Monetizing connected car data: Preparing for the next billion-dollar industry
There’s a lot of talk around how companies can capitalize on driver data now that cars are becoming much more sophisticated. According to McKinsey & Company, monetizing data from connected cars will be worth up to $750 billion by 2030. It’s clear that the monetization of this data is opening up a whole new revenue stream across industries, from car manufacturers to GPS, and smartphone providers to media and service providers and beyond.
As more cars are built with preinstalled Wi-Fi mobile hot spots and other internet-connected devices that generate and consume data, automakers have the ability to harvest and monetize the information for actionable insights that increase revenue and customer satisfaction, as well as improve product quality. To support this shift, the gradually increasing number of microcontrollers in cars has evolved to include more internal compute resources and the ability to support multiple applications and interactions. Moving from tasks such as monitoring emissions, tire pressure, combustion efficiency and a host of other core functional tasks, these microcontrollers have now evolved to processors, local memory for in-dash GPS systems and other functions — differentiating the “experience” for the driver.
However, to accurately monetize connected car data, it’s important to realize that it’s not about the car itself. It’s about how much time people spend in their cars, what they’re doing in this time and how to unify the data to make it more useful for the end user.
Connecting into the driver experience
Previous studies from the U.S. Census Bureau found that around 85% of the roughly 150 million workers in the United States use a car to commute to work. I’m one of those commuters myself, often traveling from where I live in Folsom, Calif. to my office in Palo Alto. If the trip happens during rush hour, that turns into rush half-day; if I make it a round trip in a single day, that’s upwards of 6-plus hours in the car. On days I make this commute, I’m awake in my car for more hours than I spend at home asleep. I can’t read anything, I can’t type email, yet I’m trying to make the most of the hours.
To help me and my fellow automobile commuters maximize the time spent driving, the vehicle needs the ability to use information about our previous driving history — data which is coming from several apps that often have nothing to do with each other or the car itself. The information needs to come in real time to be useful, so think of it this way: the car needs to be able to connect into various things such as the calendar app on our smartphones. Not only to remind us of calls we have coming up, but also to dial us in when we’re having to make calls while on the road. Voice prompting with various options would be great, even this would be personalized — “your call is over, would you like to return to ‘Learning Italian, Lesson 3’ or play your favorite talk show? Based on your preferences, you have downloaded to local car memory: Rachel Maddow on MSNBC, Sean Hannity on Fox News, Don Lemon on CNN.”
Connected cars can access this data to go even further, tapping into our historical searches to share interesting news from daily papers, or suggesting calming music from iTunes if data from our fitness trackers show an increased heart rate in parallel with the GPS system signaling stop-and-go traffic for the last hour (I think my heart rate is going up while I write this). This sort of data, including heart rate coupled with your age, preferences for news shows and any number of other details, may be considered open source for some and highly private for others.
Unifying data across the car and the cloud
For this to be successful and for the auto industry to truly begin monetizing connected car data, these actions and governance of them by the end user need to happen at a gateway within the car — one that’s configurable both in the car and the cloud, as well as controlled exclusively by the driver. It has to have enough intelligence to learn over time and be prescriptive in nature. There also needs to be data unification across several IoT systems to bring all the disparate pieces of historical driver data together for actionable insights.
The best way to solve for this from a technical standpoint is to place analytics and associated data management — data integration, data fusion, data governance and so forth — in the car within a gateway device. This device would take in downstream information from all the car systems and upstream information from all the cloud-based services, weaving it together based on the preferences and directions of the driver. Core to this capability would be the need for local, sizable (at least in the 100s of GB range) persistent memory to support historical data from across the cloud and devices brought in and out of the car, as well as the car itself.
A key way to do this effectively is to have an enterprise-ready database system that works across gateways and edge devices. Furthermore, this memory would need to be managed in a way that preserves the security of the data, meaning encryption and decryption on an element-by-element and transaction-by-transaction basis, and the ability to share that data for analytics on each application or device within the car, such as Apple Play, the GPS system, the car manufacturer’s service and support systems and so forth. There will be opportunities to brand this application and service gateway by the car manufacturers and bring along media providers, similar to what you see when you buy a UHD TV from Sony or Samsung. The difference here is the opportunity to be more like Xfinity in terms of control and branding, and therefore show differentiation and ability to monetize the platform.
Driving innovation and experience forward
As IoT technology and connected data continue to increase, connected cars have become a very real reality for the auto industry. It’s no longer a discussion of localized analytics and data management versus the cloud, but instead is a discussion of how we help these pieces work together for a personalized driver experience every time we get behind the wheel. To do this effectively, car companies need to negotiate rights to use or interact with more of the data sources the information is pulled from. At the end of the day, monetizing the data we’re bringing in from connected devices is all about meeting the overarching desires of the driver in real time. This will be what leads connected car innovation forward at the speed limit as opposed to stop and go.
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