Implications of the Data Exchange on the Connected Car Business Models
The key differentiator for IoT is the data collected and the use of this data to improve business operations, products, support, and customer experience. Many companies have already connected their equipment or assets and begun collecting data. The challenge is how to leverage the data to realize the true benefits of IoT, not only for the companies’ specific uses, but also to extend the information to auxiliary businesses. There will be two key components to evolving IoT to its true potential. In this white paper, discover the two key components and how a data exchange can be used to realize both components.
Implications of the
Data Exchange on
the Connected Car
An InterDigital White Paper
By Nadine Manjaro,
InterDigital IoT Solutions
www.InterDigital.com | 2
The key differentiator for Internet of Things (IoT) is the data collected and the use of this data to improve
business operations, products, support, and customer experience. Many companies have already connected
their equipment or assets and begun collecting data. The challenge is how to leverage the data to realize
the true benefits of IoT, not only for the companies? specific uses, but also to extend the information to
auxiliary businesses. There will be two key components to evolving IoT to its true potential. The first is the
analysis and interpretation of historical and real-time data that will trigger effective actions and improve
business operations. The second is exposing collected data to developers to create new capabilities not yet
envisioned. The new solutions or applications can be sold in a marketplace enabled by the data exchange. A
data exchange can be used to realize both components.
Today, there are hundreds of IoT platforms on the market and many different data analytics and storage
options. However, there are currently no centralized means of aggregating data from disparate data sources
and making this data available to third-party companies for analytics. Hence, the data collected is typically
not used to its full potential. A data exchange enables sharing of data across business units within an
enterprise and across different industries that ultimately create these new possibilities.
A data exchange links disparate data sources and creates new business models around data access and
utilization. Providers can open their data for free use or charge for premium data access. The architecture
in turn is similar to an IP exchange where data is aggregated at a few central hubs via an orchestration
platform, which then presents anonymized data in a common standard format to third-party developers.
Companies can continue to use their own data more efficiently for internal purposes while also making
anonymized data available for external use.
Companies like General Motors (GM) have collected vast amounts of data from connected cars, so how can
they further grow their businesses and capitalize on this data? To start, they are turning to companies with
extensive backgrounds in data analysis. These companies are staffed with actuaries and data scientists, and
their core business is to make sense of vast pools of data. By collaborating with third-party companies, GM
and other automotive manufacturers free themselves to focus on their own core business, making high-
performance, safe vehicles, while their partners develop further business insights from the vast data collected.
Implications of the Data Exchange on the
Connected Car Business Models
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Role of Automotive Original Equipment Manufacturers (OEMs):
In 2015, the US auto market alone accounted for 17.5 million vehicles, or approximately 20% of global sales1.
According to McKinsey and other sources, connected cars generate an average of 25GB of data per hour.
This means that the 7 million OnStar customers generate up to 175 million GB of data every hour. If all of
these vehicles were connected, just imagine the amount of data generated! This does not include the existing
after-market pool of vehicles in the US and elsewhere. GM is looking to expand its $350 million connected car
profits by enabling access to its vast amount of data2. The company signed a data sharing agreement with
Verisk in September 2015 to enable third-party access to its data3. Verisk is an auto insurance intermediary
specializing in risk management, with strong capabilities in data analysis.
Similarly, Toyota announced that all vehicles sold in the US and Japan markets will be equipped with wireless
modules (DCM) starting in 2017, and will connect to Toyota?s big data center4. Finally, Ford is adding LTE
modules to its vehicles while Volvo features over 200,000 connected cars tied to its cloud data depository.
This makes the overall connected car industry an enormous data source already ripe for a data exchange.
Summary of Major Automotive Companies? Connected Car Activities:
Auto OEM Connected Product
Big Data Strategy Notes
GM OnStar Reported ->23,000,000
7 million paid customers
Signed agreement with
Verisk in 2015
Verisk exchange is
expected to have 1.3
million GM cars by
end of 2016
Ford Sync, My Ford Touch Plan to connect
Ford has an opt-in model for
collecting data from connected
cars; announced partnership
with IBM for data analytics
Expect to add
another 10 million
by 2020 globally
Tesla Motors 64,000 Started with a connected
Plan to grow to
Volvo Sensus 200,000 Volvo connected cloud Sensus, Volvo?s in-car
Toyota Toyota Connected
5,000 Formed partnership with
Microsoft for data analytics. Plan
for global data centers to collect
DCM data; partner with KDDI for
connected car platform
Mercedes mBrace Using Pivotal Cloud
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Role of Insurance Companies
The insurance industry will be seeking opportunities and new revenue streams as more and more auto
OEMs equip their vehicles with connectivity and autonomous driving capabilities. Self-driving vehicles will
reduce the probability of accidents, which will in turn change the insurance premium models used today.
Autonomous vehicles such as those announced by Lyft, GM, Ford, Google and others will significantly change
the insurance industry as we know it today. New questions such as liability in self-driving vehicle collisions
are being debated by regulators and policy makers across the globe. It is expected that self-driving cars
will shift accident liability from driver to the auto Original Equipment Manufacturer (OEM), which will thus
revolutionize the insurance industry.
Today, several large and small insurance providers offer Usage-Based Insurance (UBI) solutions. These
include Progressive?s Snapshot market leader, State Farm?s Drive Safe & Save, and Allstate Drivewise. Most
of these solutions leverage onboard diagnostic port (OBD) devices and smartphones to collect driving
behavior data. Newer vehicles will be factory-equipped with wireless modules to capture both driver
behavior and data on the entire vehicle lifecycle. For example, Toyota announced in January 2016 that it will
begin installing wireless modules in most 2017 vehicles sold in the US and Japan5. Data from these modules
will be collected in a new centralized data warehouse for analysis and predictive modeling. These solutions
will provide insurance companies with actual driving data versus statistical averages, credit score and other
less-relevant factors used in the past to determine insurance premiums. Insurance companies will now
be providers of personalized, specific data to third-party intermediaries while being subjected to privacy
guidelines as mandated by each state.
Role of Intermediaries
Intermediaries such as Verisk will act as master aggregators, interpreters and presenters of data. They will
work with platform companies to create the ecosystem and architecture to collect data from disparate
systems and aggregate, analyze, and then interpret that data. They will become data brokers to companies
collecting large volumes of data such as GM, alarm/security companies, manufacturers, and logistics
companies. Then they can also market, promote and capitalize on both raw and premium data (such as
those where various analytic algorithms have been applied).
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Key features of a
? Scalable, flexible architecture
? Open source
(system of systems)
? Data extraction
? Data aggregation
? Data model exchange
between different domains
? Data orchestration from
? Third-party platform licensing
to simplify patent sharing
? Identity and access
? Marketing automation
(simplify adding solutions to
the marketplace and billing)
? E-commerce capabilities
IoT data exchange can follow an architecture similar to that used by
European Radiological Data Exchange Platform (EURDEP), where over
thirty-eight European countries continuously share radiological data
in near real-time. The data exchange would act as a peering point for
data providers. Data providers can collect information from their own
networks and share it with the exchange in real-time or as needed.
A data orchestration platform would connect the different data
sources and enable seamless data exchange similar to EURDEP. The
orchestration platform would include APIs or adaptors to enable easy
integration of third-party systems, Enterprise Resource Planning (ERPs)
and other enterprise systems. In the figure shown, each node represents
different enterprise systems or IoT platforms. Data sources can be
databases, the web, or other data repositories. The exchange is the
suite of adaptors needed to integrate the different nodes, similar to the
capabilities provided by InterDigital?s wot.ioTM platform. This will simplify
data aggregation across the networks used by the intermediaries and
their partners. Other architectural components include billing, rating and
access tracking. Data providers would connect to a peering point and the
peering partner would ensure the integrity and normalization of the data.
Key features of a data exchange may not all be available in one provider?s
solution and therefore may need to be packaged from different partners
into a comprehensive offer. Not all features are required to launch an IoT
data exchange, but this is an optimal feature list.
Node 2 Node 3
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Recent security breaches, such as hackings of the Nissan Leaf and the
Jeep Cherokee SUV in 2015, are highly publicized and have resulted in
the recall of 1.4 million vehicles6. They highlight the need for end-to-end
security in all IoT solutions, especially where safety is concerned. In a data
exchange, APIs are exposed to third-party developers to enable access to
third-party data while also enabling different systems to communicate and
share information. Therefore, it is essential that API and data access are
secured to protect the integrity of the data and privacy of data providers.
It is also essential for passenger and public safety.
Some of the security solutions also require Identity and Access Management,
API Management, and Secure Key Infrastructure to verify endpoint identity.
Data Sharing Agreements
Companies participating in data exchanges will need to sign data sharing
agreements which specify the rules of data sharing and various financial
terms. Each data contributor will define its required compensation.
Metering infrastructure will capture data use and billing details. Partners
can be added and removed as needed. Security mechanisms will also be in
place to ensure access is authenticated and limited to authorized users.
Data may be charged by tiered access, such as bronze, silver and gold.
Each tier will limit the number of requests or transactions per minute
and charge accordingly. For example, bronze may be limited to 4
transactions per minute while platinum may be allowed 25 transactions
per minute. This will vary depending on how the customer chooses to
implement the solution. Charging for data access is one of many revenue
models supported on the platform. Platforms such as InterDigital?s
wot.ioTM enable a wide variation of implementation options and provide
the foundation for creating a marketplace as well as interconnecting
with third-party analytics and other systems. For more information on
InterDigital?s IoT solutions, visit: www.interdigital.com/iot.
A data exchange would enhance the connected car business model
by allowing data owners to market, promote and capitalize on their
data. It would position the IoT to reach the its full potential. Third-party
companies with expertise in analyzing and marketing data will play
a key role in the evolution of IoT businesses through data brokerage
and the creation of a new data marketplaces. Not only will a data
exchange enable auto companies to improve vehicle performance and
manufacturing, but it will open new opportunities for supporting both
consumer and enterprise-level services.
Attributes supported by
the Security Model:
? Authentication: proving your
identity (prove human and/or
? Authorization: establishing
who can access what
? Availability: ensuring that
the server can accommodate
? Integrity: ensuring data is
? Confidentiality: protecting
data that needs to be
? Non-repudiation: confirming
who sent the message
? Auditability: accounting
for data access
? Identity propagation:
transmitting identity from
one system to another
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For over 40 years, InterDigital has been developing solutions that are at the core of networks, devices and services
worldwide. We solve many of the industry?s most critical and complex technical challenges, inventing solutions for more
efficient networks and richer user experience years ahead of market deployment. InterDigital has licenses and strategic
relationships with many of the world?s leading companies. InterDigital is listed on NASDAQ under the ticker symbol
IDCC. InterDigital, Inc. is a registered trademark of InterDigital, Inc. Wot.io is a trademark of InterDigital, Inc. All other
trademarks, service marks and/or trade names appearing in this brochure are the property of their respective owners.
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1. Bennett, Jeff; Spector, Mike. (2016, January 5). The Wall Street Journal. US Car Sales Sets Record High.
2. Dana, Mike. (2015, September 29). Fierce Wireless. GM CEO: We plan to capitalize on the connected
3. Verisk Press Release (2015, September 2), Verisk Insurance Solutions Announces GM as Inaugural Auto
Manufacturer to Join Telematics Data Exchange.
4, 5. Goodwin, Antuan (2016, January 4). CNET. Toyota adding cellular data connections to ?a broader range?
of vehicles by 2017.
6. Ribiero, John (2016, July 13). PC WORLD. Chrysler launches bug bounty for connected vehicles after
Jeep Cherokee hack.