Cooperation as a model for success in the data business
Highly connected and piloted driving cars generate enormous amounts of data. Is this a public hazard or the basis for new, attractive business models? In a joint interview, Michael Bültmann of HERE and Boris Meiners (Audi) discuss the handling of customer data and the mobility of tomorrow.
Hazardous material or raw material?
Data should not be something that frightens us – it's not a threat, but rather an opportunity.
At the end of 2015, AUDI AG joined with the BMW Group and Daimler AG to buy the digital map and location-based technology developer HERE from the Nokia Corporation. Since then, HERE has been expanding its IT network, step by step. The high-resolution navigation maps and location-based services made available by the company headquartered in Berlin form an important basis for the future of autonomous driving. Michael Bültmann, Managing Director of HERE Deutschland GmbH, and Boris Meiners, Head of Digital Business Portfolio at Audi, talk about the importance of customer data and about the future of driving cars.
Mr. Bültmann, Mr. Meiners, enormous amounts of data are already being created by cars today. How are you using this data?
Bültmann: Today, all the world is talking about big data. But in fact, many companies are sitting on a mountain of data and aren't exactly sure what they should do with it. According to recent studies, only about 0.2 to 0.3 percent of existing data is currently being put to good use. There is a lack of connectivity and communication almost everywhere in road traffic, such as between traffic light systems and cars.
Meiners: In a project two years ago, we discovered that challenges already begin when you want to prepare the data from the car. First you have to sort it, which is no trivial matter, and only then you can understand it and convert it into new services for customers. When we try to get more familiar with the living environment of Audi drivers, we confront a similar challenge: an Audi dealer theoretically has access to hundreds of thousands of data points for each customer – but he can hardly use them because they lie in a vast array of directories.
How can such data be used intelligently?
Bültmann: Data should not be something that frightens us – it's not a threat, but rather an opportunity. We are well advised to accept the reality – and that is that we here in Europe are at risk of falling significantly behind the state of technology developing in other parts of the world. Traditional analogue thinking is clashing quite strongly with the new digital thinking and its requirements. We all, including the industry, must learn to handle data with greater initiative and more transparently. When we at Audi can, for example, succeed in getting the customer to say: “I understand what data Audi has and I have also consented to the corresponding use, where it involves personal data”, then we will have advanced a good step further.
Meiners: As a premium manufacturer we are conscious of our responsibility to our customers and we handle the trust placed in us accordingly. When you achieve true transparency, you expand this trust further.
Bültmann: We are not a data leech that is primarily interested in sales and clicks. HERE is an open platform for location intelligence with a high market share in location-based vehicle solutions. We receive anonymised sensor and fleet data, process it on the platform and send it back. We don’t even save a lot of the data, since it would make no sense.
Cooperation with the competitor
I experience the cooperation with Audi, BMW and Daimler is an outstanding team effort.
Who owns the data? And is it safe with HERE?
Bültmann: In a purely legal sense, the question who “owns” the data – that is, who can exclude others from using it – likely does not play the decisive role. The important thing is that we differentiate the data and find different answers for highly personal information, such as information about music tastes, than for data that concerns control of the engine. But it would also be good, in the area of privacy and security, if we would view the provision of large amounts of data as an opportunity and not as a threat. Why don’t we work together on data protection services for the market?
With HERE, Audi is directly working together with its competitors BMW and Daimler. How well does that work in practice?
Bültmann: I experience the cooperation with Audi, BMW and Daimler is an outstanding team effort. All three are highly competent experts in mobility. That is extremely important for long-term, sustainable investments. Independent of that, we are expanding our network, as was intended from the outset. In the last few months we have involved several new partners, including in China, which is an extremely important market for us. As an open platform, our special strength is in finding partners in the segments and areas where we are not that strong ourselves.
Meiners: I also view this type of model for cooperation as very positive. I’d like to mention a similar example: the Digital Product School at the Technical University of Munich. We are also operating here as joint venture partners with BMW and Daimler. The lawyers from the three companies had long discussions in advance about how we should handle the ideas that are created here. And in the first few days of work, the employees did actually look at each other with a good bit of mistrust. But this melted away after a relatively short time, because everyone realised that they were all facing the same challenges and could only tackle them by working as a team.
How important is open, flexible working for HERE?
Bültmann: Here we could take a lesson from Silicon Valley, where many companies have more of a play-oriented culture than a goal-oriented culture. All of our projects don’t have to run perfectly, either – to us, the super-flexible structure is more important. When you set yourself up in smaller units and work in mixed teams, it is simply a better way to operate. This is why we work a lot at all of our locations with universities and start-ups. The scene in Berlin in particular forms a melting pot with high creativity. And the city also offers a lot in terms of quality of life, of course.
What new business models result for HERE and Audi?
Bültmann: Our location intelligence is not limited to the car. We are also interested in connected homes, for instance, and in drones as a quick, flexible means of transporting goods. Another big topic is shared mobility – that is, car sharing – which is certain to have long-term impacts on the ownership of vehicles.
That would sharply reduce traffic volumes …
Bültmann: … and that will be immensely important, when you think a few decades into the future. Experts predict that in 2050, one city in the world will grow past the one-million-inhabitant mark every week. There are already 14 or 15 million commuters driving their cars in Mexico City. With shared mobility, those cities can be made liveable again.
Meiners: All of the credible studies predict that traffic will decline sharply, especially where regulations take effect. Will major cities even allow cars that are driven by humans to operate in cities in the future? We have to assess these kinds of scenarios and develop intelligent use cases for our customers. We are also considering, for example, what all a car will in the future be able to transport autonomously from A to B. Will the clothing store come to me, instead of me going to the store? Will I drive overnight to Hamburg and meanwhile sleep in the car instead of flying and booking a hotel?
Will it be any fun at all to drive then? How does Audi, the sporty premium brand, have to change?
Meiners: My example is aviation: When I as a customer want to get to a certain destination, the airline is of secondary importance to me. What’s more important is the experience I want to have – first class, business or economy. The sharing economy will also assert itself in road traffic – both internal and external trend researchers tell us that. And while people tend toward the extremes, the desire for very different solutions will develop. Our customers might then want a premium lounge on wheels for business travel and a sharp little electric sports car for the weekend. Our designers are already looking carefully at concepts like this. In any case, the challenge for the future development of the brand is a big and incredibly exciting one.
Cooperation the data business
This interview is part of the internal Audi “Responsibility Perspective” series of lectures that facilitate dialogue and networking between Audi employees and experts from the fields of business and science. The main emphasis is on issues relevant to the sustainability of Audi as well as on consciously questioning accepted points of view and discussing the opinions of external parties.