The `cloudy car’ market will be huge

This week in Dallas, the Connected Cars Conference will take place. This is, perhaps, one of the most significant potential markets for cloud services ever imagined, though to those over, say, 30 years old perhaps not the first answer they would come up with when asked to name a big cloud marketplace.

In fact, according to a recent market research report, `Connected Car Market (2013-2018): By Connectivity Technology (LTE, Wi-Fi, 3G, HSPA); Form Factor (Tethered, Embedded, Integrated); Product and Service (OEM and Aftermarket), Application (Navigation, Telematics, Infotainment) and Geography’,  published by MarketsandMarkets, the market could hit $98.42 billion by 2018, with an estimated CAGR of 42.2 percent.

Not all of that will be spent on cloud services of course, but it is a not insignificant chunk of money in which to share. And looking at the main applications areas listed, there is a huge amount of scope for both service providers and applications and service developers to participate fruitfully.

Two of those applications areas are already well known to most drivers already. Navigation is already well-established with GPS, and Infotainment can be expected to be based around extensions to what is already possible with smartphones and radio/CD/iPod/DVD playing in-car entertainment systems.

The special one here, however, is likely to be the telematics area, which opens up the world of IoT (the Internet of Things).  Just imagine what might be possible – and the chances are you will only be scraping the surface of what will appear soon enough. This could range from ensuring that, as you enter a speed limit zone, the car drives at the speed limit, regardless of how heavily the driver leans on the accelerator pedal.

It could also mean that the car reports no only to the driver of the car, but the regular service centre, all the faults that have occurred – and the fault modes that are starting to predict an upcoming failure. It could check your work or personal diary and book the car in for a service – with all relevant parts ordered and supplier stock levels checked – before anything serious happens.

And should some `expensive’ be just about to break it could even locate the nearest garage with appropriate expertise and equipment, and `oblige’ the driver to go there. A message such as “drive as directed or the car in immobilised” should be effective enough.

There is also a possible downside to all this, of course. In a week where it has been suggested that even hands-free mobile phones should be banned from use by drivers because they are distracting, the opportunity for `infotainment systems’ to become a potentially dangerous problem is huge. As a side issue, this does beg an important social question: at what point do people start calling for passengers – especially of the small child variety to be banned because they can distract drivers?

For example, the scope for child pester power will be huge. There you are, happily driving along until but THEY are told you are just going past and example of their favourite burger bar chain or toy shop. There is limitless scope for creating new distractions in this, from mobile Skype services through to endless messages about the shops/restaurants you are passing.

There could be huge security issues to overcome, of course, especially where the services are targeting the information needs of the classic `road warrior’. Here, the will be a need to balance commercial imperatives against commercial sensitivities, with the potential for the car to be a real target for theft that is more potentially far more valuable than to street price of the vehicle.

Though such dangers will need to be watched and managed properly one thing is sure, providing Internet in car has caught up as an emerging trend in the automotive industry. Connectivity in car is increasingly becoming a must-have feature and key driver to the industry. Consumers’ demands and mandates (both - existing and expected) are the prime drivers.

Future generations are expected to be relying on cloud-based backend systems for content, information, and services, turning their cars into a huge data repositories. This is expected to open new avenues of business opportunity for service industries such as insurance and content providers.

The major companies already well into the potential of the cloudy car both manufacturers such as General Motors (U.S.), BMW (Germany), Ford (U.S.), Audi (Germany), and Daimler AG (Germany), plus systems and service businesses such as Harman International (U.S.), TomTom (The Netherlands), Luxoft (Russia), Sierra Wireless (U.S.), Apple (U.S.), AT&T (U.S.), Alcatel Lucent (U.S.), Verizon (U.S.), China Mobile (China), Microsoft (U.S.), QNX Software (U.S.), Delphi Automotive (U.S.), and Intel (U.S.) among others.

The report covers all the major geographies, with North America showing as the largest geography in terms of current connected car unit shipments and market revenue. Asia Pacific, however, has been identified as the fastest growing region, with China leading the way. Europe and ROW also show promise, with Brazil, Germany, and Russia providing impetus to the growth. The report also profiles 26 promising players in the connected car market ecosystem.

The competitive landscape of the market presents a very interesting picture, where a large number of small players have already become a force to reckon with. The market can also be seen as a good example of one of the cloud’s key advantages, large scale collaboration and partnership across the value chain in order to provide end users with an end-to-end service in each application area, as well as the formation of numerous consortia.