Data is the new oil. That was the title of the presentation Intel CEO Brian Krzanich delivered at the Los Angeles Auto Show in December, and it's probably the most important thing you need to know about this week's big news from America's premier chipmaker: the acquisition of Mobileye, a leader in autonomous driving, for a cool $15.3 billion.
For anyone who hasn't been paying attention, the future of autonomous cars promises to be lucrative. As Krzanich himself said in the email he sent to Intel employees about the deal, autonomous driving is estimated to be a $70 billion "vehicle systems and data services" market by 2030. And the horsepower under the hood, as he noted, is computing.
"This acquisition essentially merges the intelligent eyes of the autonomous car with the intelligent brain that actually drives the car." Krzanich touted. The partnership will allow Intel "to accelerate innovation for car-makers" and deliver the "technology foundation for highly and fully autonomous driving."
The deal also reinforces Intel's new narrative -- namely that the chipmaker (which notoriously missed out on the mobile revolution) is more than a PC processing company. "We are a DATA company," as Krzanich emphatically put it in his email: "Our strategy is to make Intel the driving force of the data revolution across every technology and every industry."
"Intel would be foolish not to try to join this melee," McQuivey said in an email. Indeed, the market is rich with possibilities for data service providers.
"Expect the company to pull an IBM and become an autonomous vehicle consulting bureau and service provider, spinning up cloud-based resources that will ingest and analyze data from the vehicles, then spitting out not just better driving recommendations or even in-car services, but data infrastructure services that help municipalities track road use, store owners measure passing traffic, and bicyclists plan long-distance rides," McQuivey said.
Fast track into the future of autonomous cars
But is it a good deal? According to analysts, the Mobileye acquisition promises to make Intel a player in the future of autonomous cars. They point out that the Israeli company comes with a resume that boasts partnerships with major automakers and original equipment manufacturers; Mobileye's chips and algorithms previously powered Tesla's autopilot system. The company has a dominant market share in the Advanced Driver Assistance Systems (ADAS) technology space, which means that Intel now owns a leading player in adaptive cruise control, automatic emergency breaking and lane keeping. And Mobileye also has a 30% profit margin.
"Intel paid a very high cost for this company and what it did was it saved Intel time," Mike Ramsey, analyst at Gartner's CIO research group, said.
Beyond ADAS, Mobileye technology has rapidly evolved to support "the three pillars of autonomous driving -- sensing, mapping, and driving policy."
"Not only did Intel buy the technology, but all the existing relationships with all of the major automakers and it gave them a jump of five years -- and in this business five years is an eternity," he said.
Autonomous car future fueled by data
David Keith, assistant professor of system dynamics at MIT, agreed that as automobiles increasingly look like computers on wheels, the demand for computing power and data analysis in vehicles is reaching new heights -- and that data is the new oil in the ecosystem.
Driver assistance systems work by using machine learning to identify the environment they're in, Keith explained. In order to learn the environment, a huge amount of data is required -- indeed, millions of miles of vehicle travel data -- to train the systems to identify the environment and also make good decisions about how the vehicle should respond to its environment.
"Mobileye is clearly the leader in this aspect of the business as they have huge amounts of data that they have refined and have features that are very reliable," Keith said.
But the data management issues related to autonomous driving are far from solved. On a basic level, IT experts in the field have to think about where (and whether) all the data generated from vehicles gets stored, said Gartner's Ramsey.
"[IT experts] are going to have to think about whether the data should be analyzed on the vehicle first and then uploaded to the cloud, and how to generate value from it," he said.
Bob O'Donnell, president, founder and chief analyst at TECHnalysis Research, agreed that autonomous vehicles are pushing IT on many fronts. CIOs and other IT experts in this industry will have to think about distributed computing architectures and their implications, and about what sort of computing capabilities their companies have on the edge.
"Autonomous cars serve as a poster child example of the kinds of multi-tiered analytics and the need for very strong edge based computing because that's where you should have the ability to react to real-time data coming in." O'Donnell said.
And CIOs watching this from outside of the industry will want to be ready for what happens when all of that vehicle-based data becomes available to their industries, McQuivey said. "If you don't know how to follow website traffic and understand what it means, how will you be able to follow actual on-site traffic in a meaningful way?"
The (un)reality of full autonomy
While the technical capability of autonomous vehicles is moving pretty quickly, the commercialization prospects of the technology are more uncertain, Ramsey believes.
"We are certainly sneaking up on Level 4 autonomy," he said. "But the real question is: When do we get to full automation?"
"As SAE [Society of Automotive Engineers] defines a Level 5 autonomous vehicle, a fully self-driving vehicle needs to be able to take us from Point A to Point B under all use conditions; 'ALL' is a big word," Reimer said.
But Reimer sees deployment of Level 2 and Level 3 technologies "growing even further over time." Level 4 deployments in very select ecosystems, perhaps in a city in good or reasonable weather, is something that is theoretically feasible in the next 10 years, he added.
But don't expect dealer showrooms to look much different in the coming years. The smart vehicles that will continue to evolve and dominate the market place globally will look much like those today only with increasing levels of automated technologies available, Reimer said. "So while the automotive ecosystem will change over the coming decades, it's not going to forget its past instantly. It's not going to be a revolutionary change … we are going to go through an evolution."
Whether Intel has an inside track to that future remains to be seen.
CIO news roundup for week of March 13
While Intel buying Mobileye drew discussions about the future of autonomous cars this week, here's what else made news:
Russian officials charged in Yahoo hack. The U.S. Justice Department has charged two Russian intelligence officers with facilitating the breach of 500 million Yahoo accounts in 2014. Two hackers were also charged in the 47-count indictment that includes charges of conspiracy, computer fraud and abuse, economic espionage, theft of trade secrets, wire fraud, access device fraud and aggravated identify theft. The Russian government used the information obtained in the breach to spy on targets that included White House officials, business executives and an airline, according to the indictment. Details of the breach were not announced until 2016, and threatened a multi-billion dollar deal to sell Yahoo's core business to Verizon. Yahoo CEO Marissa Mayer took a share of the heat after the breach was made public. Earlier this week Yahoo named board member Thomas McInerney as Mayer's replacement once the Verizon deal is finalized. This announcement generated additional controversy for Yahoo because McInerney’s compensation includes a higher base salary with annual cash and stock bonus that total at least double the amount Mayer received. It remains unclear what Mayer's role will be with Verizon or with Yahoo's remaining assets -- to be renamed Altaba -- after the sale, slated to close in the second quarter of this year.
Tech companies unite against travel ban. A group of 58 companies, including Airbnb, Lyft and Dropbox, joined together to protest the revised travel ban on majority-Muslim countries that the Trump administration released earlier this month. The companies submitted an amicus brief in support of the lawsuit filed by the state of Hawaii requesting a temporary restraining order on the executive action. In the brief, the group stated that the ban would "inflict significant and irreparable harm on U.S. businesses and their employees." The revised travel ban was put on hold Wednesday after a federal judge ruled in favor of the state of Hawaii's request for the temporary restraining order. In February, technology companies filed a similar amicus brief to protest President Trump's original executive order on immigration.
More IT pros receive security training. As cyberattacks and data breaches continue to make headlines, a new study from Pearson VUE finds that enterprises are investing more in cybersecurity training. Among 6,605 U.S.-based IT professionals surveyed in the last year, there was 48% increase in those taking security training and a 60% increase in those taking security exams compared to prior year, the study found. Employers funded the security training for 53% of respondents, while 26% of respondents said they paid for it themselves. Enterprises are scrambling to find qualified cybersecurity personnel to face additional cyber threats: In a recent survey conducted by ISACA, 55% of organizations reported that open cybersecurity positions take at least three months to fill, 32% said they take six months or more, and 27% said they are unable to fill cybersecurity positions.
Senior Site Editor Ben Cole contributed to this week's news roundup.