“The automotive industry reminds me of the telecom industry ten years ago.” Hearing that statement gave me faith that I was not hopelessly out of my depth at the recently concluded TU Automotive show in Detroit. Then, when I heard one of the so-called futurists on a panel tell the audience that auto manufacturers needed to start thinking like telcos my ears really perked up.
Turns out that after two full days of presentations and meetings at last week, this ICT analyst was more in my element than I expected to be. Although I think that utilities of today are much more like telecoms companies of ten years ago than auto manufacturers are, and I can’t really see how or why I would advise Ford to fashion its go-to-market like AT&T’s (the products are simply too different), there are several meaningful intersections between automotive and ICT.
From drive-train security systems to the future of autonomous driving, TU Automotive ran the gamut from the supremely mundane to pretty far out there. And while the show had plenty of “old school” automotive technology on display, there were more direct connections to the ICT world than I expected to see.
The Business You’re in Today isn’t the One You’ll be in 10 Years from Now
Admittedly, that headline is neither new, nor original. At least five years ago on a stage in Barcelona, I heard the CEO of Ericsson say that the CEO of Volvo told him that Volvo needed to move out of “car” business and into the “transport” business. But when Raj Rao, CEO of Ford Smart Mobility gave a talk that centered on Ford’s efforts to drive transformation in mass transportation, something clicked in my mind. It became clear that this whole “as-a-Service” thing that could apply to the concept of providing transportation rather than simply inserting vehicles into the supply chain is the real deal. However, that is going to take a lot of time and a ton of business model trial and error.
With the concept of business model trial and error in mind, this leads into the three ways automotive can effectively take a page from ICT:
- “Fail fast” – One fundamental disruption that over-the-top service providers have brought into the telecom services market place is the idea that services don’t need to be designed to be offered forever. With the right network architecture, and partnership ecosystem, services should be able to be set up, brought to market, and, if need be, discarded quickly if they prove ineffective. Applying this to automotive can be tricky. Clearly, cars are designed to be dependable and long lasting, so the “fail fast” concept should be altogether foreign in this industry. However, the concept as applied to the connected services delivered to them – and the use cases that they are designed to serve – can adopt this mentality. Eventually, even transport-as-a-service models could be agile enough that if one use case fails, the capital equipment should be able to be redeployed without reinventing the proverbial wheel.
- Use of Prime Integrators – If there is one area where TU Automotive definitely sounded like a high tech show it was in the pervasive use of the word “ecosystem” (and, apparently, for good reason). Cloud providers, app platforms, app developers, several levels of cyber security providers, chipset makers, and AI software vendors were all well represented at the show. Here’s where the Ericssons and Accentures of the world have ambitions to help. These firms not only understand the technology, they understand how to weave a potentially disparate mélange of suppliers into an ecosystem of solution providers.
- Cars as “Consumer Electronics”: Selling The Upgrade Cycle – With full acknowledgement that cars are made to last longer than a mobile device, one area where automotive can learn from telecom is the idea that successive advances in technology should, to a reasonable extent, be able to make previous generations of goods better. Oddly, I’m not necessarily talking about nav screens and/or infotainment panels. The real value will come in being able to update the capabilities of the dozens of control systems within the car. Case in point: Tesla. Of course, Tesla had the advantage of a clean design slate. For most auto manufacturers, getting all of these systems to where they can all be updated over the air is going to take some heavy duty high tech industry techniques. Here, concepts such as agile design could have a role to play in helping to get, and keep, control systems on the same page. Here, also, is where the cloud, and the cooperation between a number of cyber security players will be important.