Blog Post

Car companies are now cloud companies: BMW to have 10M connected cars in 5 years

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Session Name: BMW Accelerates Cloud Adoption with the ODCA.

Announcer
Mario Mueller
Audience Member

Announcer 00:03

Thank you Chris. Now I know they followed me on OM– unfollowed my own Facebook. That is just choked with pictures of my son. One of the things we’re following on GIGAOM, just on a broader level, is the way connectedness is changing everything. One area that we’re particularly interested in is cars – when they become connected, what can they do? What other things can they do besides get you from point A to point B. So, I’m excited to bring out our next speaker. He’s Mr. Mario Mueller. He’s the VP of IT structure for BMW and the Chairman of the ODCA. He’s going to be talking about BMW accelerates Cloud adoption with the ODCA. Please welcome Mr. Mueller to the stage.

[music]

Mario Mueller 00:47

Hi. Good morning, everybody. Very warm welcome from my side to Europe Structure. The enterprise-ready cloud is here, isn’t it? I think all of us – everybody has made tremendous progress towards the implementation of standardized cloud solutions that are built for the challenges of enterprise ITs. Don’t we? Everybody’s facing unprecedented challenges brought by the rapid data growth that we are seeing there – a proliferation of user access devices and the shift to a digitally driven world. The IT organization is no longer just only a support function. It’s no more an integral part of the customer experience. The world is changing. A growth in the number of devices and mounting data represents an opportunity to become more a critical element of a business value, not just only an operational support as of yesterday.

Mario Mueller 01:51

To seize this opportunity, we must change the fundamental way we manage our IT infrastructure. They provide the resilience and the agility required that our traditional approach simply will not work to get us there. The new approaches are critical to our business bottom line and competitive position in respective markets that working together in new ways is required. Everybody knows yesterday’s IT infrastructure was not built for the challenges of this new world, of big data, and also in connected devices. We do need a new approach to the data center that increase IT agility and builds on a path from what exists today. That approach is Cloud. The use of private and hybrid clouds will allow enterprises, also BMW, data centers to turn today’s challenges into opportunities to drive our business forward and take full advantage of the opportunities in front of us.

Mario Mueller 02:58

To get there, I think we need standardized Cloud solutions that are designed from the ground up to meet the requirements of enterprise IT organizations. This is where the Open Data Center Alliance comes into play. The Open Data Center Alliance is working actively to create requirements for the Cloud based on a foundation of open inter-operable solutions. The work of the ODCA represents the unified vision of more than 300 companies, spanning multiple continents and many, many countries. We are forming the unified enterprise requirements for cloud, and collaborate together with our providers, members, and standard [orgs?] partners to drive these requirements, of course, to adoption.

Announcer 03:57

Take for example BMW. We are overseeing the IT infrastructure. In the past, our IT organization had to manage approximately 110,000 PCs, 9,500 engineering workstations, a few data centers around the globe, many, many, many production plants, our sales organization, our financial services organization, and so on. Today, on top of that, we also have to manage right now – and that’s what we are doing – more than 3 million vehicles that are directly connected to our data centers. We think within five years, the number will grow by a magnitude to 10 million connected vehicles. Each of these vehicles generates a large amount of data that must be collected, protected, and analyzed. That’s not only one of the keys to enhancing the customer experience, but also a key to improving our next generation of vehicles.

Mario Mueller 05:16

I think everybody knows the BMW Group. The BMW Group is one of the largest industrial companies in Germany. It’s one of the most successful car and motorcycle manufacturers in the world. We have three strong brands: BMW, MINI, and Rolls Royce. BWM Group also offers a successful range of financial services. I hope a lot of you are able to enjoy our vehicles, maybe some of you also a Rolls Royce. Anybody a Rolls Royce in the room? Yesterday evening, I saw a few on the street. Rolls Royce is only built in the UK and most of the MINIs are also only built in the UK. 2012 was the most successful year in the history of the company. Our success was built on the desirability of our products, and we sold more than 184 million BMW, MINI, and Rolls Royce. That was approximately 10% more than 2011.

Mario Mueller 06:28

Now, I would like to share a little bit about what we are doing in connecting our car, and what it means for our cloud environment. Connected derived its name– it all starts with the customer – a rich and robust understanding of the customer, what they want, what they are going to, but most importantly, what they want in the future. So BMW connected drive is a technology full of services and apps that connect you closely to the world around you. It makes it easier and quicker to perform, giving you more time for what’s really important. I think it’s your family, friends, and of course, all of us – free time. Particularly in the new e-mobility. The BMW i3 recently launched in Frankfurt. It’s our first electric car. BMW I owners can look forward to a large variety of products and services that offers excellent daily support. There are monitoring tools there to allow you to use your Smartphone to check your electric car’s battery level – for instance, charging status, and charging relevant functions such as heating and air conditioning, as well as a navigation system with advanced route planning that will select the optimal route and display all charging stations around the way. We update, for instance, our real-time traffic information every three minutes through our infrastructure in more than 3 million cars right now.

Mario Mueller 08:15

There will be a new platform for apps available soon for iOS and Android. We are able to program apps that will run within the car. Today, we already have 11 BMW Connected Drive markets in three continents. In 2013, we will finish our rollout in the next 14 further markets. And in 2014, we will add an additional 12 markets. So we plan to have approximately 5 million customers at the end of 2015. By the way, more than 90% of the cars will have all the functionality built in to get connected. What about our Legacy IT operation? If you have a talk with a plant manager, for instance, what do you think is the most important topic for him regarding IT? Any idea? Availability. It’s always availability. They always would like to have 105%. I do not know how that will work. But, we run our manufacturing plants in 2012 by availability around the world and to increase availability by 99.96X%. That’s not enough. This is not enough. We are not able to do more with the solutions that we have right now, with the technology that we have right now. The plants are running a capacity of 120%.

Mario Mueller 10:09

So everybody knows what an incident is in IT. It looks like it’s not such a big problem for us in the BMW Group, but we have planned incidents. Does anybody know what a planned incident is? Stupid – planned incident? It a maintenance measure. I think of maintenance as a planned incident. The problem for us is we are not able to get any time to do all of the maintenance that we have to do on the IT side because they wouldn’t like to give us any down time. We can do it on Christmas Eve, probably. Sometimes Sunday morning, from 8 to 8:15. That’s not enough for us. So the drivers that we have to see is more going into zero down time, automated self-service, and elastic. So server down time and resilience is one of the most drivers in the BMW Group.

Mario Mueller 11:13

We started our journey into the Cloud based on the usages that we worked and built together with many other companies around the world within the Open Data Center Alliance in 2011. Our first release will cover 16 usage cases this year, and it’s fully integrated in our Legacy environment. So we did not build our new Cloud environment, and the old enemy was the Legacy IT. So it has to work together in all our processes. By the way, our company does run IT in version [inaudible]. It’s based on an infrastructure as a service layer. On top of that, we are offer a platform as a service for database, for WIP, and our SAP environment. So the solution is fully structured into layer, so we are able to replace components. Some of the components are self-developed. I tell you, that’s not what we want. We would like to use more standard products from the solution providers in the future. We wouldn’t like to do our own development, we would like to get a solution that we need. That’s why we’re working together with the colleagues in the Open Data Center Alliance to get all the solution providers in the situation to give us the products that we would like to see.

Mario Mueller 12:52

The structure – as you can see over there, how it is organized and how it is set up – is the idealistic. It’s the [inaudible] for database. It’s the [inaudible] for WIP, and it’s the [inaudible] for SAP. This will go into production – the first release – in November 2013. That’s our first version. What we’ve built so far is that we do not need any down time if we need to exchange hardware for our plants and the data center. There were some nice experiments half a year ago. I got the information from one of my colleagues. Hey Mario, we changed the server during production time. Really? Yes, we did and it was by accident. So it was not planned. It was the first live test that we did by accident, and we were able to change the hardware without any interruption to any of the plants. For instance, do you know how cars in of the plants will be the output in a minute or so? Or how many cars we will produce there? Give you an easy answer, every 30 seconds. There’s a new car coming out of one of the plants every 30 seconds. That means if you have an incident or if you have any problem there– you have a big incident, a big impact to the company.

Mario Mueller 14:43

What I would like to do right now is give you the opportunity for some questions – some Q&A. And I really appreciate if you find the time to talk about it even later on today. I will be available. I’m really looking forward to getting into discussion with you, talking about what we have in the BMW Group. No questions this morning. Why? Are you shy? Or do you think I’m not able to answer the questions – may be another reason.

Audience Member 15:23

Can you tell us about the abuse of percentages? You talked about 120% manufacturing capacity. Presumably, what you mean is there was a design goal, which we call 100%, and then you operate the system over capacity. That give you the additional capacity you need so that when down time occurs, you actually get back to the 100% you were seeking. Is that what you were trying to say?

Mario Mueller 15:50

I’m trying to say that the demand of our products is so high that we have to produce more out of– as was planned originally. That’s why the plants re running on 100% of their planned capacity. That means they are working over the weekend. They’re working 24 hours there. And then, you have to tell them, Hey, I need downtime because I have a problem in our infrastructure. We need a patch for whatever. That’s not acceptable for them. They do not understand it, and they would like to have a solution that gives them the freedom that we do not interfere with their original work. That’s what we plan to do. You can argue with them a hundred times. You need it because of security issues and blah, blah, blah. But they do not understand it. I wouldn’t like to argue any more with the plant director. I would like to tell them, It’s yours. You have it all the time. We are able– with the solution that we build, we have a zero downtime for you. Of course, there may be an incident for whatever that’s not a situation, but not a maintenance measure. Any other questions? Just only one today? Anyway, I will be available outside and looking forward to getting into deeper discussion with you. Thank you very much.

6 Responses to “Car companies are now cloud companies: BMW to have 10M connected cars in 5 years”

  1. This is an OEM-centric view of a private cloud as a means to collect data from vehicles and customers. This is not fundamentally different from the way OEMs own and manage the consumer channel today. Consumers will want an über cloud connectivity that allows personal content and services to be delivered to any car at any time independent of the car’s make and model. If you own a BMW and a Ford, you want your “digital identify”, not the OEM, dictate what services you consume and how.

  2. Connected cars – awesome. But Im so bored of hearing about electric cars which are meant to be better for the environment. Has anyone considered the additional cost to the environment to build these cars? The batteries will need replacing after 6-10 years (at very best!), what happens to those batteries and the battery acid? An engine can last for 50+ years.
    Power cuts are common place now in many cities, what will happen when the market share for electric powered cars increases? The power grid cant handle the current requirements.