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Connected Cars: on the Edge of a Breakthrough How the AECC’S Distributed Edge Architecture Can Drive Revenue for Mnos

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Connected Cars: on the Edge of a Breakthrough How the AECC’S Distributed Edge Architecture Can Drive Revenue for Mnos WHITEPAPER Connected Cars: On The Edge Of A Breakthrough How the AECC’s distributed edge architecture can drive revenue for MNOs Published by Executive Summary Mobile networks will enable many of this decade’s most promising technologies, and perhaps no other device holds as much potential as the connected vehicle. GSMA has forecast that the global connected car market will be worth $198 billion by 2025.1 According to the analyst team at McKinsey, the average vehicle will generate an estimated $310 a year in connectivity revenue by the end of this decade2 (annual smartphone revenue per user (ARPU) would have to grow at a compound annual growth rate (CAGR) of more than 10% to match that3). As each vehicle on the road becomes part of at least one mobile network, the opportunity for operators is significant. So, too, is the cost of letting the connected car ecosystem evolve without coordinated cooperation from mobile network operators (MNOs). By 2025, at least 400 million passenger vehicles globally will have embedded connectivity, according to SBD Automotive's 2020 Connected Services Forecast.4 A data deluge from connected cars is coming no matter what, and operators that get involved now will be ready to handle the data more economically and efficiently. The AECC is a multi­industry collaboration formed to maximize the opportunities created by vehicular connectivity and automotive big data. Recognizing the connected car’s reliance on cellular networks, leaders from the automotive industry are partnering with carriers, equipment vendors, software developers and cloud service providers. Proactive mobile network operators are collaborating with the auto industry, which is increasingly focused on delivering services in addition to simply selling vehicles. Services such as dynamic HD maps and intelligent driving rely on the network’s ability to instantaneously process localized data and transmit actionable insights. Mobile networks will need the computing resources to process the right data in the right place at the right time: a topology­ aware distributed edge computing cloud architecture. This white paper examines the opportunities for MNOs to become leaders in the emerging ecosystem of the automotive edge. To fully capitalize on this opportunity, mobile network operators need to work closely with a consortium of automotive, edge and cloud solution providers. 2 WHITEPAPER The AECC’s Topology-aware Distributed Edge Computing Cloud Architecture equipped with fast internet access, With the right infrastructure and What is the artificial intelligence and access to protocols in place, connected cars AECC and how is its big data analytics for high-definition will be able to interact with cellular map creation and distribution, as networks rather than just using them approach unique? well as for services like intelligent to send massive amounts of data to driving and more. Within four years, the cloud. Navigation is a good The AECC and its members are hundreds of millions of vehicles will example. Unlike today’s navigation working to identify the connected be sending a thousand times more apps, which use relatively small vehicle requirements needed to data to the cloud than today’s amounts of cellular data, real-time design the next generation of connected cars. high-definition maps will be in networks that can think globally and constant communication with the act locally. As cars become As the connected car market rapidly network, providing a service that will increasingly autonomous, data will expands beyond luxury models and be highly valuable to drivers. Cars be processed by the vehicles, in the premium brands to high-volume, will be able to quickly alert drivers to cloud and in between at mid-market models, the industry dangerous traffic patterns or help strategically located edge compute will soon reach a tipping point. The them find parking in crowded areas. locations that will capture data that volume of vehicle data generated does not need to be aggregated in will overwhelm existing cloud, A localized distributed edge the cloud. computing and communications computing cloud architecture infrastructure resources. speeds data processing by matching Consider the numbers: with a billion compute resources with the cars already on the planet, each Not all vehicular data needs to vehicles that need them. In the vehicle replacement represents a travel to the cloud. “Data has a context of edge computing for new connection. By 2025, 100% of nature of locality,” explained automotive use, the “edge” means all new vehicles, more than 100 Toyota’s Ken-ichi Murata, Chair of the hierarchically distributed non- million, will come to market the AECC, and Fellow and General central clouds where computation connected, according to IHS, Manager of Connected Cars at resources are deployed, and edge bringing new services and business Toyota. “The vehicles in Texas do not computing technology can be used models to bear. This next generation need data from New York. … That’s to design a flexible topology-aware of connected cars will need to be just a waste of network.” cloud infrastructure. Connected Cars: On The Edge Of A Breakthrough 3 Distributed edge computing on localized networks Cloud Data Distributed Computing Data #-$.) Data Local Data Integration Platform Reduces concentration of computation to shorten Inter-connects local cars to processing time Local Local integrate information Data Data Local Local Data Local Local Data Data Data Intelligent High Intelligent High V2C2V Driving Definition V2C2V Driving Definition !" Map !" Map Distributed Computing Distributed Computing Localized Network Localized Network Localized Network Splits data traffic in order to handle huge data flow Connected Car Connected Car Connected Car Connected Car (Source: AECC) This architecture creates an AECC Director Roger Berg, Vice thousands of companies that service opportunity for mobile network President for R&D in North cars and trucks, all of which can operators to host edge servers America at DENSO International benefit from automotive big data. running cloud-based applications. America, sees smartphones already Makers of roadside infrastructure are The cloud is dominated by a handful creating a need for a robust edge also part of the mobility ecosystem, of hyperscalers, but at the edge, network. “If similar needs from the since street signs, billboards and MNOs have more of a chance to mobility industry can be met by a stoplights can all potentially be participate, given their position as distributed computing network connected to the internet. owners of the network access architecture set up for smartphone points. MNOs are already apps, then the MNO has another Many different technology experimenting with this business vertical from which to gather providers are investing human and model, according to the AECC’s additional ARPU sources from the financial capital to learn how to Proof of Concept Committee. same network,” Berg noted. better serve the automotive industry. From the chips that As mobile operators invest in edge- connect devices and power servers based servers meant to host cloud The Distributed to the data centers that process applications, the goal is typically to Edge Ecosystem exabytes per day, IT hardware is support mobile subscribers. But integral to the connected car. In within a few short years, this These futuristic features will rely on addition to mobile network infrastructure could support not the cooperation of many different operators, fiber providers, satellite just mobile but also mobility, the ecosystem participants. Connected operators and Wi-Fi equipment connected car ecosystem that auto vehicles are supported not just by the vendors are eyeing the connected executives call the mobility industry. automakers, but also by the car opportunity. 4 WHITEPAPER Connected vehicles are supported by a heterogeneous ecosystem Wide-area Roadside cellular network equipment Fleet OEM Wi-Fi TelematicsTe Passenger Wi-Fi Telematics, ADAS, C-ITS Commercial vehicle for people transport Private vehicle (Source: AECC and AECC member Ericsson, 2021) The AECC has assembled a and Toyota, along with information Google. The consortium also partnership that connects and communications technology includes software giants Oracle and industries and brings together the (ICT) leaders AT&T, Dell EMC, Microsoft, which has recently made connected vehicle ecosystem. Cisco, Ericsson, Intel, KDDI, NTT two significant acquisitions of AECC members include automotive and Samsung. Data center leader companies that develop mobile technology heavyweights DENSO Equinix is also a member, as is network technology. Exploring the Market Opportunity Some companies will participate in and repurposed, and it will Network operators may have a role to the market solely by selling generate significant value for a play in monetizing automotive data, products or services, while others number of industries. especially if they host edge cloud will want to monetize the data servers to help process this data. But generated by connected cars. “I expect multiple sources of data … for operators, hosting applications at Ownership of that data is a will be used to build a multi-use the network edge is likely to be a complex issue, especially since case, multi-sector analytics platform more immediate opportunity. The drivers may naturally assume that for mobility data collected through AECC has identified five primary use some of the data their cars vehicles and related transportation cases
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