Connected Car Data Is the Fresh Oil
Last November, Intel CEO Brian Krzanich stood on stage at the LA Auto Demonstrate and proclaimed, "data is the fresh oil." This is not a news, of course. For years, tech companies from Google to Facebook have drilled for data collective by connected devices and tapped into geysers of cash.
Now that cars are becoming connected, automakers and others want in on the data -for-dollars boom. It’s estimated that over three hundred eighty million connected cars will be on the road by two thousand twenty one globally, more than dual the number now. The data they generate will be crimson meat to marketers since they’ll be able to log people’s location, driving habits, in-car entertainment choices, and more, while automakers and others will be able to better predict maintenance issues and provide other services to keep customers glad and loyal.
The automotive industry is still in the very early stages of figuring out how to cash in on connected car data. Through several partnerships and acquisitions focused on advancing vehicle connectivity and refining data analytics, automotive mega supplier Delphi’s latest moves give a peek of what the future of driving data collection could look like—and how automakers could turn massive amounts of car data into big bucks.
Delphi recently acquired a minority stake in two Israeli companies. One, Valens, develops chips that can budge data up to six times swifter within vehicles than current technology. The other, Otonomo, has designed an agnostic data collection platform that can serve as a broker inbetween automakers and third parties.
These latest investments in connected car big data solutions are part of a larger and long-term strategy by Delphi. In 2015, the company purchased data-analytics start-up Control-Tec, while earlier this year it acquired Movimento, which provides over-the-air software update capabilities for automotive applications.
If you put together the lumps of Delphi’s acquisition strategy, it’s effortless to get a larger picture of where the company—and the auto industry—is headed with connected car data.
Concrete Example of Leveraging Car Data
The Otonomo investment, which was part of a latest $25 million funding round for the start-up, perhaps provides the most concrete example of how automakers could leverage vehicle data and what it means for car owners. Car & Driver noted in an article this week that "what makes [Otonomo’s] services attractive to automakers is the capability to aggregate data from numerous companies and provide a more comprehensive data set to interested parties."
While automakers such as Ford with its Ford Pass platform and GM with its OnStar AtYourService feature are presently supplying data to third parties in order to suggest discounts and perks to drivers, an industrywide data-collecting platform could supercharge the commercial potential of connected cars. Companies ranging from auto insurance companies to roadside retailers would, of course, be antsy to buy such connected car data.
Related
But car owners may not be so keen to have automakers harvest driving data, and consumer advocacy groups such as AAA as well as politicians have asked automakers for details on how they extract, process, and use driver data. As part of legislation sponsored by Senator Ed Markey (D-Mass.), the federal government would establish standards that not only safeguard driver privacy, but also force the auto industry to be more see-through about how it is used.
Delphi noted to Car & Driver that data harvested by Otonomo is anonymized and drivers can opt out of receiving connected services, albeit the magazine added that this "doesn’t mean that drivers who do use those services would have any say in what automakers do with the data those services collect." It also pointed out that since a Republican-led Congress recently voted to roll back FCC confinements on how ISPs can sell data collected from their customers, Markey’s legislation likely has the same possibility of passing as the proverbial snowball’s chance in hell.
You can bet that Delphi and Otonomo will be followed by other prospectors looking to strike it rich by mining vehicle data. And it’s also not too farfetched that, as Otonomo CEO Ben Volkow predicted in a CNN article earlier this year, by two thousand twenty automakers may make more money selling vehicle data than cars themselves.