The Route to Connected Vehicles of the Future: How Edge & Cloud Ecosystems are Paving the Way

Michael Erz
Michael Erz
September 10, 2021
9 minutes
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The number of connected vehicles around the world is growing rapidly. It's estimated that by 2025, when 100% of all new vehicles to market will be connected, there will be more than 400 million connected passenger vehicles alone. More connected cars require connected vehicle ecosystems in smart cities to function efficiently. The market is expected to see a compound annual growth rate (CAGR) of 17% between 2019 and 2027, amid increasing population density in urban areas. According to the UN, nearly 70% of the world’s population will live in cities by 2050. So, the performance of modern networks to support connectivity is becoming even more critical.

Whether automotive industry players will be successful or not depends on how they leverage ecosystems and combine technologies like edge and cloud computing. In tandem, they can deliver a wealth of benefits, including safe and reliable autonomous driving, energy optimization and real-time navigation, as well as new data and subscription services.

To pave the way for connected vehicle ecosystems, read on!



1. Why connected vehicles and their ecosystems will fuel the future

So what, exactly, is a connected vehicle? It’s one that can be linked to different services and devices via wireless networks. This includes other connected car technology such as software, entertainment and communications, or parts of infrastructure such as traffic signals, emergency centers and navigation aids, as well as other vehicles, and even bicycles, cyclists and pedestrians.

A connected vehicle ecosystem refers to everything that will connect to the car via smart-city platforms. It’s the sum of every fixed or mobile device or sensor that can connect to tomorrow’s cars. It will be able to collect and process information on everything from location, weather and driving conditions, to parking availability, congestion or hazards ahead.

In short, both will become part of tomorrow’s inner-city networking with a seamless and continuous exchange of information and data via fixed devices, sensors, and via the edge and automotive cloud services.

As 5G grows, and eventually gives way to 6G a decade or so later, those connected vehicle ecosystems will be key to providing state-of-the-art vehicles with the ability to become sentient machines. They will rely on the transfer of data through wireless communications for everything from situational awareness to predictive maintenance.

How will this benefit users?

Broadly speaking, the term “users” will include not just passengers: fleet owners, smart cities, original equipment manufacturers (OEMs) and original equipment suppliers (OESs) will all stand to gain, too.

Connected vehicle technology will offer services including driver assistance, safety features, entertainment, well-being, as well as vehicle and mobility management. Vehicles could receive rapid product iterations over-the-air to further improve software functions. Users will be automatically connected to ecosystems to enable easier road charging and reactive traffic monitoring and management – improving the driving experience significantly.

For businesses, connected vehicle technology will also open up the potential for monetizing connected-car data with big data analytics. Connected vehicle ecosystems will also soon enable the wide-spread use of fully autonomous vehicles and will offer predictive maintenance and decentralized fleet-management features, while significantly improving vehicle condition monitoring, predictive analytics and optimized fuel/hydrogen/electricity consumption. From a strategic perspective, many of these benefits will ultimately aid a gradual move towards a vehicle-as-a-service model, where subscription models based on usage rather than ownership gain market share.

The potential for businesses and passengers alike to unlock the future of mobility is clear. But how to untap it?

2. Edge / cloud and IoT platforms can be key enablers for connected vehicles

The automotive sector is awash with buzzwords relating either to the edge or to the cloud. So far, key players have tended to focus on just one of these technologies. The sweet spot, however, is in the combination of both edge and cloud: each will need to work together to truly enable connected vehicles.

Despite an on-going and increasing shift to the cloud, pushing everything to the cloud is expensive. And although current cloud connectivity cannot, without latency, support uploading and processing the 1 GB of data that connected cars will generate every second, the ability to do that isn’t far away.

So, from a strategic perspective, when many functionalities can already be handled on the edge, the key question for automotive players is: which particular service categories warrant the cloud and which can be processed on the edge?

Automotive edge computing involves data processing and analytics physically close to where data is generated and collected. At its simplest, it narrows the gap between data storage and the devices that rely on it to function within a pre-determined timescale. This means that latency problems can be resolved by meeting the sub-1 millisecond reaction time that safety-critical features demand. Not only is it more dynamic and flexible than the cloud for certain applications; for many service categories, it’s also more cost-effective. When combined with IoT technology, edge computing saves bandwidth, allowing you to allocate resources efficiently.

When deciding between edge and cloud solutions, the crux lies in differentiating between service categories to make those decisions more manageable!

3. Developing your combined edge-cloud ecosystem nails down to two decisions!

Seeing the car as part of the greater ecosystem is key, and building your ecosystem boils down to two issues:

  1. Which partners do you include?
  2. How do you combine both technologies to focus on the sweet spot?

Choose your ecosystem partners well:
Many providers claim expertise in either edge or cloud technology, but choosing the right partner is not as easy as it seems. Include your entire value chain – from the very beginning, think about hardware and software providers, developers, national government organizations, OEMs, OESs and beyond. After doing so, it’s crucial to pull the network together by fostering continuous interactions, enable seamless interaction based on an open technology architecture and utilize joint data to continuously maximize potentials of the collaboration within the ecosystem.

Decide where to combine edge and cloud technology:
Which vehicle features should be in the cloud and what makes sense on edge? The crux lies in differentiating between service categories to make those decisions more manageable. Driving assistance such as collision avoidance, for example, is currently better suited to automotive edge computing, where a low latency, or fast reaction time, is needed. The edge also supports other safety-critical features such as lane discipline or traffic-sign recognition. Furthermore, vehicle-to-vehicle (V2V) and vehicle-to-everything (V2X) communication via Dedicated Short Range Communication (DSRC) and Cellular-V2X (C-V2X) can be used to transmit e.g., the previously detected red traffic light to another vehicle. Navigation, on the other hand, can be dealt with by automotive cloud solutions, as can features such as energy efficiency, vehicle security and multi-level authentication. In addition, some subscription and premium data services may warrant the higher costs of cloud. In short, automotive cloud services are suitable for use cases in which higher latency is acceptable or desirable, and where subscription revenue streams warrant the cloud.

How you maximize the benefits of each technology, once safety-critical features are assured, ultimately comes down to a strategic choice: which applications and services justify the higher costs of the cloud, and which ones can save bandwidth on the edge?


4. Summary – more than the sum of its parts

The key to developing an edge-cloud ecosystem is to view vehicles as an integral and integrated part of a much bigger system. A connected car is connected to a fleet, which is in turn connected to entire smart-city platforms comprising everything from highly dynamic and unpredictable road and city users to transient static features such as adverse weather, lane closures and accidents.

With demand for smart-city ecosystems that encompass passenger vehicles and their connected vehicle platforms as part of the whole system, it’s crucial to build a partner ecosystem along the whole value chain. Prioritize the integration across the partners and focus on easy technical connectivity. Here, it doesn’t have to be an edge vs cloud decision: It’s crucial to find a way to combine them efficiently for each individual use case!

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Michael Erz
Michael Erz
Global Head Automotive & New Mobility