As I write this, Mary Barra, CEO of General Motors, has just announced GM’s intention of doubling its annual revenue to $280 billion by 2030 as part of a digital push to be seen more like Tesla. This growth is, in part, due to GM’s transition to electric vehicles and their ability to digitize new in-vehicle systems and create new business models.
The real growth of profitability, safety, and consumer satisfaction will come from the connectivity, automation, and the digitization of vehicles. These advancements will enable GM and other vehicle manufactures, and the complete OEM ecosystem, to offer Software as a Service (SaaS) as a feature of their new vehicles, enhancing the consumer experience and potentially providing over-the-air safety and mobility system updates. From a software standpoint, this will allow vehicles to stay current much longer, similar to how your Smartphone, Smart TV, computer, or other household connected devices currently receive updates. For example, right now, my in-home router network security software says I have 42 devices connected to my home network and most I do not have to worry about when they are updated.
The reason to talk about SaaS is that there is a lot of relevant discussion about Mobility Data and its value, or the connectivity and applications. However, there is not a lot of discussion about how business models must evolve to meet the needs of consumers of connectivity, applications, and data systems. Many confuse SaaS as being a technology when, in actuality, it is a business model. SaaS requires new thinking and a deep understanding of how the industry will utilize the digitization of its assets to develop new business models.
Although automotive manufacturers make large-scale public announcements that capture everyone’s time and attention, there are also other types of companies that are new to the Mobility Industry or have been trusted partners within the industry for decades. These other companies are developing products and solutions for public and private sector customers in the Mobility space. The development of these products and solutions are driven by market needs, including states starting to build Mobility Data platforms. The next step is to develop SaaS models for all surface transportation stakeholders. A secondary driver is the national and international standards development and testing through programs, like the FHWA’s CARMA Program and global standards like SAE J2735. The CARMA Program includes an open-source software platform that enables testing and evaluation of cooperative automation concepts to improve safety and increase infrastructure efficiency. The Program also includes the ability to collaborate with other stakeholders.
As the industry moves forward, it is important to remember that SaaS is a business model and not a technology procurement. Therefore, it is important to remember that SaaS requires long-term planning for budget and staffing in order to address continuous updates, new solutions, new stakeholders, operations and maintenance, and technology refreshes for continuous improvement.
In addition, similar to other technology systems like Smart Homes, Smartphones, and computer systems, SaaS enabling technologies that target vehicle systems need to focus on Open-Source tools and data so that they can be utilized by all surface transportation stakeholders. Moreover, developers of new technologies and systems within the automotive ecosystem must know what they will be working with and that the software will work as expected.
There is a tremendous opportunity and a very bright future for the Mobility industry, and we need to begin the digital journey now through planning, organization development, business model structure, budgeting, and open-source prioritization. If I can help with your connected mobility project and/or application, please reach out to me at firstname.lastname@example.org, or via:
Thank you and I look forward to talking with you more in our next issue.