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March 28, 2017
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Data Is Driving New Automotive Business Models

The automotive industry is going through profound change driven by a myriad of new data sources and the new business models that they enable. Just last week, it was reported that Intel paid $15B for Mobileye, a technology company that allows autonomous vehicles to “see” through cameras and other sensors. Mobileye also allows crowdsourcing data for high-definition maps like the ones used by connected and autonomous vehicles. This would be a significant investment by anyone, but when chip makers are buying into the notoriously conservative automotive market, there’s clearly a significant shift underway. That shift, as it turns out, is the ability to collect, analyze and create new business models around data and mobility. Those capabilities will change the way the world moves.

Data Driving New Models

These models represent the future for automotive companies as they move from producing vehicles to becoming mobility companies, with the key business ingredient being enormous amounts of data.

Ford reported at the 2016 Hadoop Summit that with their connected vehicle data platform, a single vehicle can generate a whopping 25GB of data in one hour—while on the move. That’s 25GB of sensor readings, messages, diagnostics, and performance warnings. The data moves in both directions through multiple means that also must be managed for connectivity and performance.

This data will grow larger as Ford works to address the four megatrends (video) that drive smart mobility:

  • Urbanization – Population in urban environments is outpacing the infrastructure for vehicles. Something has to give as cities become more dense and the services offered in the centers of major cities rises quickly.
  • Global middle class growth – This is especially true in Asia. The world’s middle class is expected to explode from 2 billion to 4 billion in the coming years. Part of the middle class dream has been to own a car. This won’t change soon.
  • Air quality issues – Especially in urban areas. The impact of more combustion engines in more dense areas will create crisis if the problems aren’t resolved now.
  • Changing consumer attitudes – Millennials don’t feel the need to invest in a vehicle the way their parents did. They’re more likely to use ride share vehicles, public transportation, and are more likely to respond to an appeal to sustainable, low-carbon living.

In the same presentation, Ford presented their connected vehicle blueprint, which includes:

  • Vehicles that talk to one another and the infrastructure
  • Vehicle sharing
  • Avoiding gridlock and finding parking spaces
  • Solving for the last mile of commute, which could even include finding a bicycle
  • Charging vehicle batteries when energy prices are lowest
  • Custom leasing based on usage rather than time

Every automotive company is seeing the future through the same big data lens. Vehicles aren’t simply a “thing” to be purchased, but are instead becoming a way to solve the challenges of life in or outside of the city. Automotive manufacturers are becoming mobility companies and are quickly building out the services that surround the way the world moves. Those services stand to be a greater factor in their success than anything coming off the assembly line.

Automotive And Open Source

Automobile manufacturers can’t sit still while competitors take advantage of the megatrends. They’re building on the rapidly evolving open source architectures to support what they see happening. That environment has been key to how they’ve scaled their efforts and how they’ve responded to systemic changes that come with so much technological advancement, like new laws about data and where it can be stored, how it can be moved and how it must be protected. There are significant concerns about cyber security, of course, and many other country-specific regulations. This pace of change and complexity is a sign of the times and drives their software choices.

Open source is a perfect match for a challenge of this size and complexity. These new models aren’t well-suited to enterprise software’s traditional “waterfall” pace of change, nor to the risk of vendor lock-in that comes with proprietary code. Mobility organizations are free to use leading edge technology that scales indefinitely.

This freedom is critical as IoT becomes a driving force and the world figures out that data can’t always move synchronously to a central location to be processed and put to use. Instead, data is moved based on local analytics and criticality with the most important data acted upon more quickly. Cost can also be a factor in determining communication but only when enough data can be analyzed quickly enough to decide. The latest open source projects, like Apache NiFi, can be brought into the technology stack to match that specific need without significant contracts or risk.

Learn More About How Hortonworks is Accelerating Automotive Transformation


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