When you talk about SAP and cars, it’s important to remember that, as much as the US or any other country is said to have a car culture, Germans have a passion for das auto that puts them into an entirely different category. And it’s not just because there was a time when German autobahns had no speed limit, and rolling at well over 120 miles per hour was standard operating procedure (and quite a lot of fun). Much of what we think of as modern automotive engineering had its origins in Germany — from the four-stroke engine, to the electronic ignition, to the catalytic converter — and companies like Audi, BMW, and Volkswagen pioneered the transfer of technology from specialized racing cars into the mass market.
So it’s not surprising that SAP is being true to its German roots by taking that cultural passion and driving (pun intended) some serious innovation into our ubiquitous four-wheeled transportation devices. By the time SAP is done with what you and I currently think of as a car, we’ll probably have to come up with another term. Like the smartphone, which has rendered the process of making phone calls almost an afterthought, the connected car that SAP is planning will make mere driving seem a little quaint.
Not Your Grandfather’s Model T
Let’s be clear: we’re not talking about simply watching YouTube or checking our Facebook status while we’re driving, which frankly would do little for humanity other than spawn a whole new category in the Darwin Awards. Rather, think of the car as a commerce platform, with the driver as the consumer of a set of either net-new services or old-guard services in desperate need of a new lease on life. Accordingly, don’t think of SAP as a software company — or a car company, for that matter — but rather as a service provider connecting cars, people, car manufacturers, and businesses in very new and exciting ways.
The first step is to think about the myriad things associated with driving that haven’t had a technology upgrade since the Ford Model T. Buying fuel, charging an electric car, parking, carpooling, buying or dealing with insurance, shopping — the car’s role in these activities has changed little if at all in the last century. The other thing to think about is that different service providers — gas stations, parking garages, insurance brokers, nascent carpooling services — are individually building technology infrastructures that might be able to provide a much needed upgrade, except that no driver will want to connect one-to-one with every service provider he or she wants to use.
Finally, think about SAP’s position in the global economy. Automobile manufacturers use SAP software. Oil companies use SAP software. Utilities use SAP software. Retailers, transportation companies, insurance companies…are you getting the picture?
So, imagine if SAP offered the ability for different car manufacturers to connect their cars, and therefore, their drivers, to a many-to-many hub of services that made it easy for drivers, regardless of the make or model of the cars they drive, to do business with every service provider, regardless of that provider’s technology infrastructure. What if the car was more like a smartphone, and the things you do while driving — refueling, shopping, parking, carpooling, getting towed — were “apps” that ran on your car the way the Amazon app or iTunes run on your iPhone?
This, effectively, is SAP’s dream of the connected car. Take that dashboard real estate, which is pretty much wasted space in most cars anyway, and turn it into an interface that makes you, the driver, a consumer of next-generation services. From your car or your smartphone — or actually, both in tandem — you can not only buy concert tickets, but you can reserve the parking spot you need and grab a dinner reservation while you’re at it. You can pay for your fill-up without pulling out your wallet and book that carwash during your lunch hour. Clearly, this wouldn’t be your grandfather’s or Henry Ford’s Model T anymore.
Enabling the Future Connected Car
The trick for SAP is not to provide the consumer-level services associated with the connected car, but to enable them, very much in the model of the .com era’s net markets. Aggregate services like payments, provider onboarding, links to location services, and connectivity in a single technology hub, provide or support a unified user experience and mediate the relationship between consumers and service providers.
This way, General Motors, Toyota, Daimler, and Volkswagen don’t have to agree on car commerce standards as long as they agree to work with SAP. Parking garages, from mega-players like Central Parking, to municipal garages, to Tony’s Discount Airport Parking, can all sign on, and as long they comply with protocols, they’re in business. Chevron, Marathon Oil, and Tony’s Discount Gas can all take your automatic payments — and in fact, Tony ought to be able to aggregate his overall credit card charges and get some relief from the onerous per-transaction fees he pays to credit card companies to process his customers’ purchases.
And meanwhile, up there in the cloud, SAP HANA is taking all that commerce, location, and operational data from cars, analyzing it, and providing the foundation for new services and business models. (And hopefully, State Police won’t subpoena our location data a la the National Security Agency’s Prism project and nail us with speeding tickets based on how fast we move from location to location…but that’s grist for a future column.)
Importantly, SAP’s role as the service provider will help it cement the deals it needs to get all these different companies to come to the table. SAP doesn’t need to have a direct business relationship with individual drivers to make this work, which is key, as that’s the car company’s territory. I’m sure there will be a little SAP branding to the enterprise, but in general, everyone from GM to good old Discount Tony can keep their direct relationships with their customers and give them some very interesting value-added services as well.
The Countdown Begins
When does the car as we know it cease to be a car? The seeds are being sown now. Car companies are now building software development kits for their onboard software, and parking companies are already providing touchless credit card payment via carpool lane transponders. Consumers are already downloading parking and carpooling apps to their phones, and automotive standards efforts are underway on multiple continents.
Considering the perfect blend of consumer functionality and business-to-business enablement that the connected car represents, if SAP can get its partnerships in order, this opportunity will be coming to a car near you in the next few years. Ladies and gentlemen, don’t start your engines — start your apps.