How Automotive’s Incestuous Web of Collaboration is Leading to Innovation

by Nicole on March 17, 2017

IoT company’s like Bosch are embracing corporate innovation though rolling in start-up culture and by fostering strong partnerships. It makes sense and is the only way to keep innovating at the face pace needed to remain competitive.

The day 2 keynote way focused on Automotive, Jen Hsun Huang CEO of Nvidia shared the stage with Edzard Overbeek CEO of Here Maps both who have partnerships with Bosch. Nvidia announced their new Autonomous Drive Platform with Bosch but anyone paying attention would have noticed that Nvidia is selling the same Autonomous drive solutions directly to Bosch’s customers. Taking an even closer look at some of the attendees of Bosch Connected World it’s easy to see that a few of them were there to sell the same services to Bosch and were in Geneva the week before to take meetings with Audi and BMW.

Is there so much money in automotive that double dipping is standard practice?

At a Nvidia roundtable after the keynote, I had the opportunity to hear Huang address the question of partnerships with one company while at the same time partnering with that same companies customers. I’ll paraphrase his answer for brevity.

Automotive works on tiers and the number you’re in isn’t a reflection on your quality, it’s your position within the supply chain. In terms of layering in Automotive, the OEM is tier 0 and further down the line you would find Nvidia at tier 2.

Though AI is an integral and important part to the autonomous car, autonomy is a feature that’s being added. There is no denying that building the autonomous cars is complicated, so the way that relationships work is that it’s a three-way relationship between the OEM a tier 1 and tier 2.

Alright, so I’ll accept being called an adolescent but Jen Hsun’s analogy of the three way made me think that the circular sales that are happening within automotive which were, to be frank, starting to sound a bit incestuous.

Let’s take a simpler example than an autonomous drive platform, and maybe take a natural speech algorithm. I’ve heard of one company trying to sell the same algorithms to 2 car manufacturers, Nvidia, Bosch, ZF and was also had ambitions of becoming a stand alone application. Basically, the same natural speech solution could be sold to each tier which, would then be resold back through the entire ecosystem as a packaged service. Maybe it’s not sexual relations with a relative, but it certainly is the same technology being paid for a few times back and forth in a very unnecessary way.

Looking at more closely at these partnerships I raised this question to Michael Fausten VP of for Vehicle Systems Engineering at Bosch. He set me straight on the fact that it’s not incest but it’s actually the creation of an ecosystem and a value chain. Without companies like Nvidia partnering with their customers the different problems that exist at different stage of development wouldn’t be addressed.

In order to understand what our customers need, we do half a step up, we will never sell a self driving car, you will never see a Bosch self-driving car on the highway. To understand what our customers do need from us what our sensors need to be capable of and if we don’t work on the whole car system, then we won’t understand. Nvidia is doing the same thing, they’ve done Artificial Intelligence and Bosch needs their software package, their tools, their silicon, their chips to be integrated with our computers.

As long as they do not understand the problems that we’re going to tackle with their technology how will they provide a good platform.

That’s what you are seeing happen, you see OEMs cooperating with tier 1’s and tier 1’s with tier 2’s and everyone is taking half a step up in order to move the whole industry forward.

Companies like Bosch are the connective tissue between all automotive manufacturers, in an ecosystem begging for some form of standardization they are in a unique position to work with every tier. Things would get very interesting if Bosch sold a complete package of certified sensors and Drive PX to their customers.

This idea is similar to a pivotal Shenzen Maker Space called Seeed Studio. They sell CE certified component kits to makers that want to manufacture their products in China but sell them globally. Innovative narrowing of the supply chain has led to Shenzhen opening up to the global community. The result, a nation of copy cat producers are turning into a community of creators.

The potential of Bosch is palpable, admittedly I am in the belly of the beast at Bosch Connected World, but the openness for collaboration needed is here. Infrastructure providers like Bosch could bridge the gap between companies like Nvidia who are pushing the known boundaries and automotive who is proud of bringing their 7-year development cycles down to 4.

For now, an excessive web of cross-collaborations and perhaps the doubling up of services to ensure that all angles are being considered is the price of innovation.