Who owns the road? The IoT-connected car of today—and tomorrow

The Internet of Things in automotive

The connected vehicle has been the most visible and familiar example of Internet of Things technology. But as cars become increasingly software-driven, the real IoT developments in the auto industry are behind the scenes, as automakers and software providers both lay claim to the driver’s seat.

Our cars have been connected for years, in ways that by now seem routine: They seamlessly link to our smartphones, register real-time traffic alerts, stream our Spotify playlists, and offer emergency roadside assistance at the touch of a button. Indeed, automakers began linking vehicles to information streams back in the early days of the Internet. When it comes to connecting drivers and technology, the auto industry has a longer and richer track record than any other sector.

Who’s gonna drive you home?

The Internet of Things enables transformational change, and there is no question that the automotive sector is changing extremely rapidly. IoT-related technologies will draw the map for the industry to follow, and the connected car will play a major role on the roads and in the economy of the future. The power struggle between automakers and software developers is a symptom of the ongoing transformation, like birth pangs as the industry reinvents itself.

We are moving from an age of products to an age of services and experiences, from hardware to software, from functionality to information as the key object of value creation, and from industry silos to intricately connected ecosystems and value loops. It is no surprise that carmakers find themselves navigating new terrain within an ever-expanding ecosystem of players, all of which are trying to capture value, and where players that control the aggregation and analysis of this information—the software providers—steadily gain ground. As automakers consider their place in this changing industry, they can consider several approaches to strengthening their position:

·         Align on a vision of the role that the business will play in the ecosystem, understanding and accepting the transformational impacts this may have on the business and on the “old ways of thinking.”

·         Develop a clear mapping of where data originates—and, consequently, who owns it—for each of the services delivered, to better understand where value can be captured.

·         Develop a roadmap for shifting to a more service-oriented approach as an entire organization, not just in the connected vehicle divisions, to enable ongoing interaction with customers throughout the entire lifecycle.

·         Accept new capabilities that need to either be built internally or acquired externally. Seek greater involvement in—and ownership of—in-vehicle software platform development.

·         Consider ways to address manufacturing/ lifecycle challenges by working closely with technology providers to more closely integrate development processes and software driven feature rollouts and updates.

·         Identify and build strategic partnerships with key players across the ecosystem, including with emerging smart-device manufacturers, and work across the value chain to build a broader, more holistic brand experience enabled through connected technologies.

The road ahead for the industry is open and lined with opportunity. It’s time to shift into high gear.

The Internet of Things in automotive
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