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HP explains the convergence of “new style of IT” and connected vehicles

The cloud – in most cases a very controlled, secure private cloud – will be the technical backbone where data from the car is collected and updates to the car are provisioned. In my opinion the main challenge is not a technical one, it is the introduction of suitable processes and organization models in automotive OEMs and their innovation ecosystem.
Joachim Klink, Global Automotive Lead | HP Enterprise Services

Telematics Wire got an opportunity to interview Joachim Klink, Global Automotive Lead of HP Enterprise Services. In this role he takes care of all Microsoft Dynamics based business for the Automotive Industry, especially Joachim joined HP in 2008 as Director, Automotive & Aerospace Industry EMEA. In 2009, he has been appointed the worldwide industry architect for automotive and aerospace. In addition, from 2013 – 2014 he took over the role of the Offering Manager for the US PLM/MES Practice. HP is working with several car manufactures on building out the architectures which will support their connected vehicle systems.

Joachim_Klink_HP_Automotive
Joachim Klink

How well do you think the IT and automotive industries have been drawn together to work on connected vehicles?

It took a while, but especially in the last years we have seen a lot of joint strategic initiatives between automotive and tech companies. And it’s quite interesting to realize a substantial change of these relationships: IT companies are no longer just seen as a supplier to support in the back-end – preferably invisible. They are more and more perceived as partners on equal terms providing complementary innovation and capabilities to the OEM. Automotive OEMs are proud to announce partnerships with IT giants, and sometimes they get even a bit nervous, if you think about Google’s self-driving car.

What is the “new style of IT” that everyone thinks the automotive OEMs must embrace in order to fully realize the connected vehicle opportunity?

Connected vehicle IT is significantly different from traditional process IT. If you manage the workforce systems like PLM, ERP and Supply-Chain solutions, you have a lot of control and predictability: the number of users doesn’t change much, you know the requirements quite well, you are able to enforce IT policies, and you can set the speed of innovation. But if you are responsible for the IT portion of the connected vehicle, and thus for customer experience, you’re in a different world. The CEO wants to grow the number of connected services, cars and customers as fast as possible, but you don’t know how fast this will happen. You don’t know which connected services these customers register for and how extensive they use it. You have to support more than 1200 form factors of mobile devices running on at least three operating system platforms and three to five major releases each. Security is not only a matter of data and brand protection, humans can get killed if cars are hacked. As a result, automotive OEMs are seeking for support from IT companies in order to learn how to apply new approaches in the areas of cloud, mobility, big data and security to finally enable a “new style of business”.

You recently mentioned in one of your HP blogs, “50% more after-sales profit is achievable in Automotive”. Is this market still untapped? How do you think telematics and big data can be helpful in generating after-sales revenue for OEMs?

This market is almost untapped because the required technologies and processes are being introduced right now. With connected vehicles, the OEM has the opportunity to establish a direct channel to the customer enabling a continuous customer engagement. Leveraging this channel in both directions – from and to the vehicle/customer – the OEM can gain much better customer insights, improve the customer experience and increase the customer influence. Ultimately the OEM wants to sell more cars, parts, accessories and services. Understanding the customer needs and preferences more in detail enables the OEM to derive and suggest targeted, personalized offers; that is where big data comes into play.

What are the various challenges in managing the 3 Vs of automotive data? How HP can help in this?

As mentioned before, big data is a critical success factor for connected vehicles,providing advanced capabilities in the direction of the so-called “3 Vs”, volume, velocity and variety. In terms of volume, you talk about the sheer capacity of up to 1 GB of data per second per car e.g.in case of an autonomous vehicle. Combine this with the need for scalability due to the unpredictable use of connected services and you can imagine the level of challenge. With regards to velocity, some connected services need real-time capabilities in the true physical meaning. These services need the ability to capture, store, retrieve and process data changes of millions of cars in milliseconds, a requirement the automotive IT organization was not exposed to in the past. Variety, the 3rd“V”, is another huge challenge. Think about the wide range of data sources like engine control systems, sensors, radar, video (from entertainment systems and vehicle cameras), audio, email, etc. To manage this variety of data is a challenge for itself, and managing the combination of various data formats is an even bigger one. With Haven, HP’s sophisticated big data platform combining leading data management and analytics technologies, and our automotive industry experienced data scientist, we are the partner of choice for these challenges to many OEMs.

There have been debates over “who owns the data”? Who do you think will have the ultimate ownership of the data? OEMs, telematics service providers or 3rd parties?

None of them, to be very honest. I believe, in the long run,the ultimate owner should – and will – be the customer and driver. Some people try to picture an analogy with consumer electronics, where customers don’t care about apps having access to personal data and analyzing them. I believe in automotive this is not really applicable. Most people I know are afraid of their driving data being captured and accessible in case of a traffic offense like speeding or an accident. I believe there is a fair chance for the OEM – and any other reputable player in the value chain – to get the allowance from the customer to use selected data if firstly the customer gets an adequate benefit in return and secondly the customer can be sure his/her understanding of data privacy is met.

In your opinion, is a government mandate or legislation (like EU eCall or Brazilian SIMRAV) trigger or barrier for the rapid adoption of connected vehicles?

In general I think it accelerates the introduction of connected vehicles because it is a trigger event that nobody can ignore. All players, OEMs suppliers, telematics service providers, etc. can count on a certain date and volume of customers, which increases the predictability of the business case and thus unleashes budgets for innovation. But there are also risks, e.g. if the legislation process is too slow, finally decelerating the introduction of innovations, or if legislation is too restrictive, prohibiting the dissemination of new technologies and innovations. Think about autonomous driving as an example where legislation in the EU is lacking behind the technology and thus a risk factor for the timely introduction of this innovation.

Since automotive product cycles are relatively slower than IT and consumer electronics how do you think car makers can future proof their connected vehicle services? What role would cloud play in this?

In the near future, connected vehicles will be update capable over the air. In fact, technically this is already possible today. The product development and engineering processes will have to be bi-modal. The traditional, mechanics oriented, 2-3 years product cycle will be complemented by a much faster innovation process for electronics. No doubt, this is a huge challenge for the OEM and the engineering ecosystem, but at the same time a prerequisite to regain and maintain competitiveness in areas where connected customers have alternatives (e.g. infotainment, navigation, PoI services on smartphones). The cloud – in most cases a very controlled, secure private cloud – will be the technical backbone where data from the car is collected and updates to the car are provisioned. In my opinion the main challenge is not a technical one, it is the introduction of suitable processes and organization models in automotive OEMs and their innovation ecosystem.

What are your views on new mobility-business models of connected vehicle like car sharing? What impact can they have on the society in a long run?

Driven by connected customers and vehicles, the automotive industry is in the middle of a fundamental change where OEMs will transform from a manufacturer of cars into a holistic mobility service provider. First successful steps have already been made, if you think e.g. of GM OnStar as a service to enhance the customer experience beyond the car itself or Daimler car2go and Moovel to provide mobility options in addition to the customers own car. This type of business will grow significantly because this is what customers require. Especially younger generations are not that much interested in owning a car, they will turn towards companies which provide a customer-centric, holistic and convenient solution for their mobility needs – and they don’t care if this solution is offered by an automotive OEM or someone else. In the long run, this could lead to a much more intelligent and efficient way of transportation solving crucial societal challenges such as energy consumption, pollution and congestion.

Stay Tuned with Telematics Wire for more such interviews. We’d love to hear your comments on our content! Kindly get in touch shamik.ghosh@telematicswire.net
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