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How self-driving cars can change your cloud strategy

Whether you make cars or not, cloud computing and the IoT can transform your revenue model.

Cool tech: that's the hype bubble surrounding self-driving cars right now. These devices (as we must now start to think of road vehicles) are of course just one type of Thing within the IoT. So how could that change the way you think about and monetise the cloud? Even if you're not a car manufacturer...

Extracting value from IoT

Every enterprise of any size is now or soon will become a cloud-based company. The issue then is not whether to use the cloud but how to extract the best value from it. Alongside that cloud subscription comes a wave of bits from the exponential growth of devices: from cars to wall widgets returning environmental data, all that information needs to be stored and analysed if it is to add value.

For manufacturers and resellers of technology such as IoT devices, this looks like an extension of existing business models, as such companies already offer services on the back of hardware and software sales. However, this may not be a familiar business model to companies not involved in the tech industry. Yet, because of today's reliance by all enterprises on technology, exploiting the data for which the company has already paid makes a lot of sense.

Initially of course, a discussion about IoT will be around how the enterprise can amortise the purchase and maintenance costs of devices. But then the question must arise: can we also repackage and sell this data - without compromising its integrity or that of the company? At least one car company is already recognising that it is building a cloud-based service infrastructure not just for its 20,000 employees but also for the millions of users of its products.

Universal benefits

There is no reason why this thinking cannot be extended by many enterprises to its customers, partners and supply chains.

The rewards could include revenue streams from environmental data, from the enterprise's own processes - suppliers would offer lower prices if they could use information from their customers to smooth out the peaks and troughs of their own processes and supply chains - and from services resulting from data returned by the enterprise's own products, in the form of remote management or service requirement prediction.

Challenges abound. CapGemini Consulting reports that they include security and privacy, a lack of standards and the need for significant investments in acquiring new capabilities. Yet examples already exist of companies that have surmounted these.

They include VW's Car-Net service which offers security features, maintenance help and navigation, and subscriptions for smart thermostats, among others. As CapGemini points out: "For many organizations, the ability to capture, package and sell this data offers a potential monetization model. Once this data has been aggregated and anonymized, organizations can choose to sell it raw, package insights from it or monetize it using advertizing [sic]."[1]

So you do not have to be a maker of vehicles to see how the cloud's economics can help the enterprise spin gold from data. Whether you are a car manufacturer or not, the cloud and the IoT can hugely change your cloud strategy, and represent what CapGemini describes as "an unprecedented opportunity for traditional organizations"[2].

Further reading

The rewards of successfully monetising the IoT:

[1] CapGemini Consulting, Monetizing the Internet of Things.

[2] ibid.

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