Will Ford Motor Company need a new name? Like Apple in 2007, Ford is entering a new business that goes beyond solely making and selling cars.
In 2007, Apple Computer Inc. became simply Apple Inc., as Steve Jobs recognized the revolutionary potential of the iPhone and renamed the company accordingly.
Ford's transformation is nowhere near as decisive, with no product as distinct as the iPhone in the offing. But the company is on its way to becoming more than only a maker of cars, outlining 25 experiments that could lead to new Ford services. It's experimenting in India with letting multiple drivers co-own and share a car, for example, and in Germany with an Uber-like, on-demand transport service using shared mini-buses instead of cars.
In his keynote address at CES 2015, Ford CEO Mark Fields said, "We are driving to be both a product and mobility company and, ultimately, to help change the way the world moves."
[Learn more about the man behind Ford's data drive. See Ford Names Former Nationwide Exec to Lead Data.]
The Ford Mobility Company? That's the company Ford aspires to become, with or without the name. What that means has yet to be decided. Such a move may be unavoidable, though, in an era where everything is expected to connect to everything else. Business boundaries become blurred in the information economy. Look at Amazon.com, sprawled across multiple industries.
In an interview with InformationWeek at CES, James Buczkowski, Henry Ford technical fellow and director of electrical and electronic systems research and advanced engineering, elaborated on Ford's efforts to do business in a world where its primary product, the automobile, may create as many problems as it solves.
While acknowledging the car's significance in American culture as a sign of social status, Buczkowski observed that personal car ownership has become a tough sell in some parts of the world. "If you can't drive it because it costs too much to park, it takes too long, and so on, then that doesn't make sense for our business anyway," he said. "So we're trying to look at mobility and our role in the product, as well as what goes around the product, the services and ecosystem, and so on, and what the future is going to be for Ford."
The future described by Fields leaves little room for Ford Motor Company in some markets, where there's barely enough room for people let alone personal vehicles. Fields described how there are 28 megacities in the world today that have populations of more than 10 million people, and cited projections that there will be 41 such megacities by 2030. Fields said the company's executive chairman, Bill Ford, "has for years been warning of global gridlock if we do not deal with the realities of urbanization." Those concerns extend beyond overcrowding to problems of air quality and growing interest in alternatives to car ownership.
The future of Ford, said Buczkowski, "may involve more than just car ownership. It may involve car-sharing. It may involve planning a trip that has several forms of transportation. ... Especially as the number of cities [with more than 10 million people] continues to grow. The fact is, you can't just put more cars on the road."
Note that Buczkowski used "may" rather than "will" in the above comment. That's because no one at Ford is certain about how the company will come to define itself. But the need for redefinition is clear when you have senior company executives acknowledging the limits on growth for their product in certain markets.
To show how Ford can thrive as a "mobility provider" rather than solely a provider of automobiles, the company announced an initiative called Ford Smart Mobility that consists of 25 experiments. The goal of these experiments is to improve the customer experience, to develop more flexible ways for customers to use Ford products, and to interact with customers in a way that's collaborative and mutually beneficial.
One such collaboration experiment is called Big Data Drive. It involves the capture of driving data -- as much as 25 GB per hour -- from employee volunteers in Dearborn, Mich., through a device that connects to OpenXC, the company's open-source research platform for vehicle data. The experiment aims to provide Ford with a better understanding of metropolitan movement patterns.
Buczkowski said he sees a growing role for big data, analytics, and permission-based personalization in Ford's future. He points to prognostics, in which data that reflects a car's usage history can be used to anticipate the need for maintenance. "Using big data allows us to predict the right thing for you and your car," he said.
Since the introduction of Ford Sync in 2007, the company has been making its vehicles into a platform for information services. As mobile devices have become a common interface for product interaction, Ford has become more focused on technology partnerships. It has been working with mobile-oriented companies including Apple, Google, Microsoft, and Samsung, and with startups and small app-makers.
Ford's IT teams have changed their focus as a result. "At least in manufacturing companies like ours, IT hasn't been focused on external customers," said Buczkowski. "But now we're seeing this integration where the vehicle itself is no longer isolated. It's connected. It's connected back to Ford and it's connected to other areas."
Buczkowski describes how Ford's product development groups now work more closely with its IT organization around issues of connectivity, architecture, technology, security, and privacy. "For the IT guys, their customers in the past have all been internal enterprise customers," he said. "Now those customers, jointly with the product development guys, are external -- consumers that use our cars."
Ford finds itself in a world that's very different from that of its founder. And it has begun the process of reinventing itself.
"We believe we'll always be some sort of product provider, but it's going to be more than just a product," said Buczkowski. "It's going to be a product and an experience that can involve other services that can make the smart mobility experience a good one. We're in the mode of trying to figure that out."
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