and costly to get routing working well, especially in the States. After the Google Navigation a-bomb perhaps it didn’t seem to make much sense. They seem to be concentrating on the data store and sponsored POIs as the way to monetise CloudMade.

  6. Maitri says:

    “Though OSM is an international project, most of the development happens around London — I can’t see Kiev replacing this. And OSM is a very technocratic community. Devs are respected. Suits aren’t.”

    This is what I was getting at. Not the demise of a product and its development as such, but of the creative, technical guidance of projects and services like OSM.

  7. Gary says:

    It’s also intriguing that the comments to my post show that people still can’t quite see the lines of demarcation between OpenStreetMap and CloudMade. The more that distinction can’t be easily perceived the more challenging it becomes for CloudMade to position itself.

    By way of comparison, no one confuses Red Hat and the Linux community.

  8. @Chris: in theory, I guess, the third source is “selling data” (and convenient access to data). Not everyone can build their own like Google. But how you sell openly-licensed data, I have no idea.

    patch.com suggests that the big guys are willing to go straight to the source. The little guys will buy from a third party, and in some niches that’ll work well (iPhone, most obviously). But though selling services to little guys will sustain a small company like Geofabrik, the margins and scale are probably too low for CloudMade.

    CloudMade’s imminent Data Marketplace is an interesting answer: rather than selling the OSM data, sell data that works with it.

  9. geo says:

    Putting maps on webpages, providing routing directions are both shaky business models when competing against Google, MS, and Yahoo who currently have access to more accurate and complete maps.

    Richard is right in that the Data Marketplace is the key as in my eyes the map in openstreetmap is misleading, it’s so much more than that. It is a huge geodata storage facility with a map front end.

    Cloudmade can make their money by being the front end search engine to find and structure this messy and inconsistent data. I remember someone asking how do I find coordinates for all the train stations in Germany…well cloudmade will hopefully spit back at him the answer in whatever format he desires.

    Openstreetmap is growing at a rate where a high percentage of fixed ‘things’ have been given coordinates and tagged, it just needs a Cloudmade to organise these into coherent spatial datasets.