On the road and up in the Cloud, part I

On the road and up in the Cloud, part I

It’s no longer new or surprising that the connected automobile has become a treasure trove of information on how people live, where they go, how they drive and what they enjoy. But there is one specific innovation of recent years that has enabled all of that information to actually become useful: The ever-more-powerful Cloud.

“The Cloud collects large amounts of data about what’s going on in that vehicle, and that can be as diverse as sensor data from the engine to location data to consumption data about entertainment used in the vehicle,” says Alec Saunders, vice president, Cloud business, QNX Software Systems. “A lot of data gets generated. One estimate that I saw is that a vehicle could generate as much as 127 megabytes of data per day.”

Generated, however, is not the same as captured or put to any sort of use.

“I don’t think you could have even done what we’re doing right now even 18 months ago because the technology didn’t exist,” Saunders adds. “The combination of advanced Cloud technologies that have the ability to gather large quantities of data, the falling prices of electronics, falling prices of connectivity, as well as sophistication around how that connectivity gets used are creating this perfect storm of opportunity.”

Usage-based insurance becomes viable for smaller players

Probably the most buzzed-about opportunity is the potential for insurance companies to use vehicle data to assess driver risk and to tailor premiums to specific drivers and cars. Here, the Cloud comes into play as a cheap and easily scalable data storage facility for insurance companies. But it also makes it much easier for risk-management consultancies like Towers Watson to access the data, scrub it of redundancies and enrich it with other data sets, which results in ever-more-accurate risk assessments for Towers Watson’s clients.

“What we’re doing is running a program for many different insurers, and they each put in a few thousand customers,” says Tony Lovick, a telematics pricing actuary at Towers Watson. “Then, we pull the data from all of those customers and produce an analysis of everything. That gives us a much more powerful score [for drivers] than if we were doing it individually for any one company. … Doing that, we’ve achieved some very powerful scores. We’ve basically produced a way for insurers to compete against Progressive, who is obviously leading the market in the U.S.”

Progressive is one of the largest American auto insurance firms and the sector’s undisputed leader when it comes to usage-based insurance (UBI). Earlier this year, the company boasted on its website that it had followed its customers for 10 billion miles driven, collecting 110 terabytes of data about some 2 million of its motorists.

Diagnosing a car while it’s in motion

Yet there are a number of other industries eager to tap the data now that it is becoming available with the Cloud, says David Jumpa, chief revenue officer at Airbiquity, a Seattle-based company that provides intermediary software between the car and the Cloud. “I think you’re going to start getting not only the insurance companies, but other industries that are involved in what your car or that driver uses – from fuel providers to infotainment providers – integrating more services to the driver and integrating applications and entertainment services between the home, the vehicle and the gas station,” he says.

Saunders agrees. “Once you start to collect that data, you can do really interesting things with it,” he says. “One of the observations I made to an OEM was: ‘Hey, you’ve got all that rotational data and shock-absorber data, and your cars are on every single street in every part of the world. You know where all of the potholes are! You have data that may be immensely valuable to, say, municipal governments, because you know this stuff.’”

Volvo draws raves for Cloud-based Sensus

Not surprisingly, car OEMs are among those interested, albeit cautiously. Volvo Car Corporation, for instance, drew rave reviews at the 2014 International Consumer Electronics Show in Las Vegas in January for its Cloud-based Sensus Connect infotainment and navigation system, which uses an Ericsson Cloud platform and enables remote content updates over the air.

“It is funny, I look at some of the things that Volvo is doing, with Ericsson’s help, that are essentially quite boring stuff, customer relationship management, vehicle relationship management, enhancing safety,” says Roger Lanctot, associate director, automotive multimedia & communications service, Strategy Analytics. “But these are actually the cutting-edge applications, and Volvo is putting its corporate reputation on the line to really get out on the bleeding edge of technology execution to connect customers – to their cars, to their dealers and to their car companies in a more effective way.

"If a car is going to be connected, I would expect that you would let me know before systems fail, not after they failed or after I had a crash. The whole objective is to avoid collisions. So these are the kinds of solutions that Ericsson is enabling with connectivity and Cloud-based services to the car.”

The Cloud thickens

Of course, Volvo isn’t the only carmaker moving in this direction. Tesla Motors is already able to push down software updates to the Model S. And Nissan’s new Altima sedan and Rogue compact SUV offer an entertainment delivery solution that “dynamically delivers and updates entertainment content directly into the vehicle from the Cloud without necessitating any direct involvement from the users to do things, like update their system, download apps, and things like that,” says Scott Frank, vice president of marketing at Airbiquity.

“Right now, I drive a Ford with a SYNC system and, even though it’s a 2013 model, I don’t have that capability,” he says. “If I have to update the system, I’ve got to go download it off a computer, put it on a thumb drive and stick it in a USB port in my car glove box. … The drivers of the Altima and the Rogue, in addition to future Nissan models, don’t have to go through that. It’s just all happening automatically.”

(Return next week for the second part of the series.)

Steve Friess is a regular contributor to Telematics Update.

For all the latest telematics trends, check out Advanced Automotive Safety USA 2014 on July 8-9 in Novi, Michigan, Insurance Telematics USA 2014 on Sept. 3-4 in Chicago, Telematics Japan 2014 in October in Tokyo, Telematics Munich 2014 on Nov. 10-11 in Munich, Germany, and The Open Mobile Summit on Nov. 10-11 in San Francisco. 

For exclusive telematics business analysis and insight, check out TU’s reports: Insurance Telematics Report 2014Connected Fleet Report 2014The Automotive HMI Report 2013 and Telematics Connectivity Strategies Report 2013.  

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