General Motors and IBM’s Watson – Oh the Places (We’ll Tell You) To Go
How can General Motors merge digital communication technology with its vehicles and compete in the mobile application space?
General Motors finds itself at a crossroads in terms of how to merge digital communications with its vehicles, and how to bring in-house the new technologies that can differentiate its products. With the proliferation of the Internet of Things and the pervasiveness of mobile app technologies that consumers use in their vehicles, General Motors is striving to remain relevant in this field and evolve both their business and operating models. To that end, GM has recently announced a partnership with IBM’s Watson “in an effort to leapfrog other tech companies angling for a role inside the car.”[1]
By means of definition, “The phrase ‘internet of things’ has arisen to reflect the growing number of smart, connected products and highlight the new opportunities they can represent…What makes smart, connected products fundamentally different is not the internet, but the changing nature of the ‘things.’”[2] As a case in point, General Motors’ partnership with IBM’s Watson to develop a new version of their OnStar system, OnStar Go, represents just one of these many new “things.” The system itself is designed to learn from the driver’s behavior and tendencies and deliver personalized offers from partner organizations.[3] For example, OnStar Go can analyze the distance to the driver’s next destination, determine that he’ll need to refuel prior to arriving, and plot the route to the nearest Exxon Mobil station, one of GM’s partner organizations.
This new technology is the first foray into a partnership of this kind between an automaker and IBM, and it represents a shift in the mindset and strategy of General Motors. Not only does General Motors have to produce quality, reliable, and well-designed vehicles, but it now also has to offer an interconnected experience for each consumer. GM, not unlike many of its competitors, faces the challenge of creating useful and seamless interfaces for its vehicle lineup to account for the proliferation of interconnected devices. Due to this shift, General Motors’ competitive set in this space has expanded to include not only other automobile manufacturers, but also technology companies like Apple and Google, who have created software that allows drivers to connect to their vehicle infotainment systems via their smartphones. As such, General Motors faces significant challenges, namely: how to differentiate its technology and connect more of a consumer’s daily life with her vehicle, create barriers to entry for the technology companies, and create a medium to interact with and address consumer needs all under one roof—that of the vehicle itself.
In response to the challenging competitive environment and shift in business model mindset, General Motors and IBM have focused on what the OnStar Go system can access that differentiates it from the Google and Apple mobile software. For instance, “GM lets drivers use Apple’s CarPlay and Google’s Android Auto, but won’t share information about the car, such as tire pressure, with those third party provided systems.”[4] General Motors will have to ensure that the services its new OnStar Go system provides cannot be easily duplicated by tech companies. At the same time, GM will have to gain rapid adoption and hope that it has not arrived on the scene too late to unseat the tech companies’ place in the consumer’s driving habits. How General Motors and IBM can seamlessly connect a driver’s habits and purchases to retail partners, tout relevant recommendations and accurate directions, and interlay that with useful information about the vehicle itself will ultimately determine their success in the interconnected automobile technology space. But will it be enough to oust the dominant Apple and Google smartphone software and their place in driver’s lives?
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Exhibit 1: Apple’s CarPlay[5] Exhibit 2: Google’s Android Auto[6]
Exhibit 3: General Motors’ OnStar app on a German customer’s phone, linked to the vehicle’s display system[7]
Footnotes:
[1] Rachael King and Mike Colias, “General Motors Brings IBM’s Watson Into Its Vehicles,” The Wall Street Journal, October 25, 2016, http://www.wsj.com/articles/general-motors-brings-ibm-watson-into-its-vehicles-1477432187, accessed October 2016.
[2] Michael E. Porter and James E. Heppelmann, “How Smart, Connected Products Are Transforming Competition,” Harvard Business Review (November 2014), 4.
[3] Rachael King and Mike Colias, “General Motors Brings IBM’s Watson Into Its Vehicles,” The Wall Street Journal, October 25, 2016, http://www.wsj.com/articles/general-motors-brings-ibm-watson-into-its-vehicles-1477432187, accessed October 2016.
[4] Ibid.
[5] Ron Amadeo, “One Week with Apple’s CarPlay,” arstechnica.com, January 22, 2016, http://arstechnica.com/apple/2016/01/one-week-with-apples-carplay/, accessed October 2016.
[6] “Android Auto,” androidcentral.com, August, 2016, http://www.androidcentral.com/android-auto, accessed October 2016.
[7] Rachael King and Mike Colias, “General Motors Brings IBM’s Watson Into Its Vehicles,” The Wall Street Journal, October 25, 2016, http://www.wsj.com/articles/general-motors-brings-ibm-watson-into-its-vehicles-1477432187, accessed October 2016.
I like how the article manages to describe in a concise way GM’s challenge in dealing with Google, Apple (e.g. what type of information to provide or not to provide…). However I would have appreciated to learn a bit more about what GM was expecting from IBM’s Watson technology. The example you provide, indicating when and where to fill up, appears quite trivial. What else could Watson help with? Could it help with some level of autonomous driving, for example? In our latest TOM class we learned that IBM was having difficulty in commercialising Watson’s technology, it would have been interesting if you could have explained in a bit more detail how helping drivers here matched Watson’s capabilities.
Interesting post. I, too, have questions about who will ultimately win the connected car arena. On one hand, clearly GM currently has an upper-hand given they control the production of the car. On the other, I carry my phone with me everywhere I go, and I think my phone does a fine job of navigating and playing music – rendering the OnStar (or equivalent) largely irrelevant.
Another pressure point for the OEMs will be that of autonomous vehicles. While GM is working hard, it appears Google, Apple, and others are currently ahead of GM in this race, and, if this trend continues, I wonder who will then hold the bargaining power?
http://www.bloomberg.com/features/2015-gm-super-cruise-driverless-car/
Hi Chris – thanks for sharing! I think the OEMs are going to have a tough time competing with Apple and Google, but as AT mentioned, they still have the upper-hand since they manufacture the car. In my mind, they are still failing to recognize their most important advantage: the whole car has the potential to be interconnected and become interactive. For example, why limit yourself to a tiny display next to the wheel when your front windshield can serve as your GPS (see BMW navigation system: http://www.bmw.com/com/en/insights/technology/technology_guide/articles/head_up_display.html)? Are buttons and levers still relevant or should, for example, lights and wipers be automatized, voice recognition controls for the AC, etc.? There are so many ways in which GM could innovate and Apple and Google cannot!
The digitization of the auto industry is one of the most fascinating and fast moving trends of the decade. GM’s approach feels a bit provincial though in comparison to other OEMs who are attempting to overhaul the very essence of the car through a proliferation of sensors and ADAS systems. The Onstar Go program may be more readily understood by consumers than chassis technology, but it is a very cosmetic add-on to a traditional vehicle. I would be interested to see how they integrate Watson into vehicle-to-vehicle technology and other groundbreaking innovations in this industry.