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SAP Builds Marketplace for Connected Car Services

May 14, 2015 by Arunima Kumar

Just in time for the Silicon Valley Driving Connected & Charged event at SAP Palo Alto, get to know SAP’s connected car business with Timo Stelzer, VP Products & Innovation Development – Global Technical Lead Connected Vehicles.

Where does the automotive industry currently stand on connected car technologies?

The connected lifestyle is a given in these days, so in other words the expectation from drivers of modern cars is that everything is connected to provide a seamless and delightful experience. We already see some widely used applications of connected technologies in cars today. Bringing entertainment into the car, whether it’s Pandora or Facebook, is one such application. More and more carmakers are also using sensor data from vehicles for predictive maintenance and as input to design and build parts better. Carmakers are also obligated by law in certain countries to provide connected safety features (eCall in Europe).

A large and untapped area though is connected services. Let me explain with an example. At this year’s consumer and electronics show in Las Vegas, Volkswagen showed a research project on connected parking that used the parking sensors in cars to identify free parking spaces as cars drove through a city. The idea is to provide real-time data to customers on available parking spaces throughout the city, also known as parking congestion. The automotive industry has yet to figure out how to monetize connected services. In the example I shared the question arises who pays for the service.

Why is it important for SAP to be involved with connected cars?

Every year, around $577 billion are spent by consumers in the US on fueling, fast food drive thru, and parking – all activities involving a car. The automotive industry is currently not part of this market. SAP is building a business model where automotive companies can participate in these transactions – enabling them to monetize connected services. We already work with oil and gas companies, carmakers, and other related industries, and can bring them together in a business network.

We have piloted connected fueling prototypes with Volkswagen and Shell in Germany and Toyota and Verifone in the U.S. The solution directs the driver to the nearest gas station, automates the payment process on a mobile phone or the in dash head-unit, and most importantly, service providers can now also offer promotions based on vehicle data and user profile. In this way, the automotive companies can now become an enabler for cross-selling and up-selling opportunities.

What kinds of advances do you see taking place in connected cars over the next year?

A major trend we see is that automotive companies want to get into the connected services business. This will open a large market for them and build an ongoing relationship with the consumer beyond the sale of the car. SAP will launch its Connected Vehicle Business Network toward the end of summer 2015. This will include connected parking, fueling, and food/QSR.

SAP is hosting the Silicon Valley Driving Connected & Charged event on May 14 at Palo Alto in partnership with the Silicon Valley Leadership Group. What’s on showcase there?

The day will feature several industry specialists as speakers. There will also be demos of several electric vehicles, including Kia Soul, BMW i3, and Volkswagen e-Golf among others. It’ll be an opportunity to meet with the experts and see and demo the latest in electric and connected cars.

This story originally appeared on SAP Business Trends.

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