Data, the New Oil!

Walk through of benefits of big authenticated data!

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In one of my blogs, I had used a statement by Mukesh Ambani, “Data is New Oil” My friend Ajit suggested that I elaborate on the statement. So here we go!

We have been using oil and Petroleum products, extensively during last century! Initially, the approach taken by westerners was flamboyant! They went to the desert land of Arabs and extracted oil at a decent profit. In early 70’s in the last century, Arabs realized that they were sitting on a goldmine and rest as they say is history! From desert kingdoms, where the countries were mainly run by expats, these countries have become rich countries and are sitting on a mountain of money! This was all due to correct commercial exploitation of Oil as a resource and later squeezing non-oil producing countries!

Current century is the century of data as we have already started observing. A lot many things happen digitally and there is tremendous amount of data that is getting generated and obviously being stored somewhere! The country, the businesses which will harness the power of data, already available, will become leaders in their own field. How to exploit this data? For doing any digital transaction, authentication is mandatory. We started with passwords, spoken word and so on for authentication. Indian government had a foresight to start creating a database of people in India and issuing digital identity to people called Aadhar. Aadhar has Unique identification which is biometric. This is THE ultimate method of authentication. Aadhar UID is the largest such data of population with authenticated identities in the world.

Due to this authentication method, many things can be done digitally. First and foremost, what Aadhar has achieved is to bring large number of poor people in India into formal system; this allowed these people to open zero balance bank accounts, to start with. Large number of populace has been outside the formal system all along, because of non-inclusion! Non-inclusion was because these people did not have any formal identity! The inclusion will increase GDP as transactions made by these people will get added in the formal system. The same poor people, get subsidies from the government. There has been extremely high leakage of subsidy as this money did not reach the right people. In the system when black money gets generated, it goes out of circulation and formal economy gets affected. With Aadhar, subsidies go directly to people’s bank accounts.

These are some of the effects of large amount of authenticated data being available. There are more advantages of authenticated data. During GST returns filing, it is mandatory to share that month’s sales figures with authorities. Now government will link this data from GST returns to Income Tax returns filed. Naturally, the values must match. If they don’t, the tax evaders can be easily trapped. This change will happen because of linked data. According to some estimates India’s GDP is much higher than what is seen on paper; this is because cash or black money transactions remain outside the formal system. Black money is the money on which income tax is not paid. When all transactions happening in India become above board, real GDP figures will be known. Data is the way for that! GST data will be huge data but putting it to proper use is going to be the key to success. Initially people required PAN cards for some financial transactions but there was no real authentication done while issuing them. With the result that people had several PAN cards making it easy to cheat. With Aadhar linking of PAN cards, each person can have only one PAN card. Power of authenticated data!

What is being linked to Aadhar? Bank accounts & FD’s, LIC and other policies, Mutual fund investments, Cell phones and many more things. These instruments are used by all people irrespective of their status whether they have black money or tax paid money. Authorities can link all this data from huge data bank and link it with Income Tax data base. I need not elaborate what will happen as the result of this linking.

Ambani’s cell phone company Jio has sizable data of their subscribers. Subscribers are registered using Aadhar card. Jio has plans to compete with Amazons of the world with a different business model. It is said that not even 10% of population buy their stuff on the net! Jio will provide discount coupons to the subscribers for local shops, within their cities and preferably in the vicinity. These subscribers will go to the shops using their cell phones & linked coupons will buy things they want and pay the vendor. These vendors will be local grocers, fruit wallas and will compete with Amazons through Jio. The vendors phones and customers phones are linked via Aadhar to handle the payment part.

Another business process that is being tested in China which can be adopted with or without modification in India. Someone wants to buy stuff from a vending machine. After items are selected, the person gives iris scan. This scan is linked to Aadhar card to Credit Cards (if they survive technology onslaught) or bank account. Payment is done using iris scan. Can it get easier? Just imagine that your Iris scan is going to be your credit/debit card, online banking and wallet all rolled in one!

Already there are apps like True Caller! If you have True Caller installed on you cell, any unidentified call received is checked by the app on huge data, thereby displaying you the name of the person calling you!

Another large data that is captured these days is the data from cars. Cars these days have a lot of censors to track and send the data to servers. Such sensors are now functional on normal cars like VW Golf also! High end cars are even more data hogging. What do we do with this data? I will give a couple of examples. Vehicles performance like engine performance, oil levels are captured. In case of some issues in the car, diagnostics is done quickly as data is always available. In VW Golf, if you get flat tyre, and someone else is using your car; your registered cell phone will receive a text message “Your front right side tyre shows reduced air pressure”! There are lot of such messages received when something goes wrong with the car. Driverless cars and EV’s are next in line. They will all capture very large data from all cars. How this data will help? Diagnostics, design improvement, performance fine tuning. Important thing is nobody must go and capture data!

I feel that, in India, data is going to help reduce corruption and black money due to Aadhar linkage. Data has already brought large number poor people in the formal financial system. Data will give true picture to the planners of the nations. All this will allow the nation and thereby people to prosper. The correctly authenticating data is the way to go forward. Looks like iris scan is the proverbial golden wand to do it!  On the technical side data will allow new business processes to evolve; some of which don’t even exist today. Speed of doing research and analysis will become fast. New products, new methods, new medicines will get evolved much faster. All the speed and accuracy due to authentic data will be a real boon to human race!

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Auto Industry 2040?

Auto Industry Circa 2040. where will it be?

WOW! MMG! DISCO! These could be names of some of the leading auto component industries in the year 2040! Why have I selected the year 2040? Simply because everyone is talking of this year for introduction of electric cars in a big way; from this year onwards, the real downward trend in manufacture and use of IC engines in the cars, as we know them today, will begin. I am simply assuming that the cars will be available, similar to the cars of today. Masses of cars will be driven by humans, they will have a steering wheel and a power plant/train to give them. They will have some form of braking, electrical system handling various functions, wheels and body with fuel storage area, air conditioning and so on! Things inside could be fancier with more and more entertainment, superior navigation abilities, drivers may become more stress free as cars systems will be able to understand many things and may take over some functions from humans. Internet of things (IOT) will allow things that are not even thought of today.

This is part of evolution of human race but this could be culmination of major change that is taking place currently. The “new” car industry is putting its toddler’s steps today. Evolution is nature as everything in this world is always evolving! Basic driver for these changes is computers and computer chips. The car industry will be using different chips and will capture lots of data data generated by various systems. This data will be in endless loop and will allow cars to function more and more efficiently.

What will be the difference in the cars of today and those in 2040? Today’s power plant, the Engine & Drive train will be replaced by Batteries and Motors. Today’s drive train, gear boxes etc will be just be not there. The exhaust system as is known today will be simply not be needed because there will be no IC engine, both Petrol and Diesel. Gear box and the whole system is really not needed because their function can easily be handled by Electric Motors. Even today, in electric cars, there is a single gear which reduces the RPM to what is needed to drive the car at allowed speeds!

There are many companies that are manufacturing the components that are discussed above. These components may become redundant over a period of time due to introduction of electric cars. Bosch, Denso, Continental, Valeo, Aisin Seiki are some of the major players that manufacture the cluster of these components. These companies together manufacture products worth US $200/ billions every year.  These products may comprise of 40% to 70% of their current turnover. The giants must be already studying the questions that have come to my mind. How are they handling these questions? I am sure it’s a tough call to all of them though they have the where withal and deep pockets to handle difficult situations. Some have started making navigation products, some are making parking assist, camera -related systems. But suddenly new names are being heard in these discussions as vendors. CISCO, NVIDIA are some of them. Some are direct vendors to car makers and some are vendors to components manufacturers.  Where is the real scope for new development and business? Battery packs, battery charging technology to increase per charge distance that the cars can travel today! All other developments that are computer related can also happen in IC engine cars too! TESLA is already building a giga factory for their Battery Packs! So will the “new” component business be taken over by Car Manufacturers? Suzuki, Toyota and Toshiba are coming together in India for big battery plant! What happens to smaller manufacturers of these components? Will they survive the major change? Will “WOW! MMG! DISCO!” replace them? Only time can tell.

In car making, after a long time, new name TESLA, started coming into prominence. TESLA came mainly for the new product offering. It appears that technology like fashion goes round! Till first two decades of last century, IC engine based transportation was not very popular. Trains used steam, cars used electric power plants; but battery technology could not catch with the then needs. Hence IC engine cars and trains became popular. From the existing car manufacturers, some are already manufacturing electric cars more than what TESLA is producing. On top of that they have a running profitable business producing IC engine cars. But one thing is for sure they have the humility and know where they lack. Look at what Volkswagen Brand CEO Deiss has to say about TESLA! 

VOLKSWAGEN brand CEO Diess has said that VW which manufactured 5,987,800 cars last year has to catch up with Tesla which produced 83922 cars last year. “Tesla belongs among the competitors which has abilities that we currently do not have,” Diess said in the interview with “Inside”, a publication for VW employees. Around half of Tesla’s engineers are software experts, while at VW’s core brand it is a much lower proportion, Diess said. Tesla has good electric motors, a fast charging network, autonomous driving technology, internet connectivity, and a new approach toward vehicle distribution. “This shows that we need to significantly improve. We can do this. We measure ourselves against Tesla quite deliberately. Our goal: Using our abilities not just to catch up, but even to overtake,” Diess drives an electric VW Golf.

 Current giants have ready infrastructure and eco system to make and sell millions of cars. They of course lack Electric car eco system as mentioned by Diess above. Their main struggle will be recharging stations for electric cars; but TESLA is also going face the same problem! The question arises if TESLA, a loss making company, a start-up, survive? Let’s look at the startups from the Silicon Valley and the west coast, who really made it big in computer industry sunrise era. Google, Facebook, Microsoft, Apple they all became very big with the products/services that never existed before. TESLA is pitted against the giants for making existing products where the main “driver” is only a different technology! That’s a huge disadvantage. Fighting against giants, who have woken up a bit late, like Mercedes, Honda BMW, Toyota, GM, Ford, Fiat, Hyundai is going to be very very tough for TESLA! Some of these giants are also going to suffer or may merge! My take,Continental TESLA may cease to exist  by 2040 or even earlier as it is known today! Takeover? Maybe!