It is hard to pinpoint when exactly the ‘connected car’ emerged in the automotive industry. Depending on how you look at it, software has been involved in cars since way back in the 90’s, when General Motors first introduced OnStar to its Cadillac DeVille, Seville and Eldorado. The purpose of OnStar was to ensure safety to customers by alerting authorities in the event of an accident, allowing emergency help to arrive quicker through a cellular telephone connection to a response centre. Since then, the industry has seen a flood of different technologies enter the vehicle, WiFi hotspots, infotainment systems and mobility management. All of these have revolutionised the traditional car model, making trips more enjoyable and safer.
However, it is only now that the industry has truly moved into a new ecosystem of connectivity, with autonomous software, vehicle-to-vehicle relationships and cloud-based software which has turned the car into what many call ‘the third living space’. Speaking to Kamyar Moinzadeh, President and CEO at the connected car pioneer Airbiquity, I find out how important this kind of software has been to the transformation of the automotive and transport industries. Leading the company from 2002, he has more than 20 years of experience in the wireless industry, including senior positions at AT&T Wireless Services and Motorola, making him an important asset to the development of the connected car.
Moinzadeh agrees that connected technologies have been crucial to the development of the car, analysing the steps that the industry has taken since Onstar’s introduction to the world. “Software has been absolutely central to the transformation of the automotive industry that’s underway today. The first phase of connected car was about establishing vehicle connectivity to off-board services to deliver features such as concierge access, crash notification and basic remote vehicle management like door lock/unlock,” he says. “The second phase was about smartphone integration and infotainment delivery to extend the consumer mobile app experience into the vehicle cabin. The third phase, which we’re entering now, is about further leveraging software-based vehicle connectivity for over-the-air (OTA) software updates and the introduction of data and analytics power driving centric services that are 100% focused on driving and owning vehicles.”
Moving into this space is certainly exciting, with a truly connected future on the horizon as the automotive industry fills up with software specialists who are vital for the progression of the ‘connected era’ and hold the experience needed for this new leap for automakers. However, this aggressive expansion of technology has created a risky and dangerous place for manufacturers, as they must race to implement the latest technology in their vehicles before rivals, while remaining safe and reliable. I ask Moinzadeh how businesses can find the right balance between rolling out technology quickly and protecting customers from cyber threats. “There is no single balance point that applies to all automakers. Each automaker will have to determine what works best for them given the role they want software to play in their products and the amount of time and investment they’re willing to spend to achieve their goals,” he stresses. Moinzadeh wants automakers to understand what is happening from a technology perspective, in order to refine their strategy and planning in order to adopt this kind of software that will increase safety, reliability and efficiency. This needs to happen quickly, otherwise they will be left behind. “Those that move slowly - or not at all - will surely limit their ability to compete and survive going forward,” he adds. Traditional business structures in the automotive world will not be able to survive in this new era, so businesses must evolve and adapt before others take over.
Now that businesses in the automotive industry are focusing on technology and advanced software, transportation has shifted into a mobility focus, changing the way we see vehicle transportation, with consumers more interested in the technology of the vehicle, rather than the driving experience. Once more, this has changed the way automotive businesses have organised themselves, being heavily invested in how the vehicle drives with technology as a bonus. This new demand has made it extremely difficult for automakers to adapt to, which is why Moinzadeh believes that it takes a software specialist like Airbiquity to help them succeed in the modern market of connectivity.
“When it comes to providing connected vehicle services, the focus on technology and advanced software has been very positive in terms of innovation and revenue growth. When it comes to regional consumer vehicle demand it hasn’t had much impact,” he says. “Airbiquity delivers services at a country, regional, or global level based on the deployment goals of our automotive customers which are aligned with the rate and pace of consumer demand for vehicles and related software technologies.” Through partnerships like this, automakers can ensure that they stay agile and adapt to market shifts until cementing themselves as a mobility leader.
On the other hand, this does require that the automaker makes the first move, which has been an issue over the past few years. Although it is difficult to pinpoint the exact reason, many automakers did not see any revenue opportunities stemming from new software until recently. Only now has the connected car generated substantial profit and it will only continue to increase as EVs and autonomous cars are rolled out. Now, automakers are looking to adopt technology, such as OTA updates and cloud capabilities in order to lead in a promising market. Moinzadeh tells me that, to the traditional automaker and supplier, the introduction of new software and cloud based services needed to be integrated into existing designs, procurement, production and everyday operations, something that is incredibly difficult when you look at the history of the automotive industry. “Accomplishing this takes time, given the end-to-end complexity of automotive and focus on safety, reliability, and quality,” he comments. “There were also significant upfront investments that needed to be made in a low margin business to initially establish vehicle connectivity and deliver established use cases such as safety, security and infotainment.”
It is essential to establish relationships between software specialists and automakers in order to gain long-term business and build a strong customer base, but it is still extremely difficult to integrate new ideas and processes within an OEM’s linear operations. This means that businesses like Airbiquity need to go that extra step, collaborating with the customer throughout the integration process.
“In addition to establishing relationships, vendors need to establish positive programme deployment track records and customer-vendor trust. Airbiquity has physical sales teams located in the Americas, Europe, and Asia that work directly with automotive customers to compete for and win programme deployments,” says Moinzadeh. “Once awarded the business, senior management, project managers, programme managers, operations managers, and engineers team with their customer counterparts to plan, develop, and launch the deployment based on agreed-upon schedules and budgets. In some cases, the end-to-end process can take up to 24 months, and during that time both parties get to know each other very well.” It is evident that both parties need to collaborate in many different parts of the business to allow development and work towards an end product that is safe, effective and satisfies consumers in the long-run.
By doing so, automakers can also harness valuable knowledge and experience through the technology industry. Otherwise, it becomes incredibly hard for them to exploit the software potential alone, not having the required knowledge to deal with constantly evolving technology. “Software development at its core is an iterative process that benefits from the ability to continually revise code and release updates to improve features, security, and consumer experiences,” says Moinzadeh. “This process is at odds with the traditional hardware-oriented development, bill-of-material, and production processes of automotive that are much more rigid and have well defined starting and ending points.” These automotive engineering and IT organisations have had to learn how to manage this kind of software development and work alongside external software vendors such as Airbiquity as part of their daily jobs in the modern era.
“Another area where we’ve seen challenges is in procurement organisations which have had to learn how to bid for and purchase software related services that need to be funded both during vehicle production and post-sale consumer use,” he continues. “The good news is that both automotive customers and software vendors are becoming much more adept at working efficiently and effectively together to get the job done.” This once again stresses the importance of collaboration between two very different sides of the industry; at the end of the day, without either of them, the connected car would not exist.