The automotive industry is on the cusp of immense change. Products are becoming more software-based, customers have new expectations on the buying and owning process and are placing a high-value on companies that move quickly into sustainable and mobility-enabling products and services. This requires a significant shift in how automakers design, develop and manufacture products and services, how they engage with customers and channels, and how they work with governments who are building or need to build new infrastructure. The challenge has always been how do they move quickly while continuing to maintain a viable business model to make those investments.
Far reaching implications
Cloud computing provides the roadway for the automotive industry to move with speed and build a healthy business model for the future. As OEMs begin to rearchitect the design and manufacturing process and overall customer experience, the ability to store and analyse data that includes evaluation of vehicle engineering and safety is paramount. The cloud reduces the cost of storage and also accelerates the speed of designing and manufacturing vehicles. As most of the transportation industry needs coverage worldwide, scaling is a key factor in their architecture that cloud adoption can add to an exponential level. Ultimately more data storage at lower cost and faster access to ever-changing technology tools will speed up development and create more differentiated products and services.
With data at the core of how autonomous vehicles come to life, the cloud is the only way to keep up with new competitors in the space and truly act as a digital native. The volume of data requires the cloud model to help constantly reassess and redevelop tools to support the complexity of software required to operate the vehicles and ensure they are safe.
Additionally, data will be used in new ways to sell services, whether they are safety add-ons or experiences within the vehicle and beyond. At a larger scale, traffic pattern data will not only inform urban mobility, but help with planning across cities and towns in all aspects of the services they provide. Data from the various products and services across the automotive industry, public transportation and mobility technology companies will be the source of how we define our future cities, towns, parks, and farmlands. With the complexity and cross-industry intersections of services, the cloud is an imperative.
Moving to the cloud has become a catchphrase that often is viewed as a ‘lift and shift’ of current technology. But, to gain the true benefits, it requires a change in engineering, ways of working and a mindset shift on how to operate the business. It provides the opportunity to have a technology landscape that can move quickly with new partners and focuses more on the development of a defined DevOps capability rather than infrastructure management.
Implementing the cloud requires the entire organisation to shift its frame on how the company operates. It doesn’t need to happen on day one, but the journey needs clear definition and alignment across all disciplines.
From our experiences working with clients cross-industry at Publicis Sapient, it is critical to develop guiding principles across three areas: delivery, process and tools and technology
For the entire automotive and mobility industry to move in the direction of their stated electric vehicle, software-focused and autonomous goals for the next decade, the journey to the cloud is the only option
For delivery, it is important to understand what we are solving for and focus on the best solution. Success is how technically complete the implementation reduces cycle time, eliminates fear of deployment, and removes the uncertainty of deployment results.
In terms of process, consistency in our support operations and timely, transparent, and relevant communications are key. How we can improve our strategies of how we monitor systems and learn from mistakes to ensure said mistakes are never repeated under pressure is also vital.
And for tools and technology, focusing on automation and productivity engineering should entail test completeness and focus on time improvements for deployments. It also is very important to build for cloud native and strive for declarative configurations.
The benefits we’ve seen realised are along the lines of a 50% to 80% reduction in deploy times for critical application components, while infrastructure cost has reduced by 30%. Standardisation of APIs serving mobile and web traffic, and complete de-coupling of the web has increased independence across teams and enabled 99.99% availability, along with less than ten minutes recovery time.
Misconceptions
Despite all the reasons why the cloud is the future, there still are some misconceptions about moving to the cloud. These beliefs can be an obstacle to understanding the business, operational, and economic benefits of cloud and ensuring it is implemented with the right mindset. Companies and executives who effectively counteract these myths are the ones that will derive the most significant rewards from their move to the cloud.
Cloud is less secure and can get easily hacked
Security is first and foremost, so this is a valid concern for clients. Traditionally, automotive manufacturers have secured their on-premises infrastructure, building experience and trust in their security. But over the past few years, Chief Security Officers across the sector have acknowledged that on-premise data centres can be hacked remotely and that it is manual processes and insider threats that pose a significant risk.
Many automakers have not yet built up the experience to design cloud foundations in a secure fashion. Cloud providers like Amazon Web Services (AWS), Microsoft, and Google Cloud invest billions of dollars every year to ensure that their solutions are safe and offer top-notch security features, including data encryption and masking.
What ultimately drives trust in security depends on gathering the relevant experience in implementing security features on their cloud foundation. Also, companies that define the correct policies, adopt a secure DevSecOps operating model, and train or hire the right talent can achieve safer operations in their cloud environments than on-premises.
In summary, security is about growing experiences to set up cloud environments in a secure way and collaborating with cloud providers to continuously advance security measures considering the ever-evolving threats.
The location of the data is unknown
Controlling data access is critical for protecting people’s data and privacy and maintaining customer trust along with ensuring competitors do not have access to new product innovations. Ownership of data, data residency and data sovereignty are driving conversations amongst C-suite executives.
Many conversations around data residency are sparked by people concerned as private citizens, but it’s a very different game if it is a dealership, a supplier or a partner who can manage data residency in the cloud. Leading cloud providers can meet data residency requirements. Dealers, suppliers, partners can designate in which data centre region their business-critical data and apps are stored and how and when it can be transferred.
Cloud is extremely expensive
Cloud expenses are an urban myth. Cloud is the catalyst for a broader business transformation, and the benefits can outweigh any expenditure in technology. However, to see savings, there are two things that automotive companies need to do.
First, they need to set up a new cost management capability. They are moving from a fixed cost—including depreciation—into a more variable cost model, supported by new pricing models from cloud providers. Automotive companies must create the brain within the organisation to understand how consumption drives cost and how changes in demand can result in a better cost level.
Secondly, they need to decommission old infrastructure to ‘bank’ the actual savings. That’s still a challenging activity for many, as often they end up with a data centre that needs to be decommissioned while there’s still some applications in there.
The cloud market is established and requires a one-off transition or strategy
The cloud providers market is developing rapidly in terms of the number of players and what they offer. This requires an ongoing capability to scan the market and update the cloud infrastructure strategy regularly.
Implementing the cloud requires the entire organisation to shift its frame on how the company operates. It doesn’t need to happen on day one, but the journey needs clear definition and alignment across all disciplines
Provider examples worldwide include three leading providers: AWS, Google and Azure, but other credible providers exist including Alibaba, Oracle and Salesforce, some of which lead in specific regions. In the services arena, cloud providers are growing more active in offering additional and sector-specific services or creating ecosystems with independent software vendors. This results in a dynamic vendor marketplace, which can provide significant opportunities to progress the transformation journey.
Next steps
Business ideas do not need to be constrained by technology anymore, as an enterprise moves to the cloud, an enormous amount of add-ons and accelerators are added that can be leveraged to solve any complex business problem. Experimentation which is a key factor in any discovery or evolution has now become so easy with the advent of tools and technologies in the cloud.
The cloud is not infrastructure-at-play but rather the catalyst for end-to-end transformation without compromising safety and security. In addition, the transformation to a cloud-native company offers the benefit of significantly lower operating costs and new revenue sources for automotive companies. For the entire automotive and mobility industry to move in the direction of their stated electric vehicle, software-focused and autonomous goals for the next decade, the journey to the cloud is the only option.
Alyssa Altman is Senior Vice President, Transportation & Mobility Lead at Publicis Sapient
