Maturing ITxPT marketplace part 2(3)

Global phenomenon

There is a global movement towards subscribing to solutions and paying for access instead of buying. This is more and more common in business-to-business agreements, but it isn’t uncommon for us as private citizens either, to have such relations with companies like Microsoft, Adobe, Netflix, HBO, Storytel and Spotify for example. Instead of owning software, films, books or music, we subscribe to access, which means we always have the latest version, and we don’t have to worry about when to upgrade or update. It is taken care of. We also avoid investing a lot of money in a service that we later might realize we don’t need, or that it has grown obsolete as a result of technical development or change in demand.

Complimentary hardware

There are other services, like home internet connection, where the hardware often is complementary to the service. The more IT for public transport pivots towards software and service within a standardized environment, the more common that type of arrangement probably will become. The problem with a model like this is that the system suppliers usually don’t have the financial muscles to carry the burden of the initial hardware investments. One possible solution is that the basic hardware needed, like the gateway and other vital components are installed and supplied by the vehicle vendor from the get-go, together with standardized connection and access to the FMS and possibly also CAN. This would make it very cost-effective to install the hardware under controlled circumstances. The vehicle manufacturers, being much larger entities ordering larger quantities, can reduce costs significantly per unit compared to the much smaller companies that are the system suppliers of today.

How do operators and authorities benefit?

For public transport operators and authorities, to subscribe to a service, means access to constant development with an ever-evolving dynamic solution, and adaptations to customer- and client demands as well as always being up to date with the latest technical development. Another important aspect is a high uptime percentage. This frees up resources from a complicated process that isn’t a PTO’s or PTA’s core business. The more users a standardized solution gets, the more cost effective it becomes in the long run, since software solutions are scalable or at least semi scalable, which means they cost less to reuse than they cost to develop in the first place.

The evolving Internet

Internet and especially Internet of Things, will drive the development towards growing standardized IT systems with an increasing number of connected devices, since there is so much to gain from adding more users to a network. According to Bob Metcalf, often called the “Father of Ethernet,” the effect of a telecommunications network is proportional to the square of the number of connected users of the system (n2). This is called Metcalfe’s law.

From Electronic Design article:

“The new paradigm of the world today is “always connected”, and that no longer refers only to us humans. It is true for more and more things as well. The old way of using internet; the “Internet of Communications” has since quite a while been giving place to the internet that in the future will dominate the internet traffic; “Internet of Things,”. We live in a world where even the most basic devices are becoming network-aware. We’ve already seen how the Internet of Communications changes the way we work. The Internet of Things will change the way we live.” Mike Fahrion, Electronic design article.

This is also true in smaller networks, like networks on a vehicle. The more systems interconnected on the vehicle, the more value the network delivers. This, together with the fact that it becomes cheaper and cheaper to connect devices and that devices become increasingly smarter, makes it inevitable that the networks onboard and off board will grow and evolve in an increasing speed. There is no way of knowing what kind of solutions that might be available and in demand eight to ten years from the manufacturing of a vehicle. The system therefore must be as dynamic as possible to stay updated.

“Proprietary protocols touted by shortsighted vendors also devalue networks. In almost every case, though, those proprietary silos have ultimately been toppled by the economic reality described in Metcalfe’s Law. As the network grows, and as data is made to move more efficiently across it, the more value it provides. Those proprietary protocols were only getting in the way. Now let’s add Moore’s Law to the equation. Moore, a cofounder of Intel, observed that the number of transistors that can be placed inexpensively on an integrated circuit doubles roughly every two years. Metcalfe’s Law shows us that expanding the network increases its value. Moore’s Law tells us that while capability steadily increases, the cost of those capabilities continually drops. Together, they mean that continued network expansion network is inevitable. The day is coming, and it isn’t far off, when it will be technologically feasible and economically worthwhile to network-enable even the simplest of things, right down to the light bulb.” Mike Fahrion, Electronic design article.

In buses this is in a sense already a reality, with connection to FMS and CAN.

Until next time

In the second part of this article we have covered the global phenomenon from other industries with service subscription, complimentary hardware and the evolution of Internet of Things.

The third and last part of the article we will round up by making a stab at predicting the future of the marketplace, where the integrator role might become obsolete. We also take a brief look at exciting things happening in Oslo that points to a use of vehicle data that exceeds the boundaries of the public transport sector.

Disclaimer: The content of this blog post is the author’s opinion and doesn’t reflect the opinion of any other person or organisation.