Location Based Search & Services- Impact on Traditional GIS Industry

Traditional GIS software have ruled the roost on desktop plaforms for over two decades with a firm foothold on public and private sectors. Major Players like ESRI, MapInfo, Intergraph etc have created a niche for themselves in their respective vertical market segments in the GIS industry.
During the late 90's two significant events challenged the established norms of GIS industry. It was during this era, that the GIS industry also woke up to a whole new challenge to reorganize their business models to cater to the interoperability demands of the homeland security initiative. The use of GIS terminology itself was under attack with critics claiming either "Geospatial" or "Geoscience" to be more appropriate to encompass the set of related sciences of the likes of GPS, Remote Sensing etc.
The first event saw the advent of the Location Based Services(LBS) in the burgeoning mobile market leading to the explosion of development services targeting this platform. The other and in more ways more significant event was the extension of internet search engine into the geographic space. The introduction of Google Earth added a new dimension to search services now based on geographic location. Other competitors like Microsoft, Yahoo followed suit with their data rich clients on the web.
Traditional GIS industry responded well by announcing new business intiatives to meet the LBS challenge. MapInfo took the lead by reorienting their business solutions towards Location Intelligence and ESRI and Integraph did not fall behind by way of their market introduction of web based geospatial services built on Service Oriented Architecture(SOA). Finally GIS consumers saw the light of decoupled geospatial services which have been in demand for quite some time. However, the initiative lacked a cohesive approach to the target demand for integrated GPS, GIS and telematics services. The demand though, saw the birth of many smaller players with their integrated suite in offering but they however, lacked penetration to make inroads outside their regional markets.
However, it is the search space that I personally feel that the GIS industry might have missed the boat completely. Major players of the GIS Industry have been dragging their feet over adoption of interoperability standards eventhough the demand for it had precipitated ever since the inception of homeland security initiative. As a consequence, even with the existent infrastructure from data clearing houses managed both by public and private sectors, the initiative could not take off beyond their academic research appeal. But with the birth of online mapping services, consumers were able to finally put to rest their concerns about the data format and currency without the need to either collect or process data.
In summary, the economic fallout of this missed opportunities is minimal with GIS players well positioned in their strongfold AM/FM/BI segments of the market. However, the GIS industry have lost a golden opportunity to appeal to a wider audience outside their safe-net GIS users.