 Welcome back everyone. We're here live at Newsome Conference, IBM's premier cloud show. This is theCUBE, our flagship program where we go out to the events, extract the signal from the noise. I'm John Furrier, the founder of SiliconANGLE. John's my co-host, Dave Vellante, co-founder of wikibon.org. Our next guest is Brian Drossler, Vice President of Continental AG Software and Solutions here at IBM, Paul's. Welcome to theCUBE. Thank you very much. So you guys, you did a keynote. Great presentation. So tell us what you were talking about on stage and some of the highlights. Sure, sure, yeah, on stage I was really talking about how the car is becoming just another mobile platform in our lives. We see that the car is gonna connect to the API economy. This is a message that we're taking out to the car makers and really trying to show that the car connected to the cloud can bring forth many, many new use cases. One of those use cases we're really excited about is the future of automated driving. So we've laid out some road maps and some bold statements in our keynote yesterday regarding when we see the future of cars driving themselves around. It'll take some time, but we think that by 2025 you'll see fully automated driving cars hitting the road. We had David Pogon yesterday who was kind of goofing on some of the things in Silicon Valley. The Googlebot NAS they have a self-driving car and that's cool. They do that because it's really cool but also it's a forward long-term vision of expanding the technology base and David and I always joke we have kids and we're always in the car. They're always on their phones. We always say, hey, imagine the future. This car is driving itself and it's texting by itself and all that good stuff. And it's fantasy today, but the reality is it's not too far away, is it? No, it's not. And it's a journey though. Self-driving cars is certainly one thing. It will take some time. The other aspect is just connecting the car to the cloud really gives the car maker as well as the consumer the connection to a whole new set of potential services making the car safer, more comfortable and more efficient on the road. One example we talked about yesterday was the idea of an electronic horizon. Giving the car information from the cloud about what's happening far ahead of the car in order to maybe save fuel, make the car journey safer as well. Yeah, so and this is an enormous opportunity but before we get into that I would just describe Continental a little bit. You know people know you're talking off camera you make tires and everybody knows that talk about the company and other things that you guys are into. Sure, sure, absolutely. A lot of people know us as a tire company. In fact we produce almost everything that you find inside of cars today. We sell our products directly to the car makers themselves. We make everything from radios navigation systems, telematics systems, which is the business unit I'm part of, but we also make dashboard clusters, heads up displays, braking modules, brake pads, everything that really drives the car. So when you think about the fully automated car obviously you think about the Google car but you would expect that the car makers would be heavily into that. But it sounds like you're a really key piece of the value chain. Can you help us discern sort of where you fit and where they pick up? Because you know there's obviously spending a lot on R&D, the big car makers, they got a lot of money. Where do you guys fit in that whole ecosystem? Yeah, we're a supplier to the car makers. So at the end of the day they will drive this forward because it's a brand image for them. It's something that can differentiate their vehicles, these different features that lead us towards self-driving cars. But they rely on us as a supplier to have that technical capability. And Continental is really one of a few automotive manufacturers of components that our components span everything inside the vehicle such that we can look across the entire system and provide that system integration expertise that the OEMs are relying on us to bring to them. And so talk about that journey of the fully automated car. I mean today there's some automation going on. My wife's car talks to me when I drive at it. It won't let me back up sometimes. It will beep at me if the car is coming to my left and so that's a form of automation. So we're the starting gate. So describe where we are and where we're going. Yeah, so today you have technologies like parking assistant, lane departure warnings, but you're also seeing today even lane keeping systems where the cameras are already watching the lines on the road. If you are going over a line, it's actually nudging the steering wheel to bring the car back in alignment with the road and letting you know that the car has gone off track a little bit. Those technologies are gonna continue to come out. And as we connect the car to the cloud, rather than just in the next few years using radar, camera, and LiDAR sensors to see a few hundred feet, let's say, in front of the car, when we connect to the cloud, we can now start to inform the car about what's happening one or two kilometers down the road. So what that means from a road map standpoint is that by 2018 timeframe, we will see partially automated vehicles. By 2020, we'll see the full rollout of those partially automated vehicles and fully automated vehicles by 2025. By the end of the decade, you're envisioning, by the end of the, let's say, mid-2020s, you're envisioning a situation where a driver can just get in the car, text, read a book, whatever. That's our hope, that's our hope. And that is the vision that you guys are putting forth. I mean, essentially a limo driver without the limo driver. Yeah, I wanna stress too that it is a journey. By 2025, we expect that fully automated vehicles will come on the road, but it might not be every leg of the journey. It might be that you have to take it through a certain part of your journey manually, but then let's say you get on a highway infrastructure where cars are connected and platooning together very efficiently. Those are certainly situations where rather mundane task, driving some people really would like to. Just taking all the fun out of driving. Brian, I gotta ask you, I'll see, big presence here. You're got this forward-looking vision. You guys are doing some great work. IBM, they get the full range of the cloud. What's your reaction to the products and services that they're announcing here? It's very exciting. Certainly as a 140-year-old company, Continental is rooted in very traditional automotive technologies, and the cloud technologies are really opening up new possibilities for us. And when we saw yesterday the ability to, in five minutes, code up a new cloud-based service for SMX texting, that's exactly what we need in the automotive industry, is the way to compose new services without having to spend 24 months and millions of dollars on infrastructure investments. And what we see in Bluemix is the ability for Continental to bring out new automotive features using that technology in a quick and less expensive way, but also we expect the car makers to exactly do the same, and they want to have their developers easily able to bring these new features out. So the idea of a composable business and being able to click and bring new services in to create applications using Bluemix is perfect. What do you think about the new capabilities there now? So we got a lot of new capabilities. That was IBM's main message. What's your take on those new capabilities? So the capabilities that we really look at IBM for are the breadth of not only the Bluemix product itself, but also the engineering services and also the ability to consult across the entire end-to-end system. So that breadth of services that they have and are enhancing by the announcements yesterday, we think is exactly what the automotive needs, automotive industry needs, as really the IT world and automotive world are coming together. And this is an enormous marketplace. I think you cited it at a broad tan of around 600 billion, which is, you know, it starts to get into the size of the entire IT marketplace. It's enormous. And that is what the connected automobile, what is that sort of massive hundreds of billions of dollar opportunity? Yeah, it includes a lot to be clear. It includes not only the hardware that might go in the vehicle and the electronic systems in the vehicle that are required, but it also includes the connections to the cloud and the service providers that will facilitate that connection to the cloud, as well as the cloud hosting, infrastructure as a service, platform as a service and software as a service vendor. So it really includes, you know, everyone from client to server, hardware, software, and the services include. You also talked, Brian, about the automobile as a software platform. Maybe, and you've talked about the automobile entering the API economy. I wonder if you could talk more about the automobile as a platform, and it's got microprocesses in it. I don't know how many microprocesses over there, dozens at least, right, today, and many more coming. The software content of a car keeps increasing as we all know. I wonder if you could talk about that a little bit more and paint a picture of where you see that going. Yeah, yeah. You know, it's an interesting picture. One of the things I've talked about previously is that there's a lot of fragmentation and really there's a battle for control in the vehicle that's creating a large amount of fragmentation in how connected solutions and automotive infotainment systems are being created. Examples, right? You hear about Microsoft auto operating systems. You hear about Blackberry and Q and X operating systems. You have Linux and Genevieve operating systems. You have Google now announcing the open automotive alliance, allowing Android to come into the vehicle. So you have all of these different technologies that really what they're trying to allow for is the ability to bring applications into the vehicle. So the vehicle as a platform with the ability to update software over the entire life cycle of the vehicle. And that's where the OEMs are going. But the struggle in our industry right now is that there's so many different options. And that's really why, as continental and working with IBM, it becomes an IT industry question. We need IT technologies and connected solutions, software as a service, platform as a service. And that's where IBM is really helping continental and I believe the automotive industry go forward. So when you think of a server, it's sort of easy to conceptualize that microprocessor is the brain and the sort of single point of control, orchestrating all the activities in the IO and talking to the disk or whatever and the networking. Is there an analog in the automobile or is it a collection of brains? Yeah, it is a collection of brains. In fact, when we talk about highly automated driving, there will be one brain that's connecting your car to the cloud. But that connection will talk to the transmission controller, to your engine controller, to your braking controller, to your lane keeping assistant controller. So all of these systems inside the car really network together in their own way, inside the car locally. So software quality has to be a huge concern about one of the headwinds, right? I mean, because if something goes wrong, it's going to ripple through the entire system. So we wonder if we could talk about that and what kind of innovations and effort is going on there. Yeah, I mean, software quality is paramount. Really quality, not only the software, but the hardware as well. So in the automotive industry, a lot of people see that our life cycle or development cycle is rather long, but that really is a result of not only the environmental testing that we go through, but also the software quality testing that we have to go through. We do hundreds of miles of drive testing. We will cycle through user clinics for certain products as well to try to vet out software issues. We do our testing. The OEM does their cycle of testing as well. So it's really a combined effort with the OEM to design it up front using latest and greatest software methods. We're moving into agile and scrum now for embedded software design, building in the right processes over the life cycle of the software and then testing as well. Brian, I want to ask you about some of the fatal flaws in the past with computers in the car. That's been frequency, radio frequency, wireless. There's always been a problem. In car, there's been some stuff about licensed spectrum and unlicensed spectrum and Wi-Fi and, actually with LTE, it's getting better on the wireless side. What's the current state of the market on that? How do you guys look at that piece of it? Is that in your wheelhouse? Do you look at that as a separate part? The connectivity to the cloud? I mean, I guess it's not called last mile if it's to the car, but the last mile's always been a tough battleground. Yeah, in terms of the car, the actual wireless connection outside the car. I'm driving. I got to go between base stations and going wireless. Is it going to be mile markers? Is it going to be side stations? Licensed frequency, unlicensed frequency? I mean, it can get pretty complicated. Yeah, yeah, and I think it is complicated and that's why you haven't seen the NHTSA necessarily come out with one statement on this is how we're going to do it because there are some competing ways of connecting the cars in that way. So we are directly in the center of that. One of our core competencies is really connectivity technologies. We have engineers on staff that actually design mobile phones. We have our own LTE, automotive hardened LTE 4G modem that works worldwide with all the major carriers. We also have in the past had 2G, 3G. We have Wi-Fi chipsets. We have Bluetooth. The whole 9 hours. This has to be a core competency. It is and then throw DSRC into the mix as well, which is what to date when you talk about car to car communications, DSRC is one of the technologies that's really currently in the lead. But you're right. Think about that car moving along. It has to switch between towers. Perhaps it has to switch to some DSRC communications. Maybe it also has to switch to Wi-Fi for some other use cases. It's a concept that Continental has promoted called mobile router, which is the hardware and software intelligence in the vehicle that actually can make the decision on which communication is the most efficient to you at a certain point in time, given signal strength, et cetera. And that's going to be key going forward. And there's all kinds of computational challenges. I mean, it really is intoxicating when you think about how much complexity will be involved, meaning the maps for the self-driving car and the kids who want to watch Netflix on the back of the headsets. Right. On the SUVs, right? So, I mean, that's kind of the reality of it. Those are challenges, right? Design challenges. It is, it is. Back to the point of what do the car makers want from Continental, we have to be those technical experts because they're in the business of creating the best cars in the world, but they rely on us for that deep technology experience. Okay, my final question to ask to you is, give us your personal take on, what's it like being on stage at the big IBM event? How big was the stage? It looked huge from the photos. I'm just had the camera up top, but what was it like up there for you? Were you nervous? Did it go by fast? And you got the auditorium feel, right? A lot of these conferences are just sort of flat floor. I mean, you feel like you're in the Boston Garden, right? Absolutely. Tell us what your personal feeling was. It was exhilarating. You know, I was backstage just before it started and the band was playing and I could see the shadow of the trapeze and the bungee cords all over the place. It was absolutely amazing. I was pretty fired up. And then when it finally came to it, the odd thing was, the way the lights were shining on me, I couldn't really see the top and I couldn't see the bottom. I just could see in the middle and it was like it was a small conference room in the end. Brian, thanks for coming on. Great presentation, Continental AG, really cutting edge software, real hardcore engineer at the chipset level, mobile router. I mean, it's really hard to do this complicated internet of things with the kind of technology for the automotive industry. Bright future, thanks for coming on theCUBE and sharing your knowledge with our audience. This is theCUBE, our flagship program where we go out to the events, extract the signal from the noise. I'm John Furrier, we're right back with Dave Vellante and myself. 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