The Race To Monetize Vehicle Data Gets More Crowded as BMW Hooks Up With IBM – Forbes
As cars and trucks get ever more packed with sensors and connectivity, they are already generating tens of gigabytes of data per hour and will soon be producing terabytes per hour. In this modern world, data is often deemed as good as gold, just ask Google and Facebook. That’s why everyone connected to the auto industry is scrambling to figure out ways to make a business out of data with the latest being BMW and IBM. The two are partnering up on the automakers CarData platform.
Over the past year we’ve seen a bunch of announcements of automotive data ventures from Ford’s acquisition of Silicon Valley software company Pivotal to develop FordPass to Ericsson’s Connected Vehicle Marketplace to Delphi’s investment in Otonomo. Like each of these CarData is designed to be a platform that aggregates data from driver’s vehicles and makes it available to third-party service providers.
Over the next several years as telematics become increasingly ubiquitous, it’s likely that the companies in this space will experiment with a variety of models for making money from Data. As the company that has been doing telematics longer than anyone, OnStar will likely keep everything in-house, just as relative newcomer Ford seems to be doing with FordPass, building platforms and interfaces that service providers can plug into. Ericsson and Delphi/Otonomo are providing white-label services that OEMs that can utilize if they don’t want build and manage their own.
BMW and IBM seem to be doing more of the latter model with raw information from customers that opt-in, being anonymized and then passed into IBM’s BlueMix cloud platform. BMW is pilot partner for IBM’s platform. Once IBM has it, the Watson IoT system will be used to analyze the data, gain insights and make it available to suitable third-party providers.
Last week at the TU-Automotive conference in Detroit, Heini Schulz, BMW North America ConnectedDrive services manager described CarData which launched in Europe a few weeks ago. Roughly 8.5 million BMW vehicles on the road today have built-in telematics systems that can operate with CarData. Once a customer opts-in, a wide variety of information about the state of vehicle systems, how the car is driven and where it goes can be made available to the platform.
So far 10 service providers have signed up to use the CarData platform although none yet are insurance companies. Schulz explained that while insurers are expected to be one of the main businesses that utilize the platform to provide usage-based insurance pricing, like many large companies they have complex approval processes that will take some time to verify that everything is properly secured. Other types of providers that are expected to use the service are smart parking systems that enable drivers to find, reserve and pay for parking in advance, repair shops and media streaming companies.
For the automakers and platform providers, the goal is to share in some of the revenue from third-parties. This could happen by taking a percentage of a sale much smartphone app stores do, or perhaps through some sort of subscription model. Over the long-term, these platforms could be extended to support autonomous mobility services as well.