Enterprise Communications


The Connected Car: Driving New Opportunities for ICT Suppliers

by Andrew Milroy 06 Jun 2013
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The nexus of cloud computing, high speed mobile networks, big data and ‘The Internet of Things’ is creating huge opportunities to transform entire industries. From the healthcare industry to the automotive industry, we are on the brink of a surge in innovation, driven by ICT advances.

Organizations no longer view ICT as a way of increasing productivity and improving existing business processes. Instead, ICT is increasingly perceived as a platform for rapid innovation and the key to successful competitive differentiation and growth.

Over the next few years, some industries will become unrecognizable as cloud, mobile, big data and the ‘Internet of Things’ transform them entirely. So what does all this mean and what are the implications for the IT industry? To answer this question, each industry needs to be analyzed separately.

One industry that is currently receiving a lot of attention from technology vendors is the automotive industry. Today’s cars are turning into computers on wheels. Already, autonomous or driverless cars can now be used. But what is the appeal of such an innovation? The answer is that driverless cars can minimize accidents, reduce congestion and reduce vehicle carbon emissions, while enhancing the overall customer experience for most people.

We can expect to witness a very rapid evolution of the cars that we drive today into autonomous cars. Over the next few years, we will increasingly drive connected cars that have the following IT-enabled features:

Information and entertainment to the dashboard. Streamed audio and video entertainment, games and access to communications applications will become common in new models. Additionally, information relating to traffic, parking and weather will be fed directly to vehicle dashboards.

Navigation and driver assistance. Cars will be able to select the best routes in real time, taking into account current conditions as well as assisting drivers as they perform maneuvers For example, cars will increasingly have the ability to park themselves.

Safety. Connected cars will have the ability restrict speeding, keep a safe distance from other vehicles, predict potential accidents and take avoidance measures, prevent red light jumping and other motoring violations. New cars in Europe will have the capability to instantly notify the emergency services of accidents, and roadside assistance of breakdowns.

Security. Once a vehicle theft has been recorded, connected cars will be easy to recover through real time GPS tracking.

Energy efficiency. Intelligent navigation, routing and monitoring of driving style, fuel consumption, emissions and ‘wear and tear’ can be managed effectively.

Usage based insurance. Polices can become usage based and linked to the distance driven by individuals and where and how those individuals drive.

Technology firms are currently investing heavily in connected cars. One of the key reasons is a desire to control automotive IT platforms. Whoever controls driverless car platforms will be in a very strong position. They will be able to establish a communications system for driverless cars. Roads will carry more traffic and be safer and personalized transport will become typical. It will be an enjoyable experience. Cars will deliver you to your home or workplace and park themselves. Onboard, you will be able to work or access entertainment. Accidents will be virtually eliminated and cars will consume substantially less energy. Ultimately, insurance rates will fall dramatically and some mass transit systems may gradually be replaced by personalized transportation run from a common network. It is the IT industry that will enable this transformation and reap huge rewards in the new automotive paradigm.

Translated into IT terminology, this creates massive opportunities for providers of high speed networks, cloud computing vendors and analytics software vendors.

According to LMC Automotive, global automotive sales exceeded 80 million in 2012 and will grow to 83 million in 2013. In the next few years, this will represent 100 million complex computing devices that can connect to the cloud over mobile networks. Vehicles will contain networking hardware, infrastructure software, software applications, and analytics software. This is a multibillion dollar opportunity for existing IT companies. It also offers opportunities for innovation which will drive the emergence of new technology firms.

Microsoft and Google are working closely with major manufacturers to offer connected car platforms. Microsoft is working with Toyota to use Azure as a cloud based mobility platform. Google Is working with Ford to offer a cloud-based platform that offers a variety of features including suggestions of optimized driving routes.

IT vendors are benefitting from a shift away from proprietary systems to modular cloud based offerings typically provided by IT vendors such as Google, Saleforce.com. Microsoft, IBM and Amazon. These offerings massively reduce development time and costs for automotive manufacturers. Perhaps even more importantly, they can also be integrated to the broader automotive ecosystem. This would be very challenging or impossible if proprietary systems developed by automotive firms are used.

In summary, the automotive industry is rapidly incorporating additional automation into vehicles. As IT firms get more heavily involved, this process will accelerate. In our old age, we may well look back with amazement at the fact that individuals were given so much control of cars. We may ask why we tolerated such high accident rates, such high levels of congestion, and rampant pollution generated by cars.

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