{"id":51030,"date":"2016-10-27T09:17:22","date_gmt":"2016-10-27T13:17:22","guid":{"rendered":"http:\/\/cloudtweaks.com\/?p=51030"},"modified":"2024-05-01T07:28:16","modified_gmt":"2024-05-01T11:28:16","slug":"connected-vehicles-iot","status":"publish","type":"post","link":"https:\/\/cloudtweaks.com\/2016\/10\/connected-vehicles-iot\/","title":{"rendered":"Part 2 &#8211; Connected Vehicles: Paving the Way for IoT on Wheels"},"content":{"rendered":"<h1 style=\"text-align: left;\" align=\"CENTER\">Connected Vehicles: IoT on Wheels<\/h1>\n<p>As vehicles become the hottest \u201c<em>thing<\/em>\u201d in IoT, the automotive, heavy equipment, and machinery industries face some of the most significant opportunities in decades.<\/p>\n<p>I\u2019ve previously explored some connected car use cases and the opportunities and challenges that need to be considered when developing a monetization strategy.<\/p>\n<p>Specifically in <strong><a href=\"https:\/\/cloudtweaks.com\/2016\/09\/connected-vehicles-paving-way-iot-wheels\/\">Part 1<\/a><\/strong>, I covered the four main business offering categories: <em>1) Transportation as a Service; 2) Post-Sale\/Lease Secondary Services; 3) Road Use Measurement Services; and 4) Secondary Data Stream Monetization<\/em>.<\/p>\n<p>Here, in Part 2, I offer further guidelines, best practices, and guardrails to maximize commercial success of major players in this technology marketplace.<\/p>\n<h2 align=\"JUSTIFY\">Who are the main players?<\/h2>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-51032 size-full\" title=\"Connected Vehicles\" src=\"https:\/\/cloudtweaks.com\/wp-content\/uploads\/2016\/10\/car-future-cloudtweaks.png\" alt=\"General Motors\" width=\"760\" height=\"476\" srcset=\"https:\/\/cloudtweaks.com\/wp-content\/uploads\/2016\/10\/car-future-cloudtweaks.png 760w, https:\/\/cloudtweaks.com\/wp-content\/uploads\/2016\/10\/car-future-cloudtweaks-300x188.png 300w\" sizes=\"(max-width: 760px) 100vw, 760px\" \/><\/p>\n<p align=\"JUSTIFY\">So who are they? There are many systems and vendors that belong in the back-office stack and are required to make a connected car initiative successful. The following represents lead players who are already on the front line, offering monetized connected car services of all types to a growing market.<\/p>\n<ul>\n<li><strong>Original Equipment Manufacturers (OEMs)<\/strong> \u2013 The actual makers of vehicles themselves stand front and center in the connected car world, arguably better positioned than anyone to realize secondary monetization potential from a captive audience with high propensity for brand loyalty. Examples include household names: General Motors, Audi, BMW, Subaru, Caterpillar, and Komatsu, and John Deere.<\/li>\n<\/ul>\n<ul>\n<li><strong>Third-Party Device Manufacturers<\/strong> \u2013 These devices often connect to vehicle systems using the existing capabilities of On-Board Diagnostic (OBD) ports, which have been mandated since 1996. Along with the connectivity offered by WiFi, cellular networks and Bluetooth, this group includes entities offering everything from aftermarket telematics devices to personalization and safety systems like Verizon Hum, and mobile phones themselves. Ubiquitous mobility providers <a class=\"wpil_keyword_link\" href=\"https:\/\/www.dpbolvw.net\/click-101149405-15542019?sid=CT-Thought-Leaders-Promo\/\" target=\"_blank\" rel=\"noopener\" title=\"Google\" data-wpil-keyword-link=\"linked\" data-wpil-monitor-id=\"611\">Google<\/a> and Apple loom heavily within this broad group of players determining how exactly to stake their ground.<\/li>\n<\/ul>\n<ul>\n<li><strong>Third-Party Service Providers<\/strong> \u2013 Included here is any service provider that is largely agnostic to a car or the device\u2019s manufacturer. Insurance and maintenance providers are perhaps the most well-known members of this group. However, the broadest definition of this category also includes any service not directly offered by OEMs or third-party devices themselves: the popular Waze mapping app and the fleet management service offered by companies like WEX are two examples.<\/li>\n<\/ul>\n<h2 align=\"JUSTIFY\">Where are the opportunities and challenges?<\/h2>\n<p>Below are some high-level challenges and opportunities, with some real-life examples:<\/p>\n<p><strong>OEMs Monetizing Transportation as a Service<\/strong><\/p>\n<ul>\n<li><strong>Opportunities<\/strong> \u2013 Viable opportunities differ depending on the exact OEM and the exact TaaS model. For example, luxury brands such as Audi, BMW, and Bentley are best positioned to offer services which benefit from brand affinity and prestige. OEMs with a broader install base and lower ASPs are better positioned to benefit from models like group, and peer-to-peer sharing models (<em>e.g. the \u201cairport sharing\u201d component of Ford\u2019s new Ford Pass offering<\/em>).<\/li>\n<\/ul>\n<ul>\n<li><strong>Challenges<\/strong> \u2013 Existing system infrastructure for selling\/leasing cars was designed for no more than two names on a title or lease and must be dramatically enhanced or replaced. Managing vehicle inventory for subscription or on-demand access requires fleet management strategies and systems that must be tightly tailored to individual marketplaces, in terms of geography, demographics, and days\/times. Effective and comprehensive fleet management direct to consumers, perfected by entities like Zipcar, remain elusive to OEMs entering the game, and will require a significant amount of trial-and-error \u2014 potentially resulting in the disintermediation of the entrenched dealer networks.<\/li>\n<\/ul>\n<p><strong>Aftermarket Device Manufacturers Monetizing Secondary On-Board Services<\/strong><\/p>\n<ul>\n<li><strong>Opportunities<\/strong> \u2013 Most cars on the road now (<em>and for a few years to come<\/em>) do not benefit from OEM-provided connected services, but are being driven by consumers who will demand them nonetheless in what can be called a \u2018retrofit\u2019 model. Due to both the long lifespan of vehicles and the extensive amount of time it takes any OEM to go from concept to production, the aftermarket is inherently positioned to be far more agile and much faster to market. Aftermarket devices are far more natively bound to drivers than to vehicles, so the services can move from one car to another as desired.<\/li>\n<\/ul>\n<ul>\n<li><strong>Challenges<\/strong> \u2013 OEMs are natively positioned to deliver these offerings at point of initial sale\/lease, even to the point of treating them as \u2018loss leaders\u2019 and effectively giving them away in order to incent the vehicle purchase itself, or to make money solely on the accompanying service subscription that enables their \u2018embedded\u2019 devices, whereas aftermarket devices require stickiness to encourage an additional purchase and\/or relationship on the part of the customer above and beyond what they are already paying for the vehicle.<\/li>\n<\/ul>\n<p><strong>Third-Party Service Providers Monetizing Road Use Measurement Services<\/strong><\/p>\n<ul>\n<li><strong>Opportunities<\/strong> \u2013 <a class=\"wpil_keyword_link\" href=\"https:\/\/cloudtweaks.com\/2018\/11\/insurance-companies-using-big-data\/\" target=\"_blank\" rel=\"noopener noreferrer\" title=\"Insurance Companies\">Insurance Companies<\/a> are already leveraging the available data streams from embedded OBD systems to provide usage-based insurance to infrequent drivers (<em>potentially opening up a new market segment<\/em>), or to reward safe drivers with additional discounts on their premiums. Government entities, suffering from declining fuel tax revenues due to more efficient (<em>and non-fuel-consuming electric<\/em>) vehicles are looking to compensate with direct taxation models based on actual public road use, using data streams from embedded or \u2018add-on\u2019 telematics devices (<em>e.g. the trial \u2018OReGO\u2019 program underway in Oregon<\/em>). Unlike many other on-board services which require an \u2018always connected\u2019 or \u2018almost always connected\u2019 state in order to work properly, most Road Use Measurement Services work with just intermittent connectivity by using a data \u2018store-and-forward\u2019 model, thus removing the cost of and dependency on cellular or satellite network providers.<\/li>\n<\/ul>\n<ul>\n<li><strong>Challenges<\/strong> \u2013 Effective market penetration will likely require \u2018device agnosticism\u2019, which will in turn require sophisticated data stream management platforms capable of organizing and transforming data from myriad sources and formats. Third-party device manufacturers may opt to offer their own (<em>i.e. proprietary<\/em>) accompanying secondary services, which may supplant the possibility of a vibrant \u2018open\u2019 market in which device-agnostic service providers can play.<\/li>\n<\/ul>\n<p><strong>OEMs Monetizing Secondary Data Streams<\/strong><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-42550 alignnone\" src=\"https:\/\/cloudtweaks.com\/wp-content\/uploads\/2015\/06\/meta-data-e1435666549474.jpg\" alt=\"meta-data\" width=\"750\" height=\"450\" srcset=\"https:\/\/cloudtweaks.com\/wp-content\/uploads\/2015\/06\/meta-data-e1435666549474.jpg 750w, https:\/\/cloudtweaks.com\/wp-content\/uploads\/2015\/06\/meta-data-e1435666549474-300x180.jpg 300w\" sizes=\"(max-width: 750px) 100vw, 750px\" \/><\/p>\n<ul>\n<li><strong>Opportunities<\/strong> \u2013 The sensors on vehicles can produce data streams that the OEM may choose not to share with third parties. This data may be used to provide ongoing revenue streams to dealers. On a granular level, this data can be used to build driver profiles, which in turn can drive individualized direct marketing efforts for available add-on services, or the suggested purchase of a more suitable next vehicle when the time comes. On an aggregate level, this data can be sold to third parties for subsequent commercial or informational purposes.<\/li>\n<\/ul>\n<ul>\n<li><strong>Challenges<\/strong> \u2013 OEMs tend to possess neither the mindset nor the infrastructure required to think and act like purveyors of data, as they are historically purveyors of steel. Consumers are ever more wary of implicit data collection, from a privacy standpoint and a security standpoint.<\/li>\n<\/ul>\n<p>Regardless of the kind of business or the offerings, all the players are working to create new revenue streams from connected services and monetizing alternatives that are tied to the customer rather than traditional purchasing and leasing streams that are tied to the product. The winners will be the ones that provide the best customer experience.<\/p>\n<p>The road to success has its share of potholes. The biggest ones have little to do with the technology itself but constructing a viable business model <em>(along with processes and supporting technologies<\/em>) where monetization and recurring revenue streams are profitable.<\/p>\n<p>While we aren\u2019t sure whether the next big buck will come from &#8211; inside the vehicle or outside of it &#8211; we are clear that the IoT is igniting new and more revenue tracks for the automotive industry. The themes and scenarios offered, which are nearly universally applicable across all potential connected car go-to-market efforts, can help the category on their journey towards IoT nirvana.<\/p>\n<p>By Tom Dibble<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Connected Vehicles: IoT on Wheels As vehicles become the hottest \u201cthing\u201d in IoT, the automotive, heavy equipment, and machinery industries face some of the most significant opportunities in decades. I\u2019ve previously explored some connected car use cases and the opportunities and challenges that need to be considered when developing a monetization strategy. Specifically in Part [&hellip;]<\/p>\n","protected":false},"author":337,"featured_media":45252,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_breakdance_hide_in_design_set":false,"_breakdance_tags":"","footnotes":""},"categories":[2,3,4,10],"tags":[90],"acf":[],"_links":{"self":[{"href":"https:\/\/cloudtweaks.com\/wp-json\/wp\/v2\/posts\/51030"}],"collection":[{"href":"https:\/\/cloudtweaks.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cloudtweaks.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cloudtweaks.com\/wp-json\/wp\/v2\/users\/337"}],"replies":[{"embeddable":true,"href":"https:\/\/cloudtweaks.com\/wp-json\/wp\/v2\/comments?post=51030"}],"version-history":[{"count":1,"href":"https:\/\/cloudtweaks.com\/wp-json\/wp\/v2\/posts\/51030\/revisions"}],"predecessor-version":[{"id":126959,"href":"https:\/\/cloudtweaks.com\/wp-json\/wp\/v2\/posts\/51030\/revisions\/126959"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/cloudtweaks.com\/wp-json\/wp\/v2\/media\/45252"}],"wp:attachment":[{"href":"https:\/\/cloudtweaks.com\/wp-json\/wp\/v2\/media?parent=51030"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cloudtweaks.com\/wp-json\/wp\/v2\/categories?post=51030"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cloudtweaks.com\/wp-json\/wp\/v2\/tags?post=51030"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}