BMW, IBM Join Forces to Harvest Data from Connected Cars

BMW and IBM believe an open data platform will improve the customer experience, but what about privacy?

BMW AG

New cars are data-generating machines. The array of sensors and computers that enable features like navigation and adaptive cruise control also produce data that many companies believe is valuable, and could be traded or sold. So, just like smartphones, the connected cars of the future could be caught up in the battle between technological advancement and personal privacy.

A new deal between BMW and IBM could push the needle away from the latter, however. IBM is being brought in to manage BMW CarData, a new open data platform designed to let customers share data from their cars with third-party services, such as repair shops and insurance companies.

IBM claims its data analytics tools will allow these third parties to "develop entirely new customer experiences" using the data from up to 8.5 million BMW vehicles. Customers will have to actively agree to share their data for specific features, according to IBM, and that data will be encrypted. It's unclear what these services might be, but it's not surprising that companies want access to this data, as it could prove valuable in analysis of customer behavior.

BMW is no stranger to harvesting customer data, mind you. In addition to the joint effort with IBM, it is working with Mobileye to use sensor data from customer cars to aid in the development of self-driving cars. BMW hopes to launch a car with at least some autonomous capability by 2021.

Sharing data not only brings up the issue of privacy, but also how people will be compensated for something companies clearly view as valuable. It's possible that companies providing these services may offer some form of incentive, like discounts, in order to get consumers to volunteer. 

For now, BMW CarData is just a pilot program, with the first data-based services expected to launch this fall. IBM considers itself a neutral facilitator connecting BMW cars with third parties, and so it isn't beholden to the German automaker. It hopes to develop similar arrangements with other automakers in the future.