As we enter 2019, services based on automotive data are quickly evolving from visionary ideas to piloted experiments to mainstream capabilities that will change the driving experience and ultimately our entire system of urban mobility. Like many emerging technology ecosystems, headwinds remain. At Otonomo, we believe in one overarching tenet that will make automotive data protected, more useful, and more valuable: neutrality.
Neutrality Means Engaging Fairly and Without Bias
In diplomacy, neutrality is a state of disengagement. In the automotive world, it’s a state of engagement with everyone, taking an impartial approach to data access across:
• OEMs that compete with each other for consumers and fleets
• OEMs and other potential providers of automotive data, such as telematics service providers (TSPs)
• Competing Service Providers building offerings based on automotive data
• Data Providers and Data Consumers
When data is exchanged under neutral terms, all Data Providers and Consumers can participate without fear of compromising their competitive position across the marketplace. The outcome to this impartial approach is equal data access.
The Automotive Data Services Ecosystem Only Operates Well with Equal Data Access
A functioning market for services based on automotive data requires richness and variety. In practical terms, this means that developers gain access to data from multiple OEMs and are able to process that data in the same way regardless of where it came from and under similar terms and conditions.
Openness is a word that we hear more and more in the automotive data ecosystem. The ideation, product development, branding, and marketing that is needed to deliver best-in-class experiences across the huge landscape of opportunities created by connected cars is simply too vast for any one company to tackle. Even those OEMs who are trying to own the infotainment console with in-house apps and services are investing at the tip of the iceberg and can’t compete with the richness of an open data environment.
Think about the smartphone market. What if Apple had developed its own mail, calendar, map, and news app and developed exclusive partnerships with Amazon for shopping, Chase and Deutsche Bank for banking, Weather.com for weather, and EA for games and only permitted certain partnerships? Earlier this year, Apple announced that its app developers have earned a collective $120 billion since the App Store launched in 2008. As a whole, mobile apps generated $18.2 billion in revenue in Q3 alone across Apple’s App Store and Google Play. Do you think the neutral approach created more value?
Furthermore, vehicle owners and drivers have built their expectations on the smartphone economy. They are demanding a variety of choices in mobility services and apps. An open playing field will satisfy their needs much more effectively than a “walled garden.”
Finally, there are some automotive data use cases, such as parking applications or urban planning for smart cities, for which an effective solution requires data from a critical mass of private and commercial vehicles that are on the road at the same time in a certain area. No single OEM participant can deliver adequate scale to fuel these large-scale services.
In short, the automotive data services ecosystem cannot grow without neutrality. Eventually, the transportation ecosystem will not grow effectively—or meet important societal goals like reducing congestion and improving sustainability—without neutrality.
So What Makes an Automotive Data Platform Neutral?
Third-party platforms are in a much better position to be neutral than OEMs or companies that built applications which consume a lot of automotive data. However, there are six more fundamental aspects of neutrality to consider.
1. Neutrality in Funding: Limiting Bias in the Boardroom
There’s no question that the automotive data services market will never take off without the considerable involvement from automotive OEMs. That’s why we’ve been so encouraged by developments such as Daimler AG launching a Neutral Server initiative in the European Union. While OEMs have been active investors in the automotive data services ecosystem, it will struggle to thrive if participants (and competing OEMs in particular) see business decisions being made that suggest an OEM’s bias to one particular set of players over others. This perception will crop up wherever a single OEM holds a material stake in a particular data platform. If investments are taken from OEMs, they should be balanced.
OEMs have been operating for almost a century under the laws of economies of scale. They must constantly choose one supplier over another and adopt one set of standards. Data platforms operate under a very different set of rules because data creates more value when it’s used in diverse ways. Participants in a data marketplace will become wary if they don’t think that it is operating on the most efficient rules.
2. Neutrality in Business Model: Openness over Exclusivity
Neutrality as a business model is about putting the aggregate utility and value of automotive data as the goal above all other goals. For the reasons I have described above, openness creates a bigger pie in the long term, but the slices may be smaller for certain participants as the market develops.
It’s tempting for platforms to develop exclusivity arrangements with OEMs or data consumers. However, these arrangements mean that others then can’t participate in growing the market.
3. Neutrality in Go-to-Market Approach: Avoiding Competition
Neutrality in a go-to-market approach has a similar aim: to avoid creating perceptions that what benefits the data platform may not benefit other participants. This means, for example, not offering services that compete with those of other participants in the marketplace. After all, what data-based business would want to expose the data parameters that form the recipe of its “secret sauce” for its competitor to see? A neutral platform enables data services but does not develop them.
4. Neutrality in Data Collection: Eliminating Hardware Lock-in
OEMs compete based on the experience they deliver within their vehicles. They want full control over every component. Any automotive data services platform that requires a specific on-board diagnostics (OBD) module or dongle has just created a disincentive for all OEMs to participate. If the required hardware does not meet their needs, they will simply opt out.
5. Neutrality in Data Management: An Impartial Cloud
In the early days of the automotive data services platform market, most OEMs told us that their automotive data could only be stored within their own data centers. Today, they recognize an important business conflict; no OEM or TSP will want to put proprietary data on a competitor’s cloud but that cross-OEM data aggregation is a necessity for many of the most important, impactful use cases. A neutral ecosystem depends on industry-wide trust with secure, cloud-to-cloud interfaces between data providers and a third party, as well as with hardened technology to prevent data from crossing back to providers who are not entitled to receive it.
6. Neutrality in the Data Itself: Creating a Universal Language to Equalize Datasets
To date, there have been no successful moves toward standardization in connected car data formats. Even within the same OEM, data formats may vary widely. Across OEMs, standardization raises competitive issues. As a result, the automotive data services ecosystem must include an intermediary to translate data from multiple providers into a common language that the applications and services can understand and that allows them to process that data in consistent ways. This intermediary makes all datasets equal; one data element from one OEM is not more usable or valuable than another. More importantly, it makes application development much more efficient and effective for every developer.
Look to Neutrality as the North Star for Automotive Data Innovation
The pace of change really began to accelerate in the latter months of 2018, and we’re expecting to see a lot more change in the automotive data services platform market in 2019. As you evaluate it and set priorities for how your business will function within it, I encourage you to keep neutrality top-of-mind.
Neutrality builds a market that’s:
- Open and inclusive, not small and exclusive
- Available to companies of all sizes
- Fair and equal, not biased and non-competitive
- Increasing automotive data value for all participants
Neutrality means that everyone in the market—OEMs, data providers, service providers and especially consumers—will be sharing a piece of a much bigger circle of value.