Telematics and app development: The advantages of open innovation

The open source Linux operating system celebrates its 20th anniversary this year, now powering everything from cell phones and consumer devices to servers and supercomputers. The Linux Foundation, which boasts about 100 corporate and individual members, is a nonprofit technical consortium dedicated to providing a neutral forum for collaboration, as well as promoting, protecting, and advancing Linux as a standardized technical platform for developers in a wide array of industries, including automotive telematics. Streif gave TU a preview of the insights he will share at the 9th annual Telematics Munich conference on November 9-10.

With so much competition among automakers, can technical openness succeed? Is open innovation a particular challenge for this industry?
It is a challenge for this industry because they’re not used to it. But that’s how it started in other industries as well, so they just need to embrace the idea and see how it works. What applies to the automotive industry applies to other industries, too. If you look at the software stack for a device you’ll find that 80 percent of the functionality is shared across many other industries. This is the case for any connected device, [including an] infotainment system. It shares the basics with a phone, the box for a TV system, or other consumer devices. Then another 15 percent of the software stack you share within your particular industry—within your vertical.

So together, 95 percent of the software stack [for a given product or system] is just common technology you need to have. There’s no differentiation for you. It’s the 5 percent on top that’s the differentiation for you as a carmaker or a cell phone maker. So it makes a lot of economic sense to focus your development and spend your dollars on that 5 percent. [Why not] share the development costs of other 95 percent across industries and with companies in your industry? This idea is not new to the auto industry. There are many industry consortiums where fierce competitors collaborate—even on engines—then put their 5 percent on top. What hasn’t been so common is doing it across different industries and doing it in public. (For more on app development, see ‘M2M telematics: Turning the OEM development model on its head’, ‘Why telematics firms need to work with wireless developers’ and ‘Telematics: The demand for in-car apps’.)

What are additional benefits of embracing open innovation in an automotive telematics context?
Car manufacturers will benefit from expertise collected in other industries. This is especially true for Linux, which is used from embedded devices to telecommunications infrastructure to servers. And there are benefits for the consumer, too. They’re looking to bring their own devices into the car. They want connectivity with cell phones and game consoles. They want to uplink to cloud services. This is what the car industry will be embracing in a couple of years. They’ll follow the same model as cell phones. Soon you’ll be able to customize [your car] by downloading applications.

It will also allow car manufacturers to generate new revenue streams—a continuous revenue stream as a second source of income, something that will make them more independent from the ups and downs of car sales—things like subscription concierge services, location-based services, and live TV in vehicles. Many things can be envisioned there. With teen drivers you can monitor where they’re driving, whether they’re within the speed limits—that data is readily available and can be computerized with the right system. Open innovation will also tremendously accelerate delivery and time to market—that’s what consumers and manufacturers are looking for.

Does the added need for safety in a driving environment change the way automotive telematic products should be developed?
Most definitely. People bringing smart phones into the car is a huge safety concern, but it doesn’t concern car manufacturers as much because they haven’t provided [these items]. The consumer chooses to bring them in and use them. When they become an integral part of the vehicle, safety [becomes the responsibility of] the car manufacturer. If [these features] distract the driver too much, the manufacturer becomes liable.

In terms of safety, if the industry says yes to open source and open innovation, building from the ground up will really help to get this right from the get-go. It’s still a learning process, but open innovation helps detect flaws much sooner than with a proprietary system. (For more on driver distraction, see ‘Telematics and driver distraction: Telcos take control’ and ‘Driver distraction: The battle over in-car apps’.)

Will open innovation in attract new manufacturers and developers to the automotive industry?
Definitely. It changes the supply chain for the automotive industry. It is very much a hierarchy currently for OEMs and suppliers. They control a lot of the innovation. The open innovation process will open the floor for others to come in and provide value-added features to the automotive industry. That’s what they’re seeking. The industry is looking for new, innovative models because they feel they’re falling behind what other mobile industries [such as smart phones] are currently doing and providing to customers. Customers are looking for similar features when they get into vehicles.

Jessica Royer Ocken is a regular contributor to TU.

To hear more from Rudolf Streif, join the sector’s other key players at the 9th annual Telematics Munich conference on November 9-10.