Next challenge for location industry: mapping the great indoors

We can already navigate the outside world using our cell phones or GPS devices to a high degree of accuracy, but what about indoor locations? Mapping the giant, labyrinthine shopping malls, airports and convention centers of the world is a daunting task, but something that presents a huge business opportunity for that very reason.

Accessing the indoors has its problems. First of all, there is no universal data source for indoor maps. With the outdoors, there are GPS satellites to rely on, and companies who have done your work for you (which is what Nokia figured when it bought Navteq.) Secondly, indoor maps tend to be quite dynamic. Think of a trade show floor, which only ever has a temporary layout with all the booths that come in and go out from one expo to another. All this makes indoor mapping very labor-intensive.

But the demand is there. Companies like Yelp and Geodelic, which provide reviews of restaurants and bars, or Milo, which points to the best deals, could do with more precise directions. Right now, the information can point consumers to the entrance of a shopping mall but won’t tell them how to find, say, the the specialty cosmetics store inside it.

Some companies are trying to provide maps of the indoors — Mall Maps, FastMall and Point Inside are all doing this in various ways (e.g. working from blueprints or measuring locations themselves). But these approaches are difficult to scale. How do you produce these maps not by the hundreds, but by the thousands (the United States alone likely has over 40,000 “places of interest”) quickly and cost-effectively, and then maintain them?

Micello, a company based in Sunnyvale, Calif., claims to be doing just that. (Micello was a DEMO fall 2009 company.) It says it can provide a map of an indoor space quickly (the Stanford Shopping Center in Palo Alto with its 1.4 million square feet and 140 retail stores took just four hours to complete) and scale the production to meet demand. According to founder and CEO Ankit Agarwal (pictured), producing a map with is “almost an assembly line operation, with 10 steps anyone can do.”

And the assembly line seems to be a fitting metaphor, as Agarwal refers to his 10-employee operation in Chennai, India as the “factory” that churns out the maps. At the time of our interview, Micello had over 500 live maps, with another 400 waiting to be published. A sample map of an IKEA store is pictured above.

Micello starts with a map the proprietor provides (public places usually have public maps, but they are not standardized, nor necessarily drawn to scale, which means they need lots of work) and builds its own from that. The end result is a map that can be superimposed on Google Maps. When users zoom in on the location, they get a map of the indoors showing where the individual stores are situated within the mall.

“We want to own the indoor maps, and we believe we can do it,” says Agarwal. As a “family and friends funded” company, with a total of 17 employees, Micello sure has its work cut out for it. But isn’t Agarwal worried that giants like Google and Microsoft will soon claim this market?

“The way we see it, Google and Microsoft are not content providers, they acquire things. Google Earth was an acquisition, and so was StreetView. A lot of the other providers’ data comes from Navteq and such places.”

This is not to say that Google and Microsoft are sitting idly by. Google has started a worldwide project (25 pilot locations in the U.S., 6 in Australia, 2 in Japan) to photograph business interiors to give customers more information when choosing from local businesses. Google is getting a “lot of interest” from business owners and consumers, and is working hard to develop useful tools for local businesses, according to a company spokeswoman. In other words, putting more information out there for the pundits, including photos of store interiors and products.

And Microsoft, which has demoed some very impressive stuff with PhotoSynth, the software that recreates exteriors and interiors from photographs (pictured below is a reconstruction of the Christmas indoor market in Zürich, Switzerland), is looking into giving users an immersive experience when visiting a location online. Indoor mapping is “absolutely crucial”, according to David Gedye, a Group Program Manager at Bing Maps and PhotoSynth.

“Vector maps [basic maps that show locations in a grid style] are a low-tech solution, and a number of small companies are trying to harvest those and make them available in an integrated way. This is a fine approach, but providing an immersive experience is a bigger challenge. Really, as commerce has taken to the Internet, the reason for physically visiting a place is to have an experience you can’t have online. Immersive representations of interiors can provide strong visual and emotional cues for customers,” says Gedye.

Another company in this space is Zerista. It is providing indoor maps for visitors to places like convention centers, but building ad-hoc social networks on top of those, so the map is only part of the service’s underlying infrastructure. Zerista, too, acknowledges a need and an opportunity for a middle-man company able to provide aggregated indoor maps and distribute them for other developers. If there was a place to get these maps in a uniform and consolidated way, we would absolutely take advantage of it and build value on top of that,” says Zerista president John Kanarowski.

[This story is part of a weekly series on location-based services, written by VentureBeat’s JP Manninen. If you have an idea for a story you would like to see in this series, drop a line at jp@venturebeat.com]

Don’t miss MobileBeat 2010, VentureBeat’s conference on the future of mobile. The theme: “The year of the superphone and who will profit.” Now expanded to two days, MobileBeat 2010 will take place on July 12-13 at The Palace Hotel in San Francisco. Early-bird pricing is available until May 15. For complete conference details, or to apply for the MobileBeat Startup Competition, click here.