Does the telematics industry need system integrators?

In-Stat research forecasts that over 35 million in-vehicle infotainment systems will ship in 2015. Nice new market? Maybe not—unless you are already in it.

While the e-business revolution was built by IT services organizations, they are notably lacking in the auto telematics industry, where long-established partnerships carry more weight than blue-chip IT consulting brands.

To create SYNC, Ford partnered with Microsoft's automotive group, using its engineers to design the initial platform. Together, the two organizations were able to get SYNC from concept to shipped vehicles in less than two years.

Ford then engaged Microsoft consulting services to develop features such as Bluetooth streaming and voice control of an MP3 player, before transitioning to Elektrobit, a developer of embedded technology solutions focused on the automotive and wireless device sectors.

Recommended by Microsoft, Elektrobit added proprietary traffic and information services, and then created AppLink, the SYNC application programming interface, or API.

As it continues to evolve its connected-car products, Ford will prefer to work with telematics-centric partners, according to Doug VanDagens, director, Ford Connected Service Solutions.

Ford's preferred model is to provide APIs and let existing partners integrate applications through them. "Our partners already have the expertise and developed their apps on the different phone platforms,"

VanDagens says. “If they thought they needed help, they'd go get it themselves.”

 

Tough market for newcomers

VanDagens thinks traditional professional service organizations will have a tough time penetrating the telematics market. On the one hand, there's incredible competition for application development talent, with Google, Apple, Facebook, Microsoft et al hungry for new hires.

On the other hand, there are a vast number of startups wanting to partner with Ford and other automakers. "I get so many calls, it's crazy, from people wanting to help me with app development,” he says.

When it comes to the back end, business process and integration consulting that the systems integration companies specialize in, there is even less opportunity at Ford, which has a robust enterprise IT organization.

Ford has already built its own subscriber management and revenue systems for SYNC. "Back-end, highly integrated systems are already in place and integrated into our dealer system and customer-facing sales systems," says VanDagens, who began his career at Accenture.

 

The Linux connection

In fact, the Linux vendors group is one segment that has been able to find new professional services opportunities in automotive telematics. Their business model has always included software customization, testing and maintenance.

(For more from Linux, read TU’s interview with Rudolf Streif, director of embedded solutions for The Linux Foundation, Telematics and app development: The Advantages of Open Innovation.)

Canonical, MontaVista Software, and Wind River are keeping busy indeed, thanks to automotive clients. They say their experience in other sectors can actually help the automotive infotainment industry, because they have many tools, tests and certification processes in place.

"We're absolutely a professional services organization," says Jon Melamut, vice president of operations and products, OEM services, for Canonical.

The company plans to offer an in-vehicle infotainment platform for open-source licensing this fall.

Canonical doesn’t look to write specific device drivers or applications, but prefers to help on things like integration of APIs or management of long-term maintenance. “You may find an OEM that says, ‘I want someone to write me a new UI to integrate the social network,’” says Melamut.

“We're typically not interested, but one of our partners would be. Then, we would integrate that into the base image, working with that large automaker to maintain it for 10 to 12 years."

Wind River, provider of platform technology, software and systems integration services, life cycle support offerings, professional tool suites, dubs itself a system provider, but in many cases, it does act as a software integrator, according to Franz Walkembach, senior product manager, auto solutions.

Its customers are Tier 1s including Delphi, Magneti Marelli and Hughes Telematics. "We are doing work on every component of the infotainment system," Walkembach says, noting that it does not get involved with systems integration into the car itself.

"For that, you need to have the final hardware and drive around with the car. We need the tier 1 or OEM to do that."

MontaVista typically enters into professional services engagements of one year to 18 months, and these projects may involve 50 to 100 engineers. "Professional services are especially important in this market," says Dan Cauchy, vice president of marketing for MontaVista Software.

In the automotive sector, MontaVista's clients are usually tier 1s that put the hardware together and use MontaVista's embedded Linux platform as the starting point. "These projects require a great deal of customization for features and the user interface," Cauchy notes.

Cauchy thinks his company's years of experience in other sectors are an advantage in auto telematics. MontaVista has a body of intellectual property in the form of test cases, and it operates board farms where software components can be tested.

He uses the company's experience in other sectors as a selling point: "One of the first markets we entered was the telecom space, which has very stringent requirements for quality. Telecoms can't afford to go down. We see the same stringent quality requirements in automotive."

 

Cracking the market

Companies that do want to move into automotive telematics should give harried executives at OEMs a rest and look further down the value chain.

Says Cauchy, "Most tier 1s have their own sets of ISVs and third-party providers, for example, for Bluetooth stacks, the HMI, GPS and maps. We're still seeing the tier 1s playing the role of making sure all the parties come together and it runs on the hardware."

But Canonical's Melamut sees more opportunity for traditional professional services companies to play a role. "I think there is a high likelihood they will move into these markets as well, as the opportunity grows,” he suggests.

“To a certain extent, organizations like GENIVI that are trying to create standards and more open platforms will make it easier for consultants to move in. Then, they will be able to leverage skills across industries."

Susan Kuchinskas is a regular contributor to TU.

For more all the latest telematics trends, join the sector’s other key players at Telematics Munich 2011 on November 9-10.

Read TU’s report Smart Vehicle Technology: The Future of Insurance Telematics for exclusive business insights into the global UBI market.
 


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