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It’s a great time to live in Detroit and work in the automotive industry.  Not only are days filled with interesting and challenging work, but like many “company towns” party conversation often drives (autonomously?) to topics affecting the industry, it’s members and it’s customers.  As we’ve recently completed both the conference (activities in and around the Detroit Auto Show) and the cocktail party season, I’ve learned much, confirmed some opinions, and found that almost every conversation leads down a set of rabbit trails as complex as the notion of the IofT is overall.  In this series, I’d like to share some of these observations, not as authoritative commentary but as conversation starters, whether I’m talking to you, or you to others.

On the one hand, there’s strong anecdotal evidence that Metcalfe’s Law (“The community value of a network increases by the square of the number of it’s users), originally framed for telecommunications,  applies here as well.  Certainly there’s tremendous investment in anticipation of what might be realized.

But as a baby boomer, I can’t help but also cite another quote: “Shame indeed, but we must not allow ourselves to become too despondent. For, we must never forget that if there was not one thing that was not on top of another thing our society would be nothing more than a meaningless body of men that had gathered together for no good purpose….”  For those who don’t remember, this is from a Monty Python skit “The Royal Society for putting things on top of other things”, which aired in October 1970. Things on top of other things, or things connected to other things.. is there a difference?

I think there is, but perhaps not as much as some would hope.  And I think that in every conversation on the subject we need to remember that if there’s not value that translates directly into a better, more efficient, and less expensive experience for the driver then we have a non-starter.  One last quote, familiar to all and lacking any specific attribution: “if it has value, and you’re not paying for it, you’re not the customer, you’re the product”  Individual consumers in their cars may be OK with this, but they will insist on sharing in the value created.

Needless to say, there are a lot of places we can go just on that foundation.   For brevity’s sake, I’ll break the discussion into several posts.  First, this one as an introduction.  Second, the Business to Consumer dimension – how the IofT and connected car impact the relationship between the vehicle OEM and other consumer facing businesses and the driver.  The second, more of an “insider” look, will discuss connection between different on board systems controlling the vehicle, among OEM and Tier suppliers, and how value might be realized here for all that will increase reliability and lower cost.   The Dealer channel will show up in both.

So hopefully you’ll tune back in for both of these discussions, and contribute your shares and comments.