New Type of Suppliers for Connected Cars

Cybertech Tiers Attack

22. Februar 2021, 13:40 Uhr | Ute Häußler
Tier1 Automotive Connected Car Entwicklung
© Shutterstock

For the smartphone on wheels, a paradigm shift in the supply chain is needed in addition to software-oriented architectures. Cybertech tiers want to develop services for connected vehicles quickly and effectively - as a new player together with manufacturers, suppliers and aftermarket providers.

We ask Dionis Teshler of Israel's GuardKnox: What are cybertech tiers and how do they fit into the disruptive automotive supply chain?

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Tier1 Automotive Connected Car Entwicklung
Dionis Teshler is co-founder and CTO at GuardKnox. Teshler holds a bachelor's degree in electrical engineering, a master's degree in computer science, and an MBA in global strategy. He worked as a computer vision engineer and cyber engineer in the Israeli Air Force and subsequently led cybersecurity for the F-35 program. Since 2015, he has been dedicated to technologies for the automotive future at GuardKnox.
© GuardKnox

Mr. Teshler, the name Cybertech Tier sounds futuristic. But the underlying Service-Oriented Architecture (SOA) for car electronics is not new. What is the "game changer" in the new approach?

Dionis Teshler: SOA is a technology. To implement it successfully, we need to look at current customer needs and how suppliers are changing. Today's car buyers want digital experiences and connectivity - OEMs and Tier-1s need to deliver the best software and computing power for "user experience" instead of horsepower. Half of all development costs already go to software, with around a 70% share predicted in the long term. This is a fundamental change. In parallel, many OEMs are realizing that the ECU hardware manufacturer does not necessarily have to be the right expert in software or computing platforms.

The real value of the next generation of vehicles lies in the best technology, and therefore in the suppliers who provide the best solutions for an advanced user experience. One aspect is SOA and services, another zonal architectures, cybersecurity and high-performance computing. Plus, of course, connectivity. Instead of looking for the "eggshell", OEMs - the best example being VW Group's Car.Software Org (CSO) - are now looking for the best vendor for a particular technology, which then becomes Tier-1 for that product. That's priority number one.

To these technology solutions, many different suppliers can contribute a part, which is produced by another supplier and implemented again by the next one. That's why we gave these new partners a name - Cybertech Tier. Cyber is everything that is connected. Tech, of course, stands for technology; together, it places itself as a new category of technology suppliers in the changing value chain among Tier 1s and Tier 2s.

What advantages serve the rather small cybertech tiers as an entry ticket in the current consolidation phase with mega-mergers, cross-OEM IT partnerships and semiconductor companies as new automotive players?

Dionis Teshler: The very question shows that partnerships are needed in the automotive sector. You can't do it alone, the OEMs have to create an ecosystem for the connected car. We as GuardKnox are already working with NXP, Green Hills Software, Xilinx and many other partners. These companies are suppliers of core technologies that are also part of our offering.

The way into the newly forming supply chain is through vertical integration, which OEMs have already created with organizations like the CSO or with spin-offs like the
ZF Software Center have already created. Cybertech Tiers are seeking supplier status for these entities of OEMs and also Tier-1s. In the future, when it comes to SOA, a software stack or a cybersecurity solution, it will always be a joint solution offering from multiple partners. The main change is that we don't necessarily produce the ECU, instead we produce a specific module with the best possible technology. This goes against the traditional approach of a Tier 3 or Tier 2 supplier. We cooperate directly with OEMs and Tier 1s - the software components are far too important in the
modern car. Cybertech Tier is more a question of positioning and partner management, we didn't make it up. It is the OEMs that are changing the supply chain - this is visible in the way they are (re)structuring themselves right now.

Tier1 Automotive Connected Car Entwicklung
How cybertech tiers want to dock with the automotive supply chain.
© Guard Knox | Elektronik

The advantages of a cybertech tier cooperation are likely to be far greater for Tier-1s than for OEMs?

Dionis Teshler: I wouldn't put it that way. A cybertech tier has to work with both partners, but not necessarily in a traditional hierarchical way. The OEM has to see how it can allow and integrate new technologies, and direct collaboration is important with both partners. Today, cybertech tiers work mainly with Tier 1 customers, but that is already changing a lot because of organizations like the CSO. The CSO has itself become an integrator and a Tier-1 of sorts. So when they integrate the ECU, we work directly together there. It's not clearly separated anymore. It's becoming more of a matrix between the partners to maximize their respective strengths and create the best product for the OEM and the car buyer. UH

Thank you for the interview Mr. Teshler!

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