The Race To Monetize Vehicle Data Gets More Crowded as BMW Hooks Up With IBM

By Sam Abuelsmid - 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.

Using a third-party platform like IBM, Ericsson or Delphi/Otonomo certainly makes it easier for an automaker to implement. It also allows data from multiple automakers to be aggregated to provide a better pool of data for insights. For car owners that have vehicles from more than one brand, as long as they are on the same platform, their data could also be aggregated. On the other hand, adding an intermediary means another participant in the transaction that will want a slice of the revenue.

Which approach will ultimately prove more lucrative to automakers remains to be seen, but there is also another problem for the service providers. If there is no standard for the interfaces, it complicates life for the app developers with having to support multiple services. In the mobile device space this has proved to be a killer for anyone that wasn’t there first such as Microsoft or Blackberry. Once Apple and Google gobbled up the mobile device platform pie, no one else wanted to support new entries. Between automakers and independent data platform brokers, lack of standards could end up killing the golden goose of data services.

The author is a senior analyst on the Transportation Efficiencies team at Navigant Research and co-host of the Wheel Bearings podcast