The acquisition reveals several truisms about the state of our industry. I want to highlight them here because we as insiders may not see the business forest due to the technology trees.
A few years ago Tom Foremski and others began arguing, quite correctly, that all companies are media companies. It’s equally true that today all companies are technology companies.
If there was a scale that measured how much a business’ success depended on technology, I’d estimate that UPS (a package delivery company founded in 1907), Amazon (founded 1994), and Uber (founded 2009) come in at roughly 90%. Jack Levis of UPS memorably stated that the company evolved over time from a trucking company that used technology to a technology company that just happens to use trucks. Amazon and Uber, in contrast were born as technology concerns. My local coffee shop and hair salon are perhaps tapping just 10% technology, but that percentage is growing. Both chains have recently stepped up their marketing use of tech and are gathering personal details to raise sales.TechCrunch hosted the most cited article I found on the acquisition: “Uber is Buying Map Tech Startup deCarta In An Undisclosed Deal.” Several tech watchers inside our industry questioning the use of “startup” to describe 19 year old, 40 employee deCarta. I certainly don’t consider the company that was part of the original Google Maps implementation a startup!
I think TechCrunch stated what most people outside of our industry believe: any organization that’s not the Ordnance Survey, National Geographic or Rand McNally is a mapping startup. Why? Mapping companies like TomTom, Nokia, Esri and Google didn’t hit many people’s radar until a few years ago, despite their decades of mapping and technology advancement. For better or worse, mapping, especially with computers let alone drones, is considered something new.
Algorithm Secret Sauce Matters, Data Less So
Former deCarta employee, now merger and acquisition advisor, Marc Prioleau wrote on the acquisition at his blog. He makes the point that what Uber acquired were the unique deCarta algorithms, what might be though of as the secret sauce of geocoding and routing. Those bits of code are what will distinguish Uber from any other provider building on Google Maps or Esri’s APIs or any other mass market solution available. Over on his blog Mike Dobson asks a key question: if these algorithms are so valuable, why didn't mapping providers (like former users Yahoo or Google) buy deCarta before 2015? Neither Dobson nor I have an answer.
The flip side of Prioleau’s point, and this one is mine, is that Uber did not buy a geographic data company. In fact, no one is buying data companies these days. Despite some arguments in recent years that it might be a wise move (Apple should buy TomTom, Apple should buy HERE) AND and the data parts of TomTom and Nokia remain where they’ve been for some time. In contrast, data collection hardware companies that offer planes, drones, satellites, and sensors are in flux: Google acquired Titan and Nest; Trimble acquired Gatewing, Microsoft acquired Vexcel, and earlier this month Chantilly, Virginia-based defense and intelligence contractor OGSystems acquired Urban Robotics, a developer of camera systems and software for drones.
Form Relationships, but Plan for a Backup
The fact that every company is a technology company is making for some complex relationships in the marketplace. Uber, it’s reported, uses both Google’s and Apple’s mapping technology at this time. Google is an investor in Uber. But word on the street is there is friction in the relationship. Uber, therefore is wise to consider building its own mapping technology infrastructure, just in case the Google and/or Apple relationships end.
Uber can, and perhaps did, learn from Apple. The company had a collection of mapping companies on board when Google and Apple went their separate ways, something many suggest was years in the making. Those in and outside the industry are learning a partner’s decisions can throw a wrench in a relationship; having a “hot spare” solution that can be pressed into service is becoming a necessity. Just look at all the companies falling all over themselves to help users move from Google Maps Engine and Google Earth Enterprise.
One of the challenges of working in a small, tight-knit industry is that our observations are often tied into the technology details rather than the larger business perspectives. When well-known companies launch geospatial technology products or make acquisitions like this one, we have a chance to see how our all-to-familiar industry looks from the outside.