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Protecting Intellectual Property in the Automotive Industry

Sep 06 2022

The automotive industry is experiencing challenge and change from all sides.  

Automotive OEMs are working to better understand the changing customer journey in relation to their products, and identifying profitable growth opportunities through the integration of digital technology into all areas of the business. This has led to digital and data-led transformation, but execution has been challenging because such profound change touches every part of the automotive industry; refocusing R&D, enriching product innovation and digital experiences, upending partnership models and retail. 

Last year, McKinsey issued recommendations to CEOs in advanced industries (including automotive and assembly), with the objectives of securing growth and next-gen margin, achieving product transformation and reshaping the organisation and strategy for the “next normal.” Cloud and digital transformation featured repeatedly among the recommended strategic actions, including:

  1. Digital disruption to drive go-to-market approaches, 
  2. Digital analytics to better assess company performance, 
  3. Using digital tools to mitigate risks and lower costs, 
  4. Cloud partnerships to accelerate momentum (creating a focused cloud strategy), 
  5. and Designing an organisation built for speed.

McKinsey also outlined other recommendations requiring significant focus from IT teams, including M&A, and the transformation of global footprints and industrial supply chains.

All these recommendations are either explicitly or implicitly items for the CIO to-do list, and data protection is a critical success factor for all.  

The data protection challenges faced by the automotive industry – and recommendations on how to approach them – form the basis of a new eBook from Netskope; Protecting Intellectual Property in Automotive. The eBook is available in English and German.  Read on for a sneak preview.

Netskope Threat Labs data shows that the average manufacturing organisation (with 500-2,000 users) uses 1,522 unique applications, 98% of which are unmanaged by IT teams. This is a higher percentage of unmanaged apps than a multi-sector average. In that average manufacturing organisation, 113 distinct apps are used to upload, create, share, or store data. 

While automotive might have initially had a reputation for being reluctant to embrace cloud due to security and data protection concerns, this is certainly not the case anymore. In fact the specific automotive cloud market is expected to be worth $6 billion by 2027, such is the drive of the software defined vehicle.

Cloud adoption means that you can no longer effectively secure an organisation’s activity and data in the cloud using appliances sitting on-premise. To do so ignores the reality of how people are working, their location and that of the data being shared. And so security and networking transformation is yet another major reinvention going on within automotive. In fact, a survey carried out at the end of 2021 in both my home market of Germany, and the UK found that 99.5% of British and German IT leaders are planning network and security transformation projects in the next five years, and 62% have already started these projects, or plan to in the next 12 months. 

The good news is that, as with the rest of the strategic revamp going on in automotive, security and network transformation to a SASE model brings significant advantages. 

  1. When security is cloud-based and data-centric, users and data location are no longer limiting factors. Users and data can be secure regardless of location or access device allowing automotive companies to take advantage of hybrid work and geographic fluidity.
  1. A deep, contextual understanding of data types and usage means policies can be designed at a higher granularity than allow/block. This means security teams can allow more – partnerships, productivity apps, and collaborative data sharing – without exposing intellectual property or commercially sensitive information to undue risk.
  1. Securing the data, not the application, means security visibility doesn’t just include sanctioned applications. This acknowledges the 98% of unmanaged cloud apps supporting business productivity in the average manufacturing organisation, and allows lines of business to continue to innovate and achieve productivity gains without constantly struggling through time-consuming security approvals that can take months before an application is deemed useful. It also ensures that data is protected wherever it travels in the course of productive business; in the cloud, on the web, and on any device.
  1. In the first half of 2022, 85.7% of reported attacks on manufacturing were motivated by cyber crime (which is money motivated and includes ransomware). Yet even if we put aside mitigating the cost of attacks, enterprises are reporting millions of dollars in savings from SASE as they see cost benefits through vendor consolidation and technology management integration, as well as a significant reduction in network costs.
  1. User experience is significantly improved, wherever hybrid work takes employees, with no obtuse networking compromises sending data traffic to and from locations just for security purposes.
  1. Organisations have much greater control over the jurisdictions their data is subject to, and are assured greater control over privacy and data protection compliance

Software is, in essence, an organising and presentation system for data, and as such the Software Defined Vehicle is one built from data. Whether looking at the end product, or industrial and operational processes, data is now driving the automotive industry. We see this in the use of NFT and blockchain (underpinning subscription models and warranties), as well as through the industry’s extensive use of AI for advances such as autonomous driving. Operationally, “data” means competitive advantage and its value only grows. Providing access to, and securing, that data is a chief priority for automotive and the reason for the prevalence of SASE-driven network and security transformation projects across the sector. 

For more information, German speakers can read the new eBook: Protecting Intellectual Property in Automotive.  

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Dirk Wollschlaeger
Dirk Wollschlaeger is a member of the Netskope CXO Advisory Board. Over a career spanning more than 30 years, he has held various leadership positions in sales, production, engineering, and consulting.

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