By Adrian C. Ott


The WSJ recently wrote about the role of automobiles as digtal devices.   For the first time, automobile manufacturers will be participating in a major way at this month's CES show with a hall dedicated to advancements in this area.


Microsoft and Ford SYNC (tm)




What is clear is that the automobile is becoming a mobile platform on its own. With the addition of safety and communication devices such as GM Onstar, mobile TV, GPS devices, and internet access, the automobile is transforming from a consumer product to an intelligent mobile platform. 

As a captive audience,  customers must spend time in their car.  Whether they realize it or not, the automakers own a Share of Customer Time (tm); the automakers have a strategic opportunity to capitalize on their existence as a gatekeeper to the customer. 

To capitalize on Share of Customer Time (tm), the auto manufacturers are building their own Customer Behavior Networks (tm) (CBNs) to serve passengers with digital innovations such as GM Onstar.  These provide an opportunity to extend their relationship with the customer and thus monetize the opportunity.  

As the car designer, they have an opportunity to take the role as Leader in this Customer Behavior Network (tm).  Consequently, they have the power to determine what companies play and what companies don't play in their cars.

It is apparent that Microsoft sees this opportunity as they recently signed a deal with Ford to embed Microsoft Auto Software in Ford vehicles named Ford SYNC (tm).  I will write more about Ford SYNC tm in a future post.

Strategically, how will the automakers approach the development of their Customer Behavior Networks (tm) in the future?

1. Who will the auto manufacturers partner with in the technology industry?  Will these relationships become proprietary and exclusive? or will they open their automobiles to serve as a platform to encourage as many players as possible in the Customer Value Network?
2. Will the automakers learn and adapt from the computer hardware and software industry?  How about the communications carriers that enable access without revenue benefit by Google and others?  Will the automakers make the same mistakes?
3. As Leaders of this CVN platform, will the automakers monetize such relationships?   Unlike the communications carriers who historically were limited by regulations, the auto companies do not have such precedents over content and pipes.  For example:
   • Mobile promotions and advertising as the vehicle gets in close proximity to restaurants and gas stations. 
   • How will the revenue from such relationships evolve?  Will they allow Google or Microsoft to take all of the revenue from searches? or will there be a revenue split based on the ability to gain access to their customers? 
   • Will the auto companies create proprietary content?
   • Will communities evolve such as messaging, games or interaction for people traveling in a caravan?
4. How will aftermarket and substitution opportunities emerge?  If the automakers become too greedy or are too proprietary, how will this evolve? What are the control points?  How can the auto industry entice customers to alter their behavior and build digital automobile tasks into their daily habits to gain preference over their competitors?
5. What types of customized business application opportunities emerge?  i.e. Sales force enablement.
6. What types of consumer applications opportunities emerge? e.g. download audio books on demand, up-to-the minute gasoline prices, gaming.
7. What kinds of infrastructure services will be available for security, privacy, SPAM control, and continuity with other mobile devices as one enters and leaves the car?
8. What are the implications for the traditional PC hardware suppliers such as HP, Dell, Apple, and Lenovo?

Just as the digital home presents a myriad of opportunities, the digital auto represents a New Road to Revenue complete with its own set of opportunities...and potholes.


Food for Thought: Is partnering with the auto industry on your strategy radar?


Full Disclosure: Microsoft is a client of Exponential Edge Inc. however all references to Microsoft is our opinion based on external news sources and our general experience with the industry.

copyright 2008, Exponential Edge Inc., All Rights Reserved