About a week ago, we were informed of the sale of Argus, an Israeli start-up in the business of cyber-car security, to the German company Continental, for a ticket price in the hundreds of millions of dollars. This deal is not surprising; Israel has become a technological powerhouse in the field of vehicles, most notable for the development of Mobileye (which was sold to Intel a few months ago). The Israeli venture funds have become very active in the field, and there is no doubt that we will see more interesting deals between Israeli start-ups and global car manufacturers.

In my opinion, this deal symbolizes another trend: the convergence between the automotive industry and the IT industry (and the software industry as well). As part of this convergence, classic IT issues such as cyber, cloud, and Big Data, are becoming very relevant to the automotive industry. From our point of view, as an Israeli venture capital fund, this trend enables us to invest in companies operating in this field, which take advantage of Israel’s superiority in the IT space. We at Glilot have also invested in such a company, Upstream, which combines cyber and Big Data in the cloud with the automotive world. I am certain that this trend will continue, and that we will see many other Israeli companies succeed in this field. In this post, I will do my best to explain the importance of such technology in the world of vehicles, and their impact on the quality, security, and cost of the driving experience.

The global automotive industry is currently undergoing a major shakeup — with the magnitude of a major earthquake, no less. This is a huge industry, one that generates approximately $10 trillion a year (!). 140 years ago, Nicholas Otto invented the internal combustion engine, and since that moment, the industry has hardly changed. The basic technology, ownership structure, financing, and operation of the vehicle have not changed since 1876. This earthquake-sized shakeup consists of three dramatic changes: First, the transition from a liquid fuel engine to an electric motor; the second, the shift to a shared vehicle model (Uber and the like); and the third, and most important, the transition to autonomous vehicles. It is difficult to estimate when and how these changes will affect our lives and the automotive industry, but it is already clear that the impact will be revolutionary. Large, well-established companies will disappear, and new, young companies will replace them.

It will take a few more years for autonomous vehicles to become commonplace, but another phenomenon, connecting vehicles to the cloud, is already here. Today, 30 to 40 percent of vehicles are already connected to the cloud as soon as they leave production. In addition, approximately 60 million commercial vehicles have installed a plugin that connects them to the cloud after production (connecting them to a fleet, or as part of a security system). The forecast is that by 2020, a quarter of the world’s vehicles (approximately 250 million) will be connected to the cloud. In addition, the V2V (vehicle-to-vehicle) communication standards, which will be coming into effect in the next few years (according to the forecast, by 2020) will transform most of the vehicles into computing platforms that communicate with one another continuously.

This plugin itself is relatively new, but the amount of information flowing through this channel is already quite profound. The vehicle is a 40-processor platform with dozens of sensors that collect information and data, which can be analyzed in real time: engine speed, engine temperature, acceleration, voltage, and more. Most of these events are reported to the cloud when a connected car sends approximately 25 gigabytes of data to the cloud at any time. For the first time in the history of the automotive industry, it is possible to track and store information after millions of such events occur at the level of a single vehicle, and at the level of a whole fleet of cars. But what do you do with all of this information in the automotive industry? Classical processing methods will not work here — there is such an enormous amount of information and the introduction of this technology is so significant that classic methods are no longer relevant. Here is where the Big Data techniques enter the picture. These techniques have become increasingly common in recent years, especially for cases like these. Running Big Data algorithms on the information continuously produced by a single vehicle may provide unprecedented insight into the individual vehicle and the entire fleet, creating an opportunity to change the driving experience and make a significant contribution to the welfare of the passenger, and even to their personal safety. Contrary to the widespread autonomous vehicle vision, this is not a future revolution we must wait for. There are already companies in the market that develop and distribute such technology. Even in Israel, a number of startups that analyze vehicle data in the could have emerged; Upstream Security and Otonomo are two great examples.

How can such information help us? Here are some examples:

• Security — Was the vehicle stolen? Is someone trying to steal the car? Is someone trying to take over the vehicle remotely?
• Driving safety — Does the driver drive safely? Were they driving recklessly? Is the driver under the influence of alcohol (or other substances)? Has anyone been forgotten in the car? etc.
• Problems and remedies — Is there a faulty component in the vehicle? Is the component going to break down?
• The relationship between the vehicle brand and the customer, improving the driving experience —How is the driver use the vehicle? The manufacturer can update and adjust the driving experience in real time.
• Fleet management — Fleet tracking, trends identification, fraud preventing, etc.

In the past, the relationship between the consumer and the car manufacturer was very limited and based on a single transaction. In the very near future, car companies will become service companies; they will provide us with various services through the cloud and will play a more significant role in our driving experience.

As with any technological revolution, this revolution also comes with a risk. Our vehicles’ information may be exposed to negative agents who may use it to cause harm, to access and steal additional information, to steal our identity, and to even steal the vehicle itself. As we have seen on other fronts, the connected vehicle and relevant information will be subject to various kinds of cyber-attacks. The car thieves will develop matching capabilities, and start stealing cars from the cloud. Meanwhile, defense will become more sophisticated, as we’ll be able to use advanced defense technology.

This revolution is big, and it is already beginning. Even before the arrival of the autonomous vehicle, we can have a safer, more enjoyable, and personalized driving experience. Car care will also be cheaper and more efficient. All of this will be due to a smarter analysis of the data the vehicle already knows how to provide.

The pessimists among us will say that this revolution brings with it a great danger. Those who succeed in getting a handle on this data will be able to cause great damage: from stealing cars using information found in the cloud, to causing actual harm to the lives of people traveling by car.

This, of course, is true, but if we can protect ourselves against such threats, we can benefit from technology that will deliver a major upgrade to our driving today.