Uber hasn’t become a massive hit because all of a sudden consumers decided they’d like a more convenient form of personal transportation. Or because Uber was smart enough to tap into this consumer desire.
It’s because technology has emerged that freed Uber from having to be an expert on absolutely everything in its app.
Mapping services, location services, optimization services (to pick the closest driver), payment services, and rating and feedback services are among the behind-the-scenes technologies that Uber has harnessed. The company didn’t have to invent them — instead, it just accesses them through the cloud.
“The whole [Uber] app would be impossible without the cloud,” said Michael Skok, a general partner at North Bridge Venture Partners, who spoke with me recently about his firm’s fourth annual Future of Cloud Computing survey.
Specifically, APIs (application programming interfaces) are the underlying technology used by developers to enable services such as mapping and payments over the cloud. APIs let apps communicate with other software — requesting data and providing a standard way for that data to be delivered.
What APIs do for tech startups is let them focus on what they’re really good at (their “core competency,” in entrepreneur-speak). Because of APIs, Uber can focus on getting drivers and users, finding the right pricing model, and expanding to new cities.
While much innovation has happened already thanks to the meteoric rise of APIs, a “second cloud front” based on them is now coming, Skok said. Uber and Lyft have disrupted the transportation industry because of APIs; other industries can expect apps relying heavily on APIs to do the same to them, he said.
“The first wave was transitioning. The second is transforming,” Skok said.
To some degree, this next wave is likely to involve the “Internet of Things,” which is all about connecting physical objects through APIs.
For instance, a developer who wants to create an app pulling in data from a home security system would have to become an expert on the inner workings of the security system. Now, there’s a good chance that there’s an API for that, which would allow the developer to just focus on creating a useful experience for users in the app. (The trend has spawned startups solely focused on creating new APIs for connecting to physical objects, such as Boston’s MachineShop).
Ultimately, “we’re really very early — still in the phase of discovery, still discovering new things to create,” Skok said. “But the most important thing is to step back from this and realize that while cloud has already come through a massive growth, it’s still a fraction of what’s about to come in the second cloud front.”