The connected car from Ford Motors

1. Ford: Car on the Cloud
Prof. Bala Iyer
Twitter: @BalaIyer
09/19/16

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Smart Objects
 Software is eating the world
 Sensory (IP add) layer has emerged
 Company capabilities part of a ecosystem
 Every business is an information business
 Assets trapped within companies
 DIY or developer economy
 Innovative business ideas come from within
and outside
What comes after Smart Products? Bala Iyer and N. Venkatraman

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Connected objects-- Networks
 Deliver value to customer segments
using a portfolio of capabilities some of
which are achieved through links or
dependencies.
 People
 Objects
 Systems
 Organizations

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Networks + Smart Objects 
New value
Products
Customers
Partners
Employees
Information value networks
Context awareness and sense-making

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Vintage Ad // Dr. J For Converse 1977 Ad For Nike
See the Emphasis Change from Products to Connected
Information Platforms

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Creating Awesome Users
 Don't make a better [X], make a better
[user of X].
 Kathy Sierra
 Think about how customers experience
the product or service

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Uncertainty about what the user
wants
Scale Economies Personalization
Experimentation

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With a little help from our friends
 Given market uncertainties, it is
impossible for companies to build every
product that a customer needs.
 Diversity of needs forces companies to
focus on a few features (long tail) or to
source capabilities
 They have to depend on partners
(complementors)

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Think Platforms, not Products

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What is a Platform?
 A product or service should perform at least one
essential function within what can be described as a
“system of use” or solve an essential technological
problem within an industry, and
 It should be easy to connect to or build upon to
expand the system of use as well as to allow new
and even unintended end-uses
[Platform Leaders by Gawer and Cusumano, MIT Sloan Management Review, Winter 2008]

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Platform Definition
 Technology or set of components (or services) that
creates a common foundation,
 That brings together multiple parties beyond a
single firm (“market sides”) for a common purpose
and generates network effects,
 Where the value can increase exponentially
with (a) more users and (b) more “complementary”
products & services built around the platform
Michael Cusumano, Platform Strategy Fundamentals 2014.

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Android
Platform
Users (1 billion, June 2014)
Advertisers
Bid for ads Support development
Search for information
Apps (2.2 MM)
Ad servers
Developers
(150.000)

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Best Platforms
 Open access & interfaces (but not too open).
 Modular architecture (easy to build on,
extend).
 Most compelling complements (usually result
of most vibrant ecosystem).
Michael Cusumano, Platform Strategy Fundamentals 2014.

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Make it easy for third-parties to build on top of
your products – Create an Ecosystem
What about control of the ecosystem?
Uncertainty of user needs resolved through
experimentation

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Case Study
 Ford Connected Car

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First iPhone Announcement –
Jan 9, 2007

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SYNC came to be. Using voice activation and hands free
experience, customers were now able to access their devices,
their phones, and their MP3 players.

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“How do we enable customers to access the applications on their
phone, but do it in a hands free and safe manner?” Taking into
account that not everything is suitable for use in a vehicle, there are a
whole lot of things in the car that customers are going to want to
listen to, news, sports, Internet radio, et cetera. That's
how AppLink came to be.
JULIUS MARCHWICKI , GLOBAL PRODUCT MANAGER
FOR FORD SYNC APPLINK

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We expect an entire group of new developers to create new
and different applications that actually benefit from being in
the car.

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Connected Car
API (Open) gives access to any coder who wants to improve the
car driving and maintenance experience (public) to improve
utilization and reduce churn… but manufacturers restricts access
to mechanical operations (Private) to known partners in order to
enforce licensing and consumer experience quality
standards. Once a partner has signed, any coder who works for
that partner (public) can access the Private API to build new cool
prototypes and innovate on the experience. To gain business
advantage, Ford created a contest on the Open API, and to
sustain it they enabled partners’ engineering teams to build and
evangelize new applications of the API.

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Source: Cars and Computers Overcoming Design Cycle Mismatch, by Howard Baldwin

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At the Mobile World Congress in Barcelona Ford announced that
they open-sourced and contributed the AppLink software to
the GENIVI Alliance

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What are some interesting
Apps on Ford?

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Hackathon: App Challenge
Winner
 Fuelytics -- an app that “helps drivers
visualize fuel consumption and other
trip data seamlessly in real-time.”

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Appstore

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Rebooting the Automobile, MIT Technology Review, Article

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Competing platforms
 GENIVI – Alliance for Linux-based OS
 CarPlay -- Apple
 OAA – Alliance for Android based OS
 QNX -- Blackberry
 Tizen – Open source within Linux foundation
 Windows -- MSFT
 Sprint Velocity
 AT&T Drive
 Verizon Telematics
 Android Auto

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Connected Car Ecosystem

33. 339/24/2016

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Data from Mark Field’s talk
 In a minute
 30 new cars purchased
 7 million miles driven
 125,000 taxis and Ubers on road
 60,000 shared rides
 450,000 bytes of shared data
 Americans spend 101 minutes a week in a car
 The average vehicle is used only 4% of the
time and parked the other 96%.

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Break-out Questions
If you were in-charge of Ford’s Sync strategy:
 What data/services (APIs) would you provide?
 Which vertical would you enter first? Why?
 What would be the revenue model?
 What additional strategic moves would you
recommend?
 What regulations need to be enacted?

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Coring & Tipping
Strategic Option Possible Technology
Actions
Possible Business Actions
CORING
(How to create a new
platform when none
existed before)
• Solve “system” problem
• Facilitate add-ons
• Keep key IP closed or
“open but not open”
•Strong interdependencies
--platform & complements
• Solve “business”
problem
• Create complementor
incentives to innovate
• Protect revenue & profit
• Raise switching or multi-
homing costs
TIPPING
(How to win a
platform battle when
multiple platforms
compete)
• Develop compelling
features
• Absorb & bundle from
adjacent markets
(“envelopment”)
• Complementor
incentives
• Coalitions of also-rans
• Pricing or other
subsidies to attract
users/complementors
Source: Gawer and Cusumano SMR 2008

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Smart Mobility Experiments

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P2P Video
Ride Sharing
Video

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Ridesharing Ecosystem

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Platform moves
• Open sourcing
• Cutting off air supply
• Entrants with network effects
• Creating and defending IP
• Acquisitions
• Creating exclusive links
• Complementor incentives and subsidies
• Interoperate

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Conclusions
 Treat data as an asset
 Make it easy for third-parties to build on top of your products –
Create an Ecosystem
 Uncertainty of user needs resolved through experimentation
 Determine what ecosystems you are really in
 Learn to thrive in dynamic ecosystems
 Influence your ecosystem