AUTOSAR (AUTomotive Open Standard ARchitecture) is a promising initiative that aims at establishing open standards for automotive E/E architecture. AUTOSAR compliant basic software ensures independency of the application software from the underlying hardware and allows modularity as well as reusability.
Three distinct layers are present with respect to the electronic control module business: hardware, basic software and application software supported by robust toolkit and this may help in developing different kinds of business activities.
From the established business models, we can determine the strategic options that could be offered for a Tier 1 supplier. And this can lead to innovative business model proposals and a migration plan in accordance with customer needs and value supply through system engineering activities, software products and professional services.
Siemens VDO is a supplier of embedded electronic systems and is a manufacturer of products with respect to engine management electronics and fuel injection, which are designed to reduce emissions and improve engine performance.
In the following years, hardware will be clearly separated from software (SW) with the arrival of the AUTOSAR standard. So what can be learnt from mature industries which have faced this kind of situation for decades and have continuously adopted a new business model in a rapid evolving environment ?
They have recently been confronted with the swell of revolution coming from Open Source software companies. In the later part of the report, the existing business models and associated strategic options to the upcoming situation in the automotive E/E architecture business will be confronted to evaluate innovative business model proposals.
Through the outlook of the business model, we can distinguish some common points and general characteristics. A business model is a method or approach towards a defined market aiming at a company's survival. Defining a business model comes down to answering the two basic questions:
-How to develop a sustainable and a profitable turnover?
-Where to position the company in the value chain?
The company's objective is to accumulate benefits from sales of the products and/or services in the evolving environment. In order to fulfil this goal, companies try to gain market share and extend their potential market which becomes more difficult to achieve.
Clearly, automotive players are often reluctant to accept radical changes in the traditional business model, which is why looking at other comparable business activities and especially those in the software industry can facilitate the definition for a business model. Thus, this should drive a better market acceptance when proposing software products and services as a Tier one supplier.
The commercial software customers do not have access to the source code which is closed and most likely protected by copyrights and/or patents. Moreover, commercial software companies do not grant the user any other rights beyond the use of the software package.
We can consider three main business models in the commercial software industry:
-Software product company
-Software service company
-Hybrid Solutions Company.
Software product companies:
In this category, products are highly standardized and companies excel in acquiring and leveraging generic product knowledge. Therefore, architecture level technology integration is important as well as supplementary products. Moreover, digital replication ensures minimal costs to mass-production.
Tags:Open Source software,AUTomotive Open Standard ARchitecture,automotive E/E architecture
[...] Clearly, automotive players are often reluctant to accept radical changes in the traditional business model, which is why looking at other comparable business activities and especially those in the software industry can facilitate the definition for a business model. Thus, this should drive a better market acceptance when proposing software products and services as a Tier one supplier. Commercial software definition The commercial software customers do not have access to the source code which is closed and most likely protected by copyrights and/or patents. [...]
[...] As this standard will enable developing and offering software components off the Shelf (COTS), AUTOSAR will split the current automotive business. Today's ECU business consists of selling "black boxes" and this may evolve into a market of different stand alone with products like: - ECU and Hardware components - Software modules (basic layers and Application / Functions) - System integration - Associated Services (via dedicated Tools Chains and specialized methodology) - Project management The additional services (like System Integration, Software Calibration or functional sectionalization at vehicle level) will increase in importance, as they are essential for a modular environment. [...]
[...] A Siemens VDO AG Commercial Offer for a Basic Software Platform When delivering a full BSW platform solution, Siemens VDO AG offers: - The Software modules (usually in object or .lib format) - The Technical documentations (User manual, tests plan, integration plan) - A set of tools to enable full development In the meantime, Siemens VDO AG is setting up an adapted commercial offer detailed as follows: - Software License Agreements - Some additional services (Integration support, Software Customization, Training & Hotline and Maintenance) This process of change of business models can be defined with close relationships with customers to determine their needs and propose to them suitable answers. [...]
[...] Customer needs Today, the automotive players are pushing forward the standardization through AUTOSAR in order to: - Improve quality and reliability of the E/E systems - Manage the increasing E/E complexity associated with growth in the functional scope - Improve their competitiveness, by easing the implementation of innovative functions, developed by themselves or by third parties - Decrease the development costs, via software component reuse. - Optimize and master the scalable E/E solutions Tools for vehicle validation, system modeling, simulation and supporting the function partitioning with data exchange will become more complex. [...]
[...] References Siemens VDO Communication "An open platform strategy in the context of AUTOSAR", Electronic systems for vehicles, Baden Baden, Germany Jean-Luc Mate, Vice President Siemens VDO AG Convergence 2004 Detroit - May 2004 Date 2005 Munich - March 2005 Usine nouvelle 2005 -June 2005 Business Models That Last: Balancing Products and Services in Software and Other Industries Paper 197 December Michael Cusumano www.fsf.org Perspectives on free and Open Source software, chap by J. Feller, B. Fitzgerald, S.A.Hissam and K. Lakhani Ed. [...]
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