Cloud computing has had a profound effect on many industries, including the automotive business, which is rapidly moving toward a world in which cars are connected to each other and to the world around them. As I wrote in the November 2, 2015 issue of Forbes magazine, Ford’s CEO Mark Fields is channeling Henry Ford to solve the world’s mobility problems. I sat down recently with Don Butler, executive director of Connected Vehicles and Services at Ford Motor Co., to find out how Big Data will change the way we interact with our cars, and what’s in it for Ford.
Q: What’s Ford’s opportunity from cloud computing?
A: The best thing to do is to look at how the automotive industry has transitioned over the last few decades. We started in the 1970s with engine controls and microprocessors that were around regulating fuel delivery, and things like oxygen sensors for fuel economy because we couldn’t use vacuum-based carburetors any more. We had to be more precise. Since then the vehicle has become more and more software-based. We’ve gone from being about 99% hardware, to probably 60% hardware, 40% software.
The other thing that’s emerging more recently is that not only do we have that software intensiveness onboard, but we now have the impact of connecting to things outside the vehicle…The car is becoming part of this ubiquitous Internet of Things. The car is connecting to the outside world.
So when we think about the cloud, my shorthand definition is off-board computing and storage, not something that’s resident in the vehicle. The benefit of that is you’ve got the ability, with the customer’s permission, to take that data, store it, analyze it, look at it, and figure out what value we can derive from it – (how to) more easily repair that vehicle, and analyze how people are using that vehicle, and all the things associated with that other buzzword, Big Data and analytics. That’s the storage piece.
The other advantage is that computing piece. You now have the ability through the cloud to connect with the vehicle to get the state of the vehicle on your smart phone. You can remotely interact with the vehicle. You have the ability to deliver services and experiences that extend outside the vehicle because you’ve got that remote computing and connecting capability.
The other benefit you get with that computing power is that you no longer are stuck with the vehicle as it leaves the factory. You now have the ability to both provide services and experiences that can get better over time through interaction with that remote app because you can change the cloud, you can update the cloud, you can deliver more services through the cloud, and in addition, leveraging the cloud to send updates into the vehicle itself.
So with our Sync3 system, for instance, through a WiFi connection someone might have in their home, or connecting to a hot spot out of McDonalds’s, we’ve now got the ability to update the Sync system in the vehicle remotely with software that we download from the cloud. So there’s all kinds of flexibility and capability that you get when you move to off-board computing and storage capabilities.
That’s the big picture. That’s really what we see and the things we’re beginning to take advantage of when we talk about the cloud. I would say we are in the early stages of really taking advantage of all the capability that we see. Most industries have been focused on the storage aspect of the cloud. I think the thing we’re seeing going forward is more consumer-based, more real-time interaction, real-time services, real-time experiences, contextualized experiences.
Q: Walk me through what might be possible in 5 years, as you further leverage the cloud?
Sure – if you think about the user experience, and that’s really the way we look at it. After all, it’s easy to get enamored by the technology and what’s possible, but if it doesn’t translate into a meaningful experience for users, then it’s not really going to be worth much of anything.
Increasingly we need to look at our business as being more than just selling and leasing vehicles and parts. We need to view ourselves as a mobility services company. Along those lines, we want to be a more integrated part of the total relationship that customers have with the transportation business and so five years down the road, the vast majority of people are still going to be leasing or buying a vehicle. A little further than that we have to think about maybe some different modalities. But I think we can envision scenarious in which you are prompted in your smart phone, “Good morning. Based on the weather and based on traffic conditions, I’m estimating you’ll need to leave at 6:35 this morning, as opposed to your normal 7 o’clock, and by the way, here’s the route we would recommend that you take. Shall I order your favorite latte on the way?” And as you are arriving at your place of business, prompting for the appointment that you have coming up, and “Shall I have those materials prepared on your desktop when you arrive so you can be ready for the meeting?” What we’re really looking at is what we call context- based solutions. Having that – and all of this has to be based on the informed consent of our customers – the ability to connect with your calendar, the ability to connect with your GPS and the route you normally take. The ability to accumulate that information to form some knowledge of you in order to be more precise and contextual in terms of experiences and services we deliver.
All that information will be resident in the cloud right? That’s the way we can contextualize those experiences and that’s the way we can become more a part of our customers’ lives than just when I buy the vehicle and when I go in and service the vehicle. Ford’s not really a part of my life. So just as Facebook has revolutionized what it means to connect with each other and Amazon has revolutionized what it means to shop and consume, and Google has definitely revolutionized what it means to gather information, we’re looking in the same way to revolutionize the mobility experiences of our customers. And to be that trusted guide that helps them accomplish the things they want to accomplish along their journey.
Q: With all that is possible, how do you handle privacy?
It starts with a well articulated internal philosophy, that gets translated into policy: the data we gather from the vehicle is the customer’s data. So there’s no question about ownership. It’s the customer’s data. We view ourselves as the trusted stewards of that data.
Because all those really wonderful customer experience scenarios that I described – none of that is possible if you don’t have the foundation of trust. That foundation of trust has to be built on security and privacy. We are even looking at how do we give customers a dashboard to literally see what info are they sharing, both personally as well as from their vehicle, and what is that information being used for. Because we think if customers have that level and degree of control, that will engender trust.
The other thing we have to do is to provide value commensurate with the information they share. Not only in simple things like what’s the fuel level in my vehicle and I’m able to check it in my mobile, but if you are willing to share information on how you’re using the vehicle, then we can provide tips to help you.
Q: Do you have to give up a lot to get the full benefit?
We have to frame for the customer – what does giving up my data mean? If giving up my data means I give it to you and you share it with whoever you want, then certainly there’s going to be outright rejection for that kind of model.
We inform the customer of the purpose for collecting the data – and how it will be used. That to me is the key. A simple example – for our 911 assist service within Sync. — the first time you pair a smartphone, we ask, “Would you like to activate 911 assist?” which means if you’re in an accident, we use your cellphone and call 911. We have to provide the location of that vehicle in order to provide assistance to 911 emergency responders. So I’m not just asking for the ability to give your location. Here’s why I will need it and here’s how I will use it. It goes back to the idea that we believe consumers will share info that is commensurate with the value that they gain.
We are being very, very careful. We are not going to be the company that’s flashing advertisements in your Sync display as you drive by a particular location. There are a lot of reasons why that’s not really a good idea. Number one is driver distraction.
And number two, is probably the annoyance factor. And so having said that, are there more subtle ways we might do that going forward? Potentially, so maybe, the scenario I mentioned before was more of a suggestion. “We see that this is a place that you frequent. Would you like to stop?” Then you are completely in control. As opposed to, “Hey, get 50% off right now!”
If we want to realize that long term enduring relationship with customers that we’re striving for, we believe it has to be built on this foundation of trust. And part of that trust is customers understanding and knowing that we have their best interests at heart. It’s not about how can I make more money from you, it’s about how can I give you a better and better experience. Because for us, the value will come from them connecting with us, and then relating Ford to their mobility experience as opposed to us trying to figure out how do we maximize the value from that customer. It’s more about how do we make the world better for that customer?
Q: When does it fall to the bottom line for Ford?
First, There’s value in just enhancing the attractiveness of our existing products. The ability to remotely connect with a vehicle, start it, check its condition. We want to make our vehicles more attractive. We will still derive the vast amount of our value from selling and leasing automobiles and parts.
The second part of the value equation stems from if we are truly able to deliver these compelling experiences which leads to that enduring relationship then customer loyalty will grow, because if customers trust that relationship, then they’re going to want to stay in that relationship.
We can also potentially share revenue with our partners. Let me give you a specific example. If we can help the customer find a parking space, that helps the customer. Maybe that parking provider, knowing there’s a way to manage their inventory, maybe there is a way to share in the value that they derive from having better inventory management. Those are the things we’re exploring at the edges, in terms of how can we leverage what we’re doing certainly in a non-intrusive way for the customer, delivering value for the customer, making sure the customer is always in charge, but figuring out how can we as part of that total mobility solution, also participate in that value that might be created.
Q: The automobile then is this trove of really valuable data, and there are a lot of non-automotive companies who really want to get their hands on that. How do you manage that? Are you worried about them encroaching on your business?
A: We are being very protective of that vehicle data. And again the fact that we view ourselves as the trusted steward on behalf of the customer. It’s very fair to say that we can’t foresee today all the possible uses of data that might come off the vehicle, and it’s also fair to say that because of that we don’t want to put ourselves in a position where we become disadvantaged, and unable either to create value or participate in the value that is being created from that data. So it’s fair to say we’re being very circumspect with what we provide access to for other partners and other entities because we want to be in control of our own destiny. And the primary motivation is being the trusted steward of our customers’ information.
This article was written by Joann Muller from Forbes and was legally licensed through the NewsCred publisher network.