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What the Automotive CIO Needs to Know

About Open-Source Platforms
Published: 22 October 2019 ID: G00441828

Analyst(s): Pedro Pacheco

Open-source platforms are commonplace in the IT world and are now

spreading across the automotive sector, reaching product areas beyond
software. Automotive CIOs must define strategies to mitigate the risks and
leverage the benefits brought by these collaborative platforms.

Impacts
■ Open-source platforms offer automakers significant benefits like development cost reduction
and shorter time to market but provide CIOs less control in terms of roadmap definition.
■ Widespread adoption of open source will make it harder for car manufacturers to differentiate
their products and services from the competition’s.
■ Open source brings specific risks in terms of security, quality and service. The benefits in cost
savings and time to market create even greater vendor lock-in than general licensed products.

Recommendations
Automotive CIOs working to advance manufacturing industries’ digitalization must:

■ Accelerate progress on the company’s mission-critical priorities by joining an open-source

platform. Establish a tight governance system to enable greater control over key aspects like
security and quality.
■ Ensure a differentiated value proposition for your solution by shifting from product/service
development to designing holistic and integrated customer experiences.
■ Counter the risks of open-source dependency by devising such specific strategies as using
different open-source platforms in parallel, planning for fast platform replacement and
developing a hybrid platform.

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Strategic Planning Assumptions

Through year-end 2022, the percentage of open-source solutions in IT portfolios overall will increase
by a compound annual growth rate (CAGR) of 30%.

Through year-end 2022, less than half of mission-critical open-source IT investments overall will
achieve substantial cost-saving benefits over third-party commercial alternatives.

Analysis
Open-Source Technology and the Automotive Industry
It’s important for automotive CIOs to understand what open source is — and what it isn’t. Open-
source software isn’t the same as shareware, freeware or public-domain software. Unlike those
forms of software, open source is always compatible with definitions established by the nonprofit
Open Source Initiative, which — though it has no legal authority — maintains a list of “approved”
open-source licenses.

Open Source Defined

Gartner defines “open source” as a model for the development, support and
distribution of software that encourages and, in many ways, enforces community
stewardship of technology. Open source is defined by a specific license scheme,
enabled by broad collaboration among developers and users via the internet and
empowered by large and diverse communities that leverage open innovation
principles.1 In industry sectors like automotive, open-source principles have begun to
be used in other areas, like cloud platforms and vehicle platforms, so the term now
extends beyond software alone.

Open source presents both benefits and risks for any enterprise — including auto manufacturers.
Open source for software, industrial Internet of Things (IoT), modeling tools and other areas holds
the promise of time and cost savings, increased flexibility and greater innovation (see “What
Innovation Leaders Must Know About Open-Source Software”). But it also introduces technical,
security and legal risks that CIOs need to address. For these reasons, Gartner has identified the key
impacts of open source on the automotive industry — and a set of associated recommendations for
CIOs (see Table 1).

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Table 1. Examples of Open-Source Initiatives in the Automotive Sector

Open-Source Platform Type Owner Reference

MEB Body and powertrain platform for electric VW Link

vehicles

Android Open Source Project In-vehicle infotainment operating system Google Link

Automotive Grade Linux In-vehicle infotainment operating system The Linux Foundation Link

VW Industrial Cloud Cloud platform for industrial IoT devices VW/AWS Link

Open Manufacturing Cloud platform for industrial IoT devices BMW/Microsoft Link
Platform

Sphinx Integrated modeling tool environments for Eclipse Foundation Link

several modeling languages

Open Source Research Simulator for research in autonomous drive Toyota Link
Simulator

AUTOSAR Open-source software architecture for Independent Link

automotive ECUs organization

Source: Gartner

In the auto industry today, open source extends well beyond software. One example: Volkswagen
(VW) recently opened its Modular Electric Toolkit (MEB) electric vehicle (EV) platform to other
carmakers.2 Ford decided to adopt the MEB platform, despite its being a global rival with VW,
because it recognized the need for rapid reductions in the cost and timeline of EV development.
Vehicle platform sharing was already common in the industry but it happened under very rigid
agreements that drew sizable investments and resources from all partners. In this case, VW simply
charges a basic manufacturing cost for each car using MEB. The aim is purely to create economies
of scale as quickly as possible. The cost-effectiveness of this model even enables startups like
e.GO Mobile to adopt the VW electric platform. This wouldn’t have been possible for a startup
under the rigid agreement models that were previously traditionally in place among carmakers.

The simplicity of EVs, compared with internal combustion vehicles, also facilitates cross-sharing of
key components among companies. For instance, an internal combustion engine has some 150
moving parts while an electric motor has only about dozen components in all.3

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Figure 1. Impact Appraisal for the Open-Source Automotive Sector

Impacts and Recommendations

Open-Source Platforms Offer Automakers Significant Benefits but Less Control for
CIOs
Open-source platforms offer unprecedented levels of collaboration among automotive players,
enabling faster progress in mission-critical areas like the development of connected, autonomous
and electric vehicles. CIOs of automotive companies need to set aside traditional thinking and pride
in their in-house engineering capabilities. Several automakers have already adopted open-source
platforms to make faster progress in critical areas. Open source can also enable automakers to
encourage open innovation and exploit new ideas and do it at lower cost by drawing a greater pool
of participants. Open source already represents 50% of all software code produced around the
world today, so it will be difficult to ignore.4 Car companies that do so may very well struggle in
critical areas.

From a CIO’s perspective, the most important caveat about open source is the level of control over
how the platform is developed and updated.5 For instance, open source is a platform you haven’t
created and you don’t have the last word about updates, roadmaps or security patches. At the
same time, parts of the organization may not understand open source or how to work with it.

Effective management is a key factor in the success of any open-source platform. However, Gartner
research shows that most enterprises aren’t doing this adequately. Gartner client inquiries suggest

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that at least 60% have some type of documented open-source software policy in place (see “What
Innovation Leaders Must Know About Open-Source Software”). But at least 75% of those programs
aren’t yielding “effective” results because they neither reduce risk adequately nor maximize the
potential value of open-source investments.

Recommendations for CIOs

■ Identify areas of weakness that threaten the success of your mission-critical priorities and join
open-source platforms that will enable your company to achieve its goals.
■ Enhance the management of your open-source projects by training your development
organization in open-source governance and operational management. Identify and designate
individuals who can lead your open-source effort on a project-by-project basis.
■ Create a technology selection mechanism that avoids bias for and against potential candidate
packages versus in-house or third-party options.
■ Minimize the likelihood and impact of catastrophic open-source failures by establishing a
governance program that upholds high standards of quality and security. This program must
include all key stakeholders, including enterprise architecture, operations, procurement,
development, security and legal organizations.
■ Establish a clear chain of command for the request, analysis and approval of all open-source
assets. For critical applications like autonomous drive, players adopting open source should
work closely together in setting up standards and working together in the approval of software
updates.

Widespread Adoption of Open Source Will Make It Harder for Automakers to

Differentiate Products and Services
The main benefits of open-source platforms have already been mentioned, but there are also
definite downsides. Having different companies — including fierce rivals — on the same platform
creates a problem of differentiation. Smartphones powered by Android OS offer a good example:
There are differences between Android devices from different brands but there are also clear
similarities in graphics and functionality — even haptics.6 Android Auto — like its Apple equivalent,
CarPlay — already makes one car’s in-vehicle infotainment screen look like any other’s. In addition,
smartphones using the same OS already allow users to carry settings and files when changing to a
device from another brand. This is detrimental to the customer’s hardware loyalty. The same parallel
could be extracted for cars, where similar possibilities would make it easier for customers to change
to another brand.

Open source creates a conundrum for carmakers: how to succeed in a world where everyone is
plugged into the same platform. The answer is to focus less on product specifications and more on
the experience. From the moment cars use the same mechanical platform, similar human-machine
interfaces or the same autonomous driving technology, brand value proposition must offer a holistic
and differentiated experience. This experience must encompass all customer touchpoints — from
advertising to vehicle end of life. Although automotive CIOs clearly can’t execute this entire strategy

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on their own, their knowledge of open-source software means they are in the best position to alert
the organization and allow it to steer product development in the right direction.

Carmakers must move from selling cars to offering memorable moments to their customers. Many
of these moments don’t necessarily have much to do with the car itself, but they should remain true
to the brand’s values. Some premium brands already go in this direction. Driving in a Rolls-Royce,
for example, is already an event by itself, and the brand organizes several events that bring owners
together, creating a sense of community.7 Owning one of these cars is also being in a part of a
world few can reach — this is the Rolls experience. However, Rolls-Royce cars share a lot with
BMW or Mini underneath — from platform to engine to telematics. But the formula needs to be
taken to a level not yet seen in the car industry or beyond. As an example, imagine a car brand that
works as a community of owners, continuously forging experiences for those owners. Depending on
the brand strategy, these experiences could also be tailored to suit different customer types. This
same brand would offer the most convenient way to go from A to B, be it by car or by any other
transport. This model would be wrapped around a characteristic brand experience and included in
your monthly subscription fee.

This path is also consistent with the differing mindsets of millennials, who already make up for a
quarter of the world population. Unlike Baby Boomers, they place more emphasis on experiences
than on ownership.8 This means carmakers will have to set aside their long-established industrial-
conglomerate mindset to become key players in the experience economy.

Recommendations for CIOs

■ Use your know-how about open source and its impacts to be the driving force in steering the
company in the right direction to avoid product commoditization. The organization must deliver
according to customers’ future expectations by shifting from product/service development to a
holistic and integrated experience design.
■ Drive the company to focus its digital differentiation projects on all customer touchpoints —
from advertising to end of vehicle life. This will consistently develop and deliver the most
satisfying experience for customers.

Open Source Brings Specific Risks — And Its Cost Savings and Shorter Time to
Market Foster Vendor Lock-In
At first, open-source software carries with it the same risks as do other software assets, including
concerns about service, quality defects and security vulnerabilities. However, another potential
caveat stands out as almost unique to open source. It begins with the nature of open-source
acquisition costs. For one thing, the total cost of acquisition for open source is almost always close
to zero. Adopters are less compelled to pay for the privilege of using open source. Unfortunately,
one critical side effect resulting from such a low burden of acquisition is that many open-source
assets are either undermanaged or entirely unmanaged once they’re established within an IT
portfolio. This undermanagement can easily expose both quality and security risks over time
because these assets aren’t patched and updated as frequently as they should be — or may not be
patched and updated at all.9 This demands more rigor from internal IT teams in conducting regular
and thorough software quality control.

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Open source also entails potential legal risks like license compliance problems and intellectual
property infringement. License selection, developer best practices and project management rigor
are also risk factors specific to open source. Individual adopters must measure these parameters
against their own risk thresholds and usage scenarios while considering factors like project maturity,
license suitability and the availability of commercial third-party support options. Open source may
also entail political risks to consider. For instance, Huawei’s new Mate 30 Pro phone won’t be able
to use key parts of the Google Play Store due to restrictions imposed by the U.S. government.10

Another open-source pain point concerns the coordination between hardware and software
updates. Users of open source have little or no control over update timelines. A car model stays in
production for six years on average, but in some jurisdictions — the European Union, for example
— manufacturers are mandated by law to enable vehicle operability for 10 years after the end of
production. As over-the-air software updates become commonplace in cars, the latest version of
any software will thus need to be compatible at a minimum with 16-year-old hardware. This means
automotive CIOs need to incorporate rigid clauses in their agreements with open-source providers
to ensure long-term compatibility.

Vendor lock-in is always a risk for which automotive CIOs need to carefully plan. The advantages of
open source in cost savings and shorter time to market amplify this risk over conventional licensed
solutions. In addition, some software vendors have developed a tendency to add proprietary
extensions on top of an open-source foundation (open core), further increasing the risk of lock-in.

Recommendations for CIOs

■ Create and implement a risk mitigation plan specific to open source by developing and
communicating a risk management strategy with tightened software quality control
mechanisms.
■ Counter the risks of open-source dependency by using the following approaches:
■ Run competing open-source platforms in different products to hedge against vendor
dependency and enable a quick transition to an alternative platform should the need arise.
■ Develop an action plan to enable a fast platform replacement, if necessary. The plan should
tackle all points affected by open source and define solutions for potential roadblocks.
■ Create or design a hybrid software platform encompassing open-source and proprietary
components. This approach will enable you to use the open-source components for the
heavy lifting. Use the proprietary software for critical and differentiating applications. This
would facilitate open-source provider replacement if needed.

Gartner Recommended Reading

Some documents may not be available as part of your current Gartner subscription.

“What Innovation Leaders Must Know About Open-Source Software”

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“Hype Cycle for Open-Source Software, 2019”

“Start With These Three Best Practices to Maximize Open-Source Software Value”

“Open Source Change: Making Change Management Work”

“Market Insight: IoT-Based Digital Personalization, Part 1”

“Market Insight: IoT-Based Digital Personalization, Part 2”

Evidence
1 “What Innovation Leaders Must Know About Open-Source Software.”

2“Ford - Volkswagen Expand Their Global Collaboration to Advance Autonomous Driving,

Electrification and Better Serve Customers” (press release), Volkswagen.

3 “The Twilight of Combustion Comes for Germany’s Empire of Engines,” Bloomberg Businessweek.

4 “Auto Industry’s Thirst for Software Is Quenched by Open Source,” Automotive World.

5 “Google’s Iron Grip on Android: Controlling Open Source by Any Means Necessary,” Ars Technica.

6 “Why Do All Smart Phones Look the Same?” The Australian.

7 House of Rolls Events (website).

8“NOwnership, No Problem: An Updated Look at Why Millennials Value Experiences Over Owning
Things,” Forbes.

9 “Open Source Security Challenges in Cars,” Information Age.

10 “Huawei Confirms the New Mate 30 Pro Won’t Come With Google’s Android Apps,” The Verge.

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