In the rapidly evolving networked society, everyone, everything and everywhere will be connected in real time. Smart connected devices, broadband networks and cloud-based services will further drive networking among consumers, enterprises and within society in general. An early beneficiary of this revolution will be the automotive industry. Connected vehicle services delivered via the cloud will realize huge value. 

Mobile broadband is changing how consumers interact with the world around them. Powered by the cloud, the connected car promises to extend this interactive dynamic to drivers and passengers on the road. Consumers will enter an era where vehicles understand who is inside them and how to connect them to what they consider important. 

A connected vehicle cloud can build on today’s mobile network capabilities to deliver dramatically improved quality of experience and create new business opportunities for an entire eco-system around the car. Automotive manufacturers will be able to shift their focus to creating long-term customer relationships in chasing infrequent, ad-hoc opportunities to sell isolated technology solutions. They will also be able to develop new revenue streams from integrated services.

Partners such as dealerships, repair shops and other relevant third-party entities will benefit through drivers’ enhanced ability to interact with vehicle manufacturer’s CRM interfaces and databases. Innovative developers will be attracted by the prospect of access to an open platform on which they can create new apps or extend existing offerings.

Growing The Connected Car Ecosystem

The automotive industry is increasingly global in its outlook and therefore requires a global solution with standards-based infrastructure for connecting vehicles. This helps to ensure lowest possible cost of ownership and that the full potential of the automotive ecosystem is maximized. To gain the trust of application developers, government organizations, businesses, automotive manufacturers and consumers, it also needs to be robust. 

A connected vehicle cloud must be centrally managed but logically distributed. This enables maximized local performance and compliance with local regulatory requirements while satisfying existing and future demands for scalability, security and flexibility. 

M2M Is An Important Part Of The Equation

The connected car ecosystem can only thrive if Machine-to-Machine (M2M) communication accelerates. Creating a profitable business around M2M communication is a challenge, because traditionally, operators haven’t been geared towards delivering large numbers of subscriptions on a very-low-revenue per-connection basis. Nonetheless, M2M remains one of the most promising new growth areas in mobile. 

M2M is the polar opposite of the mobile operator’s current core business model. Rather than delivering universal services to a homogenous, large-scale consumer customer base, M2M involves supporting a wide variety of niche applications for enterprise customers who may have little in common. 

A standardized and managed service delivered over the cloud can lower the threshold for network operators hoping to enter the M2M service market. Recruiting the support of infrastructure partners who can help present network and data assets in a reusable, standardized way can help the operator take full advantage of the opportunity. This “service enablement” approach permits in-house and, critically, external third parties to create new marketable value-added services quickly and efficiently.

 This approach also unlocks a multitude of new revenue streams by creating new opportunities to connect with customers and opening up new business models that will allow for new and profitable relationships with third parties. A service enablement mind-set assumes data services can be charged in any way imaginable – without restriction.

The growth potential for M2M lies in it being able to open up possibilities for operators to charge in different ways and interact with new kinds of customers. As progress in this space accelerates, so too will the connected car ecosystem, driving new business opportunities, benefits and possibilities for all those connected to it. 

Sidebar Case Study: 

Volvo Car Corporation selected Ericsson’s Connected Vehicle Cloud to allow drivers, passengers and the car to connect to new cloud services. Drivers and passengers will be able to access applications for information, navigation, and entertainment from a screen in the car. Content providers will be able to enter into agreements with Volvo and other members of the ecosystem such as Internet radio providers, road authorities, city governments and toll-road operators. 

At the same time, Volvo will be able to open parts of the platform to other players in the automotive ecosystem. This means that truck makers such as Volvo and Scania will be able to offer their customers trucks with embedded connectivity, through which transport companies can run fleet-management systems. 

Ericsson is providing the global cloud solution as a managed service and will also handle the integration with Volvo’s IS/IT environments and in-vehicle systems. The cloud solution will provide a secure connection between each vehicle and all players in the value chain and in the ecosystem.

Similar principles apply across other emerging machine-to-machine (M2M) application areas that will contribute a significant proportion of the 50 billion connections Ericsson is expecting by 2020.