DETROIT - The green flag has dropped, and Detroit's automotive leaders are speeding around the second turn of the Internet racetrack.
So says the leader of global information technology giant Hewlett-Packard Co. Now that the automotive industry's doubters have become believers, automakers - in tandem with information technology and electronics companies - are ready to harness the next wave of value created by the Internet revolution, CEO Carly Fiorina told attendants at Convergence 2000 on Oct. 17 in Detroit.
'What I call the digital renaissance is the biggest event, the biggest transformation, the biggest challenge that any of us have ever encountered,' Fiorina said. 'It's also the biggest opportunity, especially for industries like this one - an industry that's demonstrated that you really get the revolution that's under way.'
Automakers and suppliers already have moved halfway into the new world, ditching old rules such as push marketing, and considering old enemies as possible new partners, she said. Physical assets are shrinking, and the power of talented people and proven brands are growing.
Here are some results: DaimlerChrysler's consumer Web sites allow shoppers to configure vehicles online and search dealer inventories; Ford Motor Co. is launching its new Volvo S60 completely online; and Toyota's Gazoo site sells CDs and books to customers in addition to referring them to dealers.
On the manufacturing side, the Internet is being tapped to speed up and streamline processes and slim down costs through such efforts as the Covisint online exchange.
Vehicles will be the next platform for new electronic services, many of them Web-based, Fiorina said. The coming era of e-services demands an always-on infrastructure reliable enough to support a relentless flood of transactions.
'Believe me, if it can be digitized, it will be,' she said. 'This means whole services interacting with other services - dynamically, on-the-fly. Whole chains of transactions will be electronically brokered, behind the scenes, while you do better things with your time.'
CASHING IN THE CHIPS
Anything with a chip can become a delivery mechanism, creating millions of new information appliances. With U.S. commuters spending an average of 1.5 hours per day in their vehicles, automotive companies stand to profit by transforming the car into a key customer interface for data transactions, Fiorina said. By 2005, UBS Warburg estimates consumers will spend $24 billion on car-based mobile services. Some estimates for the vehicle-based mobile services market predict revenue that could reach hundreds of billions of dollars.
As automakers, suppliers and technology companies race to capture a chunk of that revenue, they will work together to create the new technology to support the e-services vision, Fiorina said. Hewlett-Packard, for instance, already has a seven-year, multimillion-dollar agreement with Delphi Automotive Systems Corp. to embed its Chai products in a Delphi mobile multimedia product now in development.
The results of such partnerships can transform entire industries.
Said Fiorina: 'If one car manufacturer masters the model for turning cars into mobile portals, all other automakers have to follow.'