Big Data and Cars

Big Data Many companies are making use of big data to give themselves competitive advantage. Tesla is a good example of this. Tesla installed its Autopilot self-driving system on its cars in late 2015, even though the system is not activated. But what it has done is allowed the company to collect data on 1.3 billion miles of driving. This in turn "allows Tesla's engineers to fine-tune the algorithms that control its cars' active-safety systems," the basis of fully autonomous driving (Edelstein, 2016).

Other car companies are working towards self-driving cars, but are doing it without the benefit of this enormous data set, which means that Tesla should in theory enjoy a technological competitive advantage with its self-driving cars (Edelstein, 2016). The implementation of this big data is a work in progress. It will take years, and in theory the implementation should remain ongoing even once Tesla's cars are fully autonomous. The company is pursuing this project with an eye to gaining competitive advantage.

It will be able to develop better self-driving cars, safer and more effective, than those of its competitors. When self-driving cars arrive on the market there will be intense competition and battle for market share, but in this Tesla will have the ability to market its cars at a premium while gaining strong early market share, on the basis of this source of competitive advantage.

Other automakers that are working on self-driving cars have not installed such systems to gather data, and even if they do Tesla will have done it first, which allows the latter to have a larger data set. It is possible that a larger competitor that sells more cars in a year can overcome this, but with self-driving cars not more than a year or two away from fully autonomous capability, competitors may not be able to make up the data gap on Tesla until market positioning has already been established.

Another company that makes ample use of big data is IBM, and they are using it in an entirely different way. IBM is leveraging the trendiness of big data in business to help sell its technology solutions. While companies look to the firms they admire -- Google, Tesla, Apple -- that make substantial use of big data, there is a whole industry of other companies that are willing to build around the drive towards data acquisition, and make supporting data acquisition, storage and retrieval a part of their business model.

Big data is used to gather vast information sets, but is mostly only useful when these data sets can be effectively analyzed. IBM has for the past several years made substantial investments in Big Data, knowing that its enterprise-level clients are going to want the tools to be able to gather and analyze the vast amounts of data that they have access to (Versace, 2014).

They undertook not only massive R&D investment but a series of acquisitions to increase their capabilities in this area -- essentially leveraging a large and stable cash flow to finance their move into this emerging business area. As a result, IBM has now staked out a position as a big data leader, not because it is using big data to gain competitive advantage, but because it builds and markets the tools that other companies use to collect and analyze massive data sets. That.