This Startup Is Helping Daimler And BMW Compete With Google For $10 Trillion Market – Forbes
At $10 trillion, the market for data from cars in motion could become five times bigger than the market for the cars themselves.
And companies like Google and Facebook have a built-in advantage in that enormous data market.
Otonomo, a 50-person Herzliya, Israel-based startup is working with major vehicle manufacturers — including Daimler and BMW — to help them fight for that gigantic market. Founded in 2015, otonomo is “a cloud-based data exchange platform and enabling car manufacturers, drivers and service providers to be a part of a connected ecosystem. otonomo enables OEMs and fleet owners a new way of making use of the massive amount of car generated data by creating a marketplace that service providers and third party applications can tap into.”
Before getting into that, let’s take a look at how cars produce data and why that data has so much potential value. As Otonomo CEO, Ben Volkow, explained in a September 28 interview, “Vehicles built in the last two years send data to databases owned by the car companies every 30 seconds to five minutes. This includes from 20 to hundreds of data elements such as the vehicle’s speed, acceleration, braking, fuel consumption, battery status, number of passengers, and what is playing on the radio.”
Companies will happily pay for this data if it is formatted in a way that makes it easy for them to analyze. As Volkow said, “If you look at something like OnStar, it produces huge amounts of data but it is expensive to get the data out of the car and into the database. So no one is doing anything with the data. But there are thousands of businesses that want to benefit from car data — including insurance companies, retailers, advertisers, and parking services.”
Insurance companies are already using such data as a way to boost their profits. According to the New York Times, In Arizona, Farmers Insurance will give a 3% discount to customers who “use a smartphone app that tracks driving behavior, including whether the driver is holding a phone or using a hands-free Bluetooth connection.” Mariel Devesa, Farmers’ head of product innovation, told the Times that drivers can “save up to 13% on their insurance based on their habits.“
Vehicle manufacturers are interested in how they could profit from this data. “The car guys see this as a new source of revenue. It’s a very big market and the timing is good. They are worried about what is coming from Silicon Valley. Detroit is partnering with us to enable them to play against Google. So we started approaching the car guys.” he said.