The Drivers of Change in the Automotive Technologies

The Drivers of Change in the Automotive © — Mahbubul Alam

The power of the Software Defined Vehicle is on everyone’s mind. What is not obvious is how this revolution of technology will disrupt the automotive ecosystem and change the industry players involved. The Software Defined Vehicle has the power to transform our lives, but it will also change how cars are conceived, designed and built from automakers to tier-suppliers all the way to the bottom of the supply chain.

What is Disruptive Change?

Disruptive change refers to an innovation that creates a new market and value network that eventually disrupts an existing one, displacing established market leading companies, products and alliances.

It is something that we are often too busy with our jobs to see clearly. Sometimes we need to step back to take a look at our industry from a different perspective to anticipate where the future will take us. Examples of technology changes that have completely disrupted the world include how the printing press made inexpensive and widespread dissemination of ideas possible for the first time and how the telephone and, later, the internet enabled us to not just communicate, but cooperate regardless of geographical location. Each technology change opened up completely new avenues of business, technology and possibility, but, of course, also destroyed many existing businesses — monks with ink quills, the horse and buggy, secretarial pools and so on — all became irrelevant with the introduction of the new technology.

Key Disruptors of the Automotive Industry

The connected car is beginning to disrupt many aspects of the traditional dealer services model. With the ability to obtain diagnostics and data from the car, as well as the ability to reprogram it, non-mechanical dealer functions will gradually be phased out. We are starting to see some of that disruptive potential being maximized as we learn how to analyze and get insights into this vehicle data. The three key disruptors of the automotive industry — Cloud, Connectivity and Context — will set the pace of development of the Software Defined Vehicle in the upcoming years. Let us look at each of these in more detail.

1. Cloud: The democratization of IT infrastructure creates access to powerful data centers with numerous applications at low cost. In addition to a centralized model, we also need to have a more distributed data storage model enabling every house to be its own mini data center. When a vehicle is at home, it should be able to offload its data securely to the local hub. According to Intel a single autonomous car generates about 4 TB of data per hour and not all of it can be transferred to the cloud, thereby differential data will become important. The amount of differential data must be brought down to one-millionth of its current level. Multi-level filtering to judge the critical nature of data, the ability to differentiate that data and compress it as required will become an essential process for the Software Defined Vehicle.

2. Connectivity: The proliferation of phone, email, social media and internet connectivity from any place and at any time is also responsible for the emergence of Internet of Things (IoT), which is the next wave pressuring internet growth at a pace matching Moore’s Law and doubling the compute power, storage and networking every 18 months. The continued miniaturization of electronics, sensors and actuators are driving cost down and allowing the collection and analysis of all types of data. With the incorporation of General Data Protection Regulation (GDPR) and other data privacy laws, the collection and usage of data will be determined by the end-user that generated the data. The automotive industry also needs to adopt the next generation of automotive cybersecurity architectures based on blockchain technology and the software-defined perimeter to defend the Software Defined Vehicle against cyber-threats.

3. Context: What used to require fixed hardware and software can now be reprogrammed dynamically using hardware that is adaptable to road conditions, user context and the latest innovations — leading to a Software Defined World following in the footsteps of the successes of the Software Defined Radio and Software Defined Networks in the networking industry and Software Defined Perimeters that are used in cloud-based security. Context awareness along with artificial intelligence (machine-learning and deep-learning algorithms) these innovations will enable cars to differentiate between a work day — when getting to meetings on time and finding the closest parking lot or a valet are paramount — versus personal time, when we might be willing to make different choices. For instance, find a cheaper parking spot that minimizes walking time or locate your closest favorite restaurant. This will allow Software Defined Vehicles to be more personalized than ever before.

Change in consumer expectations are driving technology disruption in Automotive © — Mahbubul

Surviving the Disruptive Earthquake

The crucial factors for a business that wants to survive disruption is that they must be innovative and adaptive. Innovation and adaptability do not just apply to technology, but to business models as well. If we are not willing to walk away from an existing business that has become threatened, we may not be able to adapt quickly enough when change comes. We need to leverage the existing disruptive forces of Cloud, Connectivity and Contextual information wherever possible to help us stay ahead of the disruption.

The success of disruptive change depends on three things:

1. Collaborating across industries.

2. Embracing new disruptive business models.

3. Positioning the company in the future value chain.

Change is an inevitable part of the modern business environment where organizations, and the people within them, must constantly re-invent themselves to remain competitive. Sustaining success depends on an organization’s ability to embrace and adapt to a changing environment.

Today, we are beginning to see the acceleration of disruptive technologies, both in their impact and in their frequency. It is no longer enough to sustain a product, if businesses are to survive disruptive technology, it is necessary to embrace change and innovate with the future in mind.