The future of the modern car is actually digital
A version of this essay was originally published at Tech.pinions, a website dedicated to informed opinions, insight and perspective on the tech industry.
The continuing evolution of the modern automobile is arguably one of the most arousing and most significant developments in the tech world today. In fact, it’s very likely one of the most significant business and societal stories we’ve seen in some time.
The leadership at no less venerable a player than Ford Motor Co. obviously felt the same way — they just substituted their CEO, despite his long-term tenure with the company and the record-setting profits he helped drive during his three-year leadership there. The reason? Not enough progress on advancing the company’s cars forward in the technology domain, particularly with regard to electrified vehicles, autonomous driving and fresh types of transportation service-focused business models.
As has been noted by many, these three capabilities — electrification, autonomy and cars as a service — are considered the key trends driving the auto market today and into the future, at least as far as Wall Street is worried. In reality, the picture isn’t almost that elementary, but it is clear that tech-industry-driven initiatives are driving the agenda for today’s carmakers. And it’s pushing many of them into awkward positions.
It turns out, however, that in spite of the importance of this critical evolution of automobiles, this is one of those issues that’s a lot firmer to overcome than it very first shows up.
Part of the problem is that as cars have advanced and various technologies have been integrated into them, they’ve evolved into enormously elaborate machines. Today’s automobiles have as many as one hundred fifty programmable computing elements (often called Electronic Control Units, or ECUs), remarkably large (and strong) amounts of wiring, numerous different types of electronic signaling and interconnect buses, and up to one hundred millions of lines of software, in addition to the thousands of mechanical parts required to run a car. Frankly, it’s somewhat of a miracle that modern cars run as well as they do, albeit reports of technical glitches and other problems in newer cars do seem to be on the rise.
In addition to the mechanical and computer architecture complexity of the cars themselves, the organizational and business model complexity of today’s car companies and the entire auto supply chain also contribute to the problem. Having evolved over the more than 100-year history of the automotive industry, the system of numerous Tier one suppliers, such as Harman, Delphi, Bosch and others, buying components from Tier two and Tier three suppliers down the chain and car brand OEMs (such as Ford) piecing together numerous subsystems from different combinations of Tier 1s to build their cars is notoriously complicated.
But throw in the fact that there are often groups within the carmaker that are specifically responsible for a given ECU (such as, say, heating, air conditioning and other “comfort” controls) and whose jobs may be at risk if someone suggests that the company switch to a simpler architecture in which they combined the functionality of numerous ECUs into a smaller, more manageable number and, well, you get the picture.
If ever there was an industry ripe for disruption — and in need of a tech overhaul — the automotive industry is it. That’s why many traditional carmakers are worried, and why many tech companies are salivating at a chance to get a chunk of the multi-trillion-dollar global automotive industry.
It’s also why companies like Tesla have made such a splash. Despite its very modest sales, it is seen as a credible attempt to drive the kind of technological and organizational disruption that many people believe is necessary to convert the automotive industry. In truth, however, because of the inherent and ingrained nature of the auto supply chain, even Tesla has to go after many of the conventions of numerous Tier one suppliers, etc., that its rivals use. The problem is that deeply embedded.
But even as those issues get addressed, they are indeed just a prelude to yet more innovations and opportunities for disruption. Like many modern computing devices — and, to be clear, that’s what today’s cars have become — the technological and business model for autos is leisurely but surely moving toward a software-and-services-focused treatment. In other words, we’re moving toward the software-defined “digital car.”
In order for that to happen, several key challenges need to be addressed. Most importantly, major enhancements in automotive security — both through architectural switches and software-driven advances — have to occur. The potential for life-threatening problems if either standard or autonomous cars get hacked should make this point badly visible.
Connectivity options, speed and reliability also have to be improved, and that’s where industry-wide efforts like 5G and specific products from vendors like Qualcomm and Intel can make a difference.
Eventually, car companies and critical suppliers need to figure out the kinds of services that consumers will be willing to pay for and supply platforms and architectures that can enable them. Like many other types of hardware devices, profit margins on cars are not very large, and with the enhancing amount of technology they’re going to require, they could even commence to shrink. As a result, car companies need to think through different ways of generating income.
Gratefully, a number of tech startups and established vendors, such as Harman, are working on creating cloud-based platform delivery systems for automotive services that are expected to embark bringing these capabilities to life over the next several years.
As with any major transition, the stir to a digital car model won’t be effortless, quick or bump-free, but it’s roped to be an interesting rail.
Bob O’Donnell is the founder and chief analyst of Technalysis Research LLC, a technology consulting and market research hard that provides strategic consulting and market research services to the technology industry and professional financial community. Reach him @bobodtech.
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The future of the modern car is actually digital
The future of the modern car is actually digital
A version of this essay was originally published at Tech.pinions, a website dedicated to informed opinions, insight and perspective on the tech industry.
The continuing evolution of the modern automobile is arguably one of the most arousing and most significant developments in the tech world today. In fact, it’s most likely one of the most significant business and societal stories we’ve seen in some time.
The leadership at no less venerable a player than Ford Motor Co. obviously felt the same way — they just substituted their CEO, despite his long-term tenure with the company and the record-setting profits he helped drive during his three-year leadership there. The reason? Not enough progress on advancing the company’s cars forward in the technology domain, particularly with regard to electrical vehicles, autonomous driving and fresh types of transportation service-focused business models.
As has been noted by many, these three capabilities — electrification, autonomy and cars as a service — are considered the key trends driving the auto market today and into the future, at least as far as Wall Street is worried. In reality, the picture isn’t almost that plain, but it is clear that tech-industry-driven initiatives are driving the agenda for today’s carmakers. And it’s pushing many of them into awkward positions.
It turns out, however, that in spite of the importance of this critical evolution of automobiles, this is one of those issues that’s a lot stiffer to overcome than it very first shows up.
Part of the problem is that as cars have advanced and various technologies have been integrated into them, they’ve evolved into enormously elaborate machines. Today’s automobiles have as many as one hundred fifty programmable computing elements (often called Electronic Control Units, or ECUs), remarkably large (and powerful) amounts of wiring, numerous different types of electronic signaling and interconnect buses, and up to one hundred millions of lines of software, in addition to the thousands of mechanical parts required to run a car. Frankly, it’s somewhat of a miracle that modern cars run as well as they do, albeit reports of technical glitches and other problems in newer cars do seem to be on the rise.
In addition to the mechanical and computer architecture complexity of the cars themselves, the organizational and business model complexity of today’s car companies and the entire auto supply chain also contribute to the problem. Having evolved over the more than 100-year history of the automotive industry, the system of numerous Tier one suppliers, such as Harman, Delphi, Bosch and others, buying components from Tier two and Tier three suppliers down the chain and car brand OEMs (such as Ford) piecing together numerous subsystems from different combinations of Tier 1s to build their cars is notoriously sophisticated.
But throw in the fact that there are often groups within the carmaker that are specifically responsible for a given ECU (such as, say, heating, air conditioning and other “comfort” controls) and whose jobs may be at risk if someone suggests that the company switch to a simpler architecture in which they combined the functionality of numerous ECUs into a smaller, more manageable number and, well, you get the picture.
If ever there was an industry ripe for disruption — and in need of a tech overhaul — the automotive industry is it. That’s why many traditional carmakers are worried, and why many tech companies are salivating at a chance to get a chunk of the multi-trillion-dollar global automotive industry.
It’s also why companies like Tesla have made such a splash. Despite its very modest sales, it is seen as a credible attempt to drive the kind of technological and organizational disruption that many people believe is necessary to convert the automotive industry. In truth, however, because of the inherent and ingrained nature of the auto supply chain, even Tesla has to go after many of the conventions of numerous Tier one suppliers, etc., that its rivals use. The problem is that deeply embedded.
But even as those issues get addressed, they are indeed just a prelude to yet more innovations and opportunities for disruption. Like many modern computing devices — and, to be clear, that’s what today’s cars have become — the technological and business model for autos is leisurely but surely moving toward a software-and-services-focused treatment. In other words, we’re moving toward the software-defined “digital car.”
In order for that to happen, several key challenges need to be addressed. Most importantly, major enhancements in automotive security — both through architectural switches and software-driven advances — have to occur. The potential for life-threatening problems if either standard or autonomous cars get hacked should make this point badly visible.
Connectivity options, speed and reliability also have to be improved, and that’s where industry-wide efforts like 5G and specific products from vendors like Qualcomm and Intel can make a difference.
Ultimately, car companies and critical suppliers need to figure out the kinds of services that consumers will be willing to pay for and produce platforms and architectures that can enable them. Like many other types of hardware devices, profit margins on cars are not very large, and with the enhancing amount of technology they’re going to require, they could even commence to shrink. As a result, car companies need to think through different ways of generating income.
Gratefully, a number of tech startups and established vendors, such as Harman, are working on creating cloud-based platform delivery systems for automotive services that are expected to embark bringing these capabilities to life over the next several years.
As with any major transition, the budge to a digital car model won’t be effortless, rapid or bump-free, but it’s roped to be an interesting rail.
Bob O’Donnell is the founder and chief analyst of Technalysis Research LLC, a technology consulting and market research rock hard that provides strategic consulting and market research services to the technology industry and professional financial community. Reach him @bobodtech.
Subscribe to the Recode newsletter
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