This last week, I saw presentations from AGL (Automotive Grade Linux) and Microsoft in their battle for the connected car. It reminded me a lot of the early days of the PC: lots of platforms from very different kinds of companies, but only one clear leader. Ironically, that leader is BlackBerry, largely because QNX is already entrenched in the automotive world. But none of these efforts have fully pivoted yet to self-driving cars on the hardware side. NVIDIA is currently dominant, with Qualcomm and Intel trailing, making this a very interesting and very different dynamic.
This is really a time when partnerships between the technology players could make a huge difference, but everyone seems to be in their own boat at the moment. That suggests that this is closer to being anyone’s game than many realize.
Hardware vs. Software for Self-Driving Cars
We start with a class of vendors, car makers, that don’t partner well, are relatively slow moving and, for the most part, don’t get technology. This really suggests to me a massive disruption. A number of new car makers, with Tesla in the lead, are moving to fully disrupt the market on either the pivot to electrical cars or self-driving cars, or both.
Since, as Tesla has showcased, the move to the next generation of cars will take us to something far closer to rolling computers, the same kind of evolution is likely. This means that the current hardware-based power structure could switch to a software and component dynamic, which is what both the NVIDIA-led hardware effort and BlackBerry-led software group are betting on. That suggests that the partnership that would be nearly impossible to beat would be NVIDIA and BlackBerry.
And if the market standardized on NVIDIA’s Drive PX 2 platform and QNX, the market would lock out most of the other players, much like Intel and Microsoft did with PCs. But we have another dynamic in play and that is AGL and open source.
AGL Wild Card
Car companies are not fans of lock in and have had a high affinity, at least outside of the U.S., for Linux and the idea that they can effectively have their cake and eat it too. In other words, they can still standardize on AGL but customize it enough to meet their unique needs, getting a blend of standards and lowering their cost and time to market and differentiable customization.
This bets that cars will be more like servers, and not PC or smartphones, in that the common applications will be few and customized apps will rule, which is consistent with the way the market is. With smartphone interfaces for broader app support, this would appear to be one of the more interesting platforms, were it not for the fact that, like many Linux projects, AGL seems underfunded. To work, it also requires a higher level of cooperation between car companies than they are currently used to and may be comfortable with.
Microsoft is another potential disruptive entry. While under Steve Ballmer, this effort would have had little chance of success, given that the firm lost Ford as its biggest car supporter, but Satya Nadella as CEO seems to have a clue and understands that a huge potential advantage could be the Azure development platform, which is central to the effort. But to win, Microsoft will need to substantially increase its level of investment, find synergy with additional Microsoft products currently not optimized or even appropriate for cars, and execute far better than it did with Ford Sync and AutoPC.
As noted, BlackBerry’s QNX is the closest thing we have to an entrenched product and the firm has cut distractions to focus more tightly on this automotive opportunity. Because the company has been engaged with the car companies the longest, it knows the market and its players more deeply and should be able to dominate. But given that self-driving cars are still, and likely will remain, mostly in test for the next several years and Tesla, likely first to market, doesn’t appear to be using the platform, its leadership position remains precarious. It is interesting to note that BlackBerry did pick up Ford from Microsoft.
Wrapping Up: Who Will Define the Self-Driving Car Segment
Overall, I think the hardware vendors, NVIDIA, Qualcomm and Intel, are far more focused on this market than any of the software vendors, and that partnering up could better showcase the coming winners and losers than going it alone now does. In effect, we are waiting for the same kind of moment that Microsoft and IBM made when they partnered on DOS and the modern PC was born, to define the self-driving car segment.
We’ll see who gets it first.
Rob Enderle is President and Principal Analyst of the Enderle Group, a forward-looking emerging technology advisory firm. With over 30 years’ experience in emerging technologies, he has provided regional and global companies with guidance in how to better target customer needs; create new business opportunities; anticipate technology changes; select vendors and products; and present their products in the best possible light. Rob covers the technology industry broadly. Before founding the Enderle Group, Rob was the Senior Research Fellow for Forrester Research and the Giga Information Group, and held senior positions at IBM and ROLM. Follow Rob on Twitter @enderle, on Facebook and on Google+