In a bold collaboration, the carmakers will compete on what customers see but cooperate on back-end data and telematics standards.
Ford and Toyota are fierce rivals, but they're in such a hurry to improve their in-car applications that they've decided to collaborate on standards for back-end technology that their car and truck customers never see.
With telematics, the carmakers know that apps and the digital interface will be an increasingly important reason why people buy one vehicle over another. So Ford and Toyota will cooperate on data standards, such as those for transferring data securely to and from a vehicle, providing Wi-Fi inside the vehicle, improving Bluetooth for connecting mobile devices, and managing information on the back-end.
The pact "doesn't touch what the customer sees," says Jim Buczkowski, Ford's director of global electrical and electronics systems engineering. "We'll continue to compete vigorously on that experience in the vehicle." That customer-facing digital experience is part of "what makes a Ford a Ford," he says.
Two messages should be blaring like an annoying car alarm right now for anyone involved in IT in any industry.
One, technology teams must find ways to move a faster to keep up with customer and employee expectations for what technology can do. The likes of Apple, Google, and Netflix are setting those expectations, and IT teams must keep pace.
Two, technology teams must be brainstorming ways to make IT a part of their products --whether that product's a pickup truck, a hotel stay, a watt of energy, or a trash service.
These are themes we've been addressing throughout this year, warning IT teams they'll drift into irrelevance if they don't move faster and insert themselves into the discussion about how technology fits into new products and the product development cycle. (Want to meet other top IT leaders working out how to deliver IT faster? Join our InformationWeek conference Sept. 11 to 13.)
For anyone tempted to take the "not in my industry" rationale for ignoring these trends, consider the magnitude of what Ford and Toyota are doing. The carmakers couldn't be more intense rivals, and they're coming out of a precipitous drop in car sales. Each has staked out the “digital experience” as central to their products and been aggressively creating partnerships to improve those in-vehicle experiences. (Ford and Toyota are also working together on the next-generation of hybrid vehicle technology for light trucks and SUVs.)
Toyota crafted a partnership earlier this year to work with Microsoft to develop in-vehicle apps. Ford also works closely with Microsoft on its Sync in-vehicle entertainment system, and it has experimented with such out-there ideas as having cars collect health data, like seats that monitor changes in weight.
"It's not in the history of the automotive industry to have this kind of collaboration, but you see this kind of collaboration in the consumer electronics business," Buczkowski says. Consumer electronics companies work on standards for everything from 3-D to Blu-Ray.
For Ford, the bottom line is speed to market and lower costs. If it can develop the back-end standards and innovation needed to enable in-car apps--the things that customers don't see--more quickly and at a lower cost, then its people can focus more creative energy on dreaming up things that make car buyers think "I need that."
"Speed is very, very important--bringing new experiences to the market faster," Buczkowski says.
Still hearing that car alarm blaring? IT teams need to move faster, and they need to focus on innovating for the end customer, not just making back-end processes more efficient. There's no ignoring these trends.
Join InformationWeek’s Lorna Garey and Mike Healey, president of Yeoman Technology Group, an engineering and research firm focused on maximizing technology investments, to discuss the right way to go digital.