Toyota's cloud city

DALLAS — One of the most striking things about Toyota Connected, the automaker's year-old automotive data-harvesting startup, is its location — not on the sprawling new North American headquarters campus that Toyota just spent $1 billion putting together, but one mile away in its own office space.

Surely, Toyota North America could have spared some of its 2 million square feet for the connected-car unit and its planned 200 workers. But keeping the operation contained wasn't what Toyota executives had in mind.

"We definitely wanted our own culture," said Zack Hicks, CEO of Toyota Connected, a global operation that reports directly to headquarters in Japan. Indeed, employees enjoy an atmosphere that's more Silicon Valley than North Texas, with an open floor plan, catered lunches and a video game room.

"That was some of the direction [Japan] gave me when we started this company," Hicks told Automotive News. "They said, 'Don't overlay the big company processes on this new startup. Let's create our ability to move faster.'"

Hicks and his team of 66 employees so far are fully aware of the need for speed as automakers scramble to convert their mountains of data into intelligence that can power in-car services, autonomous-vehicle technology and partnerships that stretch beyond the auto industry.

At Toyota, that effort has meant building a "global cloud ecosystem" and a "mobility services platform" that are flexible enough to accommodate services people haven't even dreamed up yet. "Think of the cloud as the infrastructure and the platform as the layer that allows other ​ groups to plug their applications into," he said.

Toyota Connected has already created an important income stream by managing global cloud services — which incorporate networks of remote servers to transfer, store and process data — for corporate parent Toyota's vast business operations, Hicks said.

And soon the big vehicle data streams will begin. The 2018 Camry launching this month will be the first vehicle sending data to Toyota Connected for owners who opt in. New models will plug in as they are introduced into the market.

"I think at Toyota we're going to be ahead," Hicks said. "Toyota is the first one to actually build a company around taking that data and unleashing the power of what it can be at its full potential."

It was General Motors that pioneered so-called concierge services — such as automatic crash notification and roadside assistance — back in 1995 with its OnStar telematics system, which gave it an early start in gathering vehicle data and branding the services built around them.

GM remains a leader, although improvements in data transmission speed, connectivity and processing power have opened up possibilities for more personalized services that all automakers are just beginning to explore.

"The car companies are trying to figure out — once you connect entire fleets — how to get past what they've done now, get data from vehicles and contextualize and personalize it," said Mike Ramsey, research director at the consulting firm Gartner.

"There are very few examples of this that are live with the full range of services," he said. "Toyota is not behind really. They're in about the same spot as everyone else."

Hicks said Toyota Connected has some clear ideas on what harnessing this potential might look like for a Toyota or Lexus driver.

"I know how fast you are going down the road. I know what your trajectory is. I know how many people are sitting in the car. I know what music you're listening to. I can give you services based on that," he said.

"So, when you're in the car in the morning, I know that you are going to be late because of traffic and if I'm connected to your calendar I can just say, 'Hey, do you want to let the meeting organizer know that you're running late? And by the way you need gas, and here's the cheapest place on your route,'" he added.

Monetizing that capability isn't yet a priority. There are, however, businesses in which Toyota Connected can make money, such as fleet management and telematics-based insurance. Hicks said Toyota Connected has also developed its own car-sharing software platform and will launch a service with a partner shortly.

Toyota Connected certainly isn't alone in going after those services, but Hicks thinks it can be competitive.

Hicks said Toyota won't be selling driver data to third parties, and owners would always have to opt in to services such as telematics insurance in order for a third party to obtain their data.

"If we ever break that trust," he said, "you're never going to buy a car from us again."