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Ford drives IoT with its connected car strategy

Ford gave a really insightful presentation to investors on September 14. When I say “insightful,” I really mean it because it gave an in-depth dive into its future connected car strategy, covering everything from electric vehicles to autonomous driving to future mobility to the IoT-relevant subject of “big data.” Ford is reinventing itself and its business models, which is a brave move from such an old-school company. However if it manages to pull it off, Ford will be unrecognizable in 10 years.

In terms of connected car and IoT, here are my top 10 takeaways from the investor day:

  1. Traditional revenue for automotive OEMs is $2.3 trillion (i.e., sales of vehicles), while the rest of the transportation vertical represents $5.4 trillion (including mass transit, taxis, car sharing and insurance to name a few). Ford has 0% of that right now, and it is planning to be a major player across the value chain, including developing its own shared usage services and even semi-mass transit vehicles.
  2. Ford has mapped out the connected ecosystem as including telematics, payment systems (for example, using the car as a payment device), driver management, enterprise data solutions, vehicle management and car sharing. Today Ford does very little in that ecosystem, but now that most of its vehicles have cellular connectivity, Ford wants to develop services that penetrate the wider ecosystem.
  3. Ford is reinventing itself as a platform company, whether that’s a cloud technology platform (which includes FinTech, autonomy, data management and connectivity as the four main pillars) or a physical vehicle platform on which it can more rapidly innovate new vehicle types and use cases.
  4. Its four main areas of innovation are “user experience,” “business models,” “data and analytics,” and “an agile mergers and acquisitions team.” As an example of the latter, Ford made a $182 million investment in Pivotal, a cloud based tech company, earlier this year.
  5. It may have coined two new terms that we will hear a lot more about: transportation as a service, or TaaS, (being pioneered by Uber, but let’s not forget mass transit too), and vehicle management as a service, or VMaaS, which is where the entire vehicle lifecycle is offered as a package including acquisition, financing, insurance, maintenance, upgrading and ultimately disposal. These will rely heavily on cloud infrastructure.
  6. Ford had a great slide in its presentation which said that every minute of every day in the U.S. there are 125,000 taxis and ride-sharing cars on the road, there are 60,000 shared rides taking place, and there are 450,000 bytes of data being generated by every car (most of which doesn’t get transmitted across cellular, luckily).
  7. Ford’s new independent entity, Greenfield Labs, is focusing on new consumer experiences in shared transportation and smart cities by drawing on Ford’s technologies and expertise combined with the much wider tech ecosystem.
  8. The company is investing heavily in what will be one of the world’s largest “data and analytics platforms.” It stated that today’s car has 1,500 individual data elements, sometimes sent at a rate of 50 times per second, and that 25 GB of data is created by a car during one hour of regular driving. Most of that isn’t presently being transmitted, but when it does, it’s easy to see why Ford has to create a massive data center to store and analyze it.
  9. On top of regular vehicle data, Ford also have access to consumer data, corporate fleet data, logistics data including freight, haulage and courier data, and environmental data such as the weather across the globe, so making sense of all this data — and monetizing it — is a big focus are for Ford.
  10. Ford wants to be a major and integral part of tomorrow’s smart cities by delivering consumer engagement solutions based on actionable data, ride-sharing platforms beyond today’s Uber, telematics, business-to-business services and a new wave of commerce that could very well be vehicle-oriented.

Whether or not you believe in Ford’s connected car and IoT mission, you have to admit it’s bold and it will be interesting to watch. Ford is not lying down, and it won’t let General Motors’ Lyft ride-sharing partnership get into the driving seat without a fight.

All IoT Agenda network contributors are responsible for the content and accuracy of their posts. Opinions are of the writers and do not necessarily convey the thoughts of IoT Agenda.

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