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BLOG: The connected car

Andrew Milroy | June 3, 2013
Driving new opportunities for ICT suppliers.

Onboard, you will be able to work or access entertainment. Accidents will be virtually eliminated and cars will consume substantially less energy. Ultimately, insurance rates will fall dramatically and some mass transit systems may gradually be replaced by personalised transportation run from a common network. It is the IT industry that will enable this transformation and reap huge rewards in the new automotive paradigm.

Massive Opportunities

Translated into IT terminology, this creates massive opportunities for providers of high speed networks, cloud computing vendors and analytics software vendors.

According to LMC Automotive, global automotive sales exceeded 80 million in 2012 and will grow to 83 million in 2013. In the next few years, this will represent 100 million complex computing devices that can connect to the cloud over mobile networks. Vehicles will contain networking hardware, infrastructure software, software applications, and analytics software. This is a multibillion dollar opportunity for existing IT companies. It also offers opportunities for innovation which will drive the emergence of new technology firms.

Microsoft and Google are working closely with major manufacturers to offer connected car platforms. Microsoft is working with Toyota to use Azure as a cloud based mobility platform. Google is working with Ford to offer a cloud-based platform that offers a variety of features including suggestions of optimised driving routes.

IT vendors are benefitting from a shift away from proprietary systems to modular cloud based offerings typically provided by IT vendors such as Google,, Microsoft, IBM and Amazon. These offerings massively reduce development time and costs for automotive manufacturers. Perhaps even more importantly, they can also be integrated to the broader automotive ecosystem. This would be very challenging or impossible if proprietary systems developed by automotive firms are used.

In summary, the automotive industry is rapidly incorporating additional automation into vehicles. As IT firms get more heavily involved, this process will accelerate. In our old age, we may well look back with amazement at the fact that individuals were given so much control of cars. We may ask why we tolerated such high accident rates, such high levels of congestion, and rampant pollution generated by cars.

Andrew Milroy is vice president, ICT Practice, Asia Pacific, Frost & Sullivan.


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