Ginni Rometty, CEO of IBM, has boldly stated that big data is a natural resource of the 21st century and it is equivalent to what steam power and electricity were respectively for the 18th and 19th centuries. Keeping in mind the amount of data we have generated in the last two years roughly equates to what humans have generated in millions of years of earth’s existence, you may want to agree with her. Now imagine how much data we will generate in the next 10 years.
There’s no doubt that big data is an important Mega Trend of this decade. As a matter of fact, Frost & Sullivan forecasts that by 2020 we will generate 34 zettabytes of data, an unheard of term a decade back, which roughly translates to about $87 billion USD in monetary value across all industries and functions. The question at hand, though, is whether big data can be “big” in the automotive industry, its value to cars, and where the opportunity lies in this industry.
I led a team of analysts to understand this potential and the results were indeed very enlightening. The team found that big data can provide savings of up to $800 USD per car, and this considers several elements where automotive OEMs can save money, as well as generate new business models. This value is much lower than CISCO’s Andreas Mai’s $1,400 USD per car, which he determined in an internal project he led, and in his own admission, felt was extremely conservative in its valuation.