The State of Geospatial - Revealed as Uber Bags deCarta

Just how old do you have to be to remain a startup? Adena Schutzberg reveals the “secret sauce” in the deal and asks, is anyone buying geographic data companies?

It’s been several months since a “big” acquisition in the geospatial industry. Uber, the well-known mobile app-based transportation company, acquired deCarta, a small independent mapping and spatial analysis software company.

The acquisition reveals several truisms about the state of our industry. I want to highlight them here because we as insiders sometimes cannot see the business forest due to the technology trees.

All Companies are Tech Companies

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 measures 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 recently stepped up their use of technology for marketing and customer retention and are gathering personal details to use to offer incentives.

Mapping Start-ups

TechCrunch hosted the most cited article I found on Uber’s March 2015 acquisition: “Uber is Buying Map Tech Startup deCarta In An Undisclosed Deal.” Several tech watchers inside our industry questioning the use of the term “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, is still considered something new.

Algorithm Secret Sauce Matters, Data Does Not

Marc Prioleau, a former deCarta employee, and current merger and acquisition advisor made the point in his coverage that what Uber acquired, the unique deCarta algorithms, are 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.

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 geographic data companies these days. Despite some arguments in recent years that it might be a wise move (in particular that Apple should buy TomTom or HERE) the data parts of TomTom and Nokia remain where they’ve been for some time. In contrast, data collection companies that offer planes, drones, satellites, and sensors are in flux: Google acquired Titan and Nest; Trimble acquired Gatewing, and Microsoft acquired Vexcel. Even smaller players, like Chantilly, Virginia based defence and intelligence contractor OGSystems acquired Urban Robotics, a developer of camera systems and software for drones, are getting into the act.

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 that there is friction in the relationship. It makes sense, then that Uber 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, a parting something many suggest was years in the making. Clearly, 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.

Perspective

One of the challenges of working in a small, tight-knit industry is that our observations can be tied to technology details rather than the larger business perspectives. When well-known companies launch geospatial technology products or make acquisitions in the field, we have a unique chance to see how our all to familiar industry looks from the outside.

This article was published in GIS Professional April 2015