When Is a Car Not a Car?
In my last post I talked about companies that are digitizing themselves, and the critically important role of software. When we think about IT and software, we often think of large enterprises and software that resides on servers. But in this new age of the software-centric company, software can live anywhere.
Software is enabling companies to innovate rapidly, and deliver new features and capabilities to customers quickly and cost effectively. Silicon Valley automaker Tesla is widely recognized for transforming the automotive world with its game changing electric cars. But according to the company’s CEO, Tesla isn’t just a car company. It’s a software company.
“Tesla is a software company as much as it is a hardware company. A huge part of what Tesla is, is a Silicon Valley software company.” – Elon Musk, CEO of Tesla, Bloomberg Business, Oct. 2014
And the Tesla Model S is much more than a car. It’s a networked digital platform, enabled by software, for delivering new services and features to customers. Cars have had built-in software since the 1970s to control functions like fuel mixture, speed, and emissions.
Tesla has taken automotive software to extremes. Customers can get the latest features and upgrades delivered directly to their car, often without a visit to the dealership.
Using hardware already in the car, or in some cases requiring an additional hardware purchase which generates new value on the existing platform by promoting new feature purchase and installation, Tesla offers Model S P90D owners an upgrade to what the company calls “Ludicrous Mode,” which achieves 0-60 mph in 2.8 sec. And in October 2015, Tesla rolled out wide release of Version 7 of its software with Autopilot, paving the way for the company’s eventual entry into the autonomous car market.
All of this provides a better customer experience and gives Tesla a frictionless platform to offer new features after the sale, offering all kinds of opportunity for additional revenue and customer engagement.
This isn’t just happening in the auto industry. I’m out meeting every day with customers and partners who are using software innovation in financial services, retail, hospitality and other industries to speed and simplify the delivery of product upgrades, new features and new functionality.
Please join the discussion, and share your experiences and challenges as your company begins its digital transformation and captures the kinds of opportunities Tesla and other leaders are taking advantage of by understanding and leveraging the central role of software.