Software is eating the world - The Automotive Industry
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The automotive industry can be used as a great proxy to explain the impact of software on established markets, and how the same will increasingly impact other markets. Essentially, as software is becoming increasingly important in how companies differentiate their products, some maverick vendors decide to extensively play on the software card in order to disrupt the entrenched vendors. In the automotive industry, that maverick is called Tesla.
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Software is eating the world - The Automotive Industry
- 1. ©2016 CloudBees, Inc. All Rights Reserved 1©2016 CloudBees, Inc. All Rights Reserved The Road Ahead CloudBees Automotive Industry Event Böblingen, April 2016 @Sacha Labourey, CEO
- 2. ©2016 CloudBees, Inc. All Rights Reserved 2 Automation is the Key Photo courtesy of Steve Jurvetson via Flickr
- 3. From 12.5 hours… Time to Assemble a Model-T …to 93 minutes!
- 4. Ford built 300’000 cars with 13’000 employees Efficiency! More than his 300 competitors with … 65’000 employees!
- 6. ©2016 CloudBees, Inc. All Rights Reserved 6 “Software is eating the world.” “Every business is in the software business.” “It’s an application economy.”
- 7. ©2016 CloudBees, Inc. All Rights Reserved 7 Photo courtesy of Naddsy via Flickr
- 8. “An Airbus 320 takes off or lands every 2.5 seconds somewhere in the world. Every 30 minutes they generate 1TB of information – that’s a lot of terabytes” Simon Bradley, Airbus Group
- 9. ©2016 CloudBees, Inc. All Rights Reserved 9 http://www.thelocal.de/20160119/software-malfunction-means-luftwaffe-can-only-fly-in-the-day
- 10. ©2016 CloudBees, Inc. All Rights Reserved 10 Photo courtesy of Steve Jurvetson via Flickr
- 11. ©2016 CloudBees, Inc. All Rights Reserved 11 Photo courtesy of Steve Jurvetson via Flickr
- 12. If, 10 years ago, you had told engineers at leading car vendors their that cars should be updatable “over the air”, to fix them but also to add features, they’d have told you you’re not being serious. In 2016, this is the new baseline to reach.
- 16. This is the first time in the history of the car industry that a car can INCREASE its competitive value AFTER it was bought!
- 17. ©2016 CloudBees, Inc. All Rights Reserved 17 Tomorrow is around the corner…
- 18. What car will you buy to your grand kids? 250 deaths 2 deaths Self-driving car software – casualties in the last 12 months: ?
- 19. ©2016 CloudBees, Inc. All Rights Reserved 19 Time v1.0 Release v2.0 Release Time Continuous Releases Risk/ Cost Risk/ Cost Versioned Software Continuous Delivery – “As a Service” Reduce risk, reduce experimentation cost, fail-fast
- 20. ©2016 CloudBees, Inc. All Rights Reserved 20 Speed + Friction ? FRICTION + SPEED = HEAT!
- 21. ©2016 CloudBees, Inc. All Rights Reserved 21 Continuous Delivery and Automation are Key Development Production Commit Build Test Stage Deploy Feedback Loop $ The Business
- 22. ©2016 CloudBees, Inc. All Rights Reserved 22 Jenkins – the #1 Automation Platform for CI/CD Complex Delivery Pipelines Delivery of App and Config Robust and Highly Available Results Report SOURCE CODE CONTROL SYSTEM Code Commit </> Development Production Continuous Integration/Delivery Commit Build Test Stage Deploy Deliver Better Software Faster with CloudBees Jenkins Platform
- 23. ©2016 CloudBees, Inc. All Rights Reserved 23 Jenkins is the Hub of the CD/DevOps Ecosystem Over 1000 Jenkins Plugins Integration with over 100 DevOps Tools Orchestration of the DevOps Toolchain End-to-End CD Pipeline Management Code & Commit Build & Config Scan & Test Release Deploy
- 24. ©2016 CloudBees, Inc. All Rights Reserved 24 Automation is the Key Photo courtesy of Steve Jurvetson via Flickr Good News: We already had to solve « pipeline » issues with automation
- 25. Because it can’t be done alone But building cars is particularly hard…
- 26. Car maker Tier-1 suppliersTier-2 suppliersTier-3 suppliers software software software software software software software software software software software software software software software software software software software Every company in the supply chain is using its own CD pipeline, isolated from each other
- 27. Car maker Tier-1 suppliersTier-2 suppliersTier-3 suppliers software software software software software software software software software software software software software software software software software software software The real software pipeline is the industry-shared pipeline
- 28. But a matter of WHEN It is not a matter of IF REALITY CHECK
- 29. CONCLUSION • The software revolution in automotive is en route – nothing can stop it • Some new titans will emerge (Google), some old titans will disappear (Kodak) – THIS REPRESENTS A HUGE OPPORTUNITY! • Possibility of de-intermediation of vendors – Margin goes to software, not “hardware” • The race has already started, GO GO GO!
Editor's Notes
- This picture is a good representation of the future of the Automative industry, with big changes ahead, hence, lots of opportunity
- A century ago, in 1914, a company, Ford, created an amazing company differentiator, it invented the concept of an assembly line. This was not just a mere optimization, this wasn’t about getting 10-15% more out of a process, this ended up being a fundamental paradigm shift, one that gave such a great competitive differentiator to Ford that it really defined the new baseline that all companies had to be aligned on if they wanted to merely compete with Ford. That’s the thing with paradigm shift: they redefine a market. http://www.nydailynews.com/autos/ford-assembly-line-turns-100-changed-society-article-1.1478331
- THIS IS a paradigm shift, not just a mere evolution, it redefines the rules of the game. Any company able to create such a shift, the ability to lead that market is very high. For anybody unable to match that new baseline, the risks are huge.
- And there is such a shift currently taking place. We’ve heard this Meme over and over. First Marc Andreeson said “Software is eating the World.” Then a number of folks have talked about how “every business must be in the software business today”. Fundamentally, we all realize that it is an application economy.
- An industry with a strong history that has already been strongly impacted by software is the flight industry. A leading edge industry where constraints are huge, from safety to cost efficiency. This is the cockpit of the new Airbus A380. The entire plane is flown with software. From the “fly by wire” side-stick controllers to the full-size keyboard that allows the pilot to enter data in his “electronic flight bag”. Software has really eaten this plane. Look at the complete keyboards on both sides, full size screens everywhere. This is a massive computer with wings.
- But as with anything software-related, power comes with responsibility. Here is how a simple software bug has grounded German jets at night operating in Syria. http://www.thelocal.de/20160119/software-malfunction-means-luftwaffe-can-only-fly-in-the-day The six aircraft sent to Syria are fitted with surveillance technology, and had been touted as being capable of taking high-resolution photos and infrared images, even at night and in bad weather. But Bild reported that night flights were impossible as pilots are blinded by the cockpit light which is far too bright. A defence ministry spokesman admitted that there is &quot;a small technical problem that has to do with the cockpit lighting&quot;. &quot;It is possible that the night goggles worn by pilots result in reflections,&quot; he said, adding that the ministry was looking at resolving the problem within the next two weeks. He added that there was &quot;currently no need to fly at night in Syria&quot; and that the deployment was performing at &quot;100 percent&quot;. Germany&apos;s military has faced criticism in recent months over the state of its weaponry. Its G36 assault rifle -- which is being phased out by the army -- became the butt of jokes after reports that it had trouble firing straight at high temperatures. Der Spiegel magazine had also reported last year that only four of the military&apos;s 39 NH90 helicopters were currently useable.
- “Now take a look at this dashboard of the new Tesla Model S. Does it look a bit like the A380 dashboard? This not only look like a computer…
- It actually gets upgraded post-delivery, over the air, several times a year!
- Yep.
- THIS IS a paradigm shift, not just a mere evolution, it redefines the rules of the game again. Tesla is redefining what the new « normal » is in the automative industry. If you can’t upgrade, fix and improve the features of your cars post-delivery, you are not at parity with the market.
- This is not just a change for the vendors, but also to the administration and certifying bodies! Disruption happens for the entire ecosystem. The problem was fixed so quickly that it actually disturbed the process set by authorities to investigate issues! http://www.pcmag.com/article2/0,2817,2427930,00.asp
- Recently, Tesla released some auto-pilot features through a simple software update.
- This is a game changer. When buying a cars, people are aware that their car loses about 30-40% of their value as they simply leave the dealer. But think about it, if you take two equivalent cars, including a Tesla, their value dropped for both as they left the car dealer. But a few months after, as the auto-pilot feature was released, buyers of the Tesla car suddenly saw the value of their car, comparatively to the other car, saw a huge bump! This is also an opportunity for vendors to create new value, generate new revenues on cars already out in the street.
- We know that self driving cars will be the new norm in the future.
- This radically changes the perceived value of cars. While in the past, design, power, consumption, etc. were possibly the leading criteria when selecting a car, chances are very high that software safety will be the prime criteria for selecting a car, preferring a less powerful uglier but safer car to the opposite.
- In the car industry, like in many hardware-based industries, software releases tends to be strongly associated to the hardware lifecycle. Big releases. In batches, with low follow-up upgrades. Best way to get a software upgrade is typically to crash your car and buy a new one. But we are moving away from this, towards more continuous release cycles, where we disconnect the lifecycle of hardware and software, providing not just fixes but also new features and improvement over time, helping both the vendor but also increasing customer success.
- But merely saying that you want things to happen more frequently, releasing more, doesn’t just happen in a snap. This is not about releasing 10-15% more frequently, it is about moving from once every 2 years to multiple releases a month, with proper customer releases happening several times a year. This is a huge change. And as we all know, simply adding SPEED to an existing process with plenty of friction will just creating HEAT. Think about it… If you have an 18 months process, spending 3 months doing the actual release might be fine, but if you then moving to a monthly release, spending 3 months every month isn’t going to fly...
- Continuous Delivery (or CD) is just that. It is the application of automation to the application lifecycle, taking code from development through all the stages of the lifecycle and deliverying to production. Just as manufacturing has applied automation to the plant floor, CD applies automation to the application factory – the IT department. One key aspect of CD (and DevOps) is the incorporation of monitoring and feedback loops throughout the lifecycle. And the feedback loop includes the Line of Business so that they can immediately understand the impact of the new application releases. In a fully automated CD pipeline, information is continuously available regarding the state of that pipeline.
- The good news is that this industry already went there. CD is really “just” applying what this industry has learned a century ago and applying it… to software!
- Not all problems are equally hard to solve. In the automotive industry, no vendors build all components on their own. The market is highly structure in multiple tiers of providers. In order to truly get to a continuous delivery of new features, it is really the entire markets that needs to redefine they work and collaborate together.