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May 2022

GM/Redhat announcement

Open-source software
hits the road
10-minute Insight
Software has become the new growth engine of theautomotive industry, enabling car makers to offer consumers
fresh and compelling digital experiences. But most software
platforms developed by most OEMs remain highly proprietaryand closed off to 3 rd party collaborators.
In this bi-weekly insight we analyze the recent
partnership announced between General Motors and Red
Hat to develop in-vehicle open-source software(OSS) platforms, and explore whether it points towards alonger-term push towards collaborative coding.

Target audience
Engineering / Strategy

Focus market(s)GlobalDev Teams/ Product Planning1What is happening?
Two worlds converging?
Open-source software isnʼt new in automotive, and neither are
collaborations with Tech Giants. But the GM/Red Hat announcement
does point to a convergence of those two trends.

Open Source
SW Initiatives

Tech Giant
Collaborations

A growing number of opensource software initiatives haveemerged within the automotive
sector, targeting nondifferentiating tools &components

Tech giants are increasingly
stepping in to support carmakers, bringing with them
their extensive softwareexpertise

New partnership

Key takeaway
As the battle for in-vehicle software
dominance heats up, differences
between OEM strategies arebeginning to emerge. In May 2022
GM announced a new strategy,
partnering with Red Hat to shift
away from proprietary general
purpose operating system software.
• While open-source software (OSS)
isnʼt new within the automotive
industry, it has often been narrowly
applied to certain in-vehicle functions
such as infotainment (e.g. Android).
• Although there are significant benefits
to OSS (e.g. speed of innovation), themain challenge in expanding its use
within automotive has traditionallybeen ensuring safe execution ofsoftware and applications.
• Tech Giants like Red Hat (owned byIBM) are increasingly stepping in to
help OEMs by taking over some of theheavy-lifting (e.g. warranty,maintenance, triage), enabling themto expand OSS beyond infotainment.
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Why does it matter?
By 2026 the in-vehicle SW
market is forecast to be worth...

$17Key takeaway
The market for in-vehicle software isforecast to grow at 7% CAGR during
the next 4 years, reaching $17Billion by 2026*. Maximizing thevalue all this software requires thatOEMs carefully balance risk
management and product agility.

Billion*Capitalizing on SW requiresthat companies balance...

RiskManagement• Robustness• Security• SafetyProductAgility• Speed• Innovation• Iteration• OSS has traditionally been used tocost-eﬀectively maximize productagility – the ultimate case study forthis outside the automotive industry isGoogleʼs Android strategy.
• But delivering high levels ofrobustness and security in safetycritical in-vehicle environments has
traditionally been tough using OSS
with high levels of customization.
• Red Hat and GMʼs goal is to achievethat balance. Red Hat's primary role
is to deliver the professional services& accompanying toolchain required tomake OSS robust and secure enoughto support ASIL-B compliant**
functions on a scalable OSarchitecture.
* Source: SBD Automotive, 2021** ASIL = Automotive Safety Integrity Level

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Where next?
Key takeaway

1OEMs, Tier 1s, and other software vendors
will look to an increasingly small club ofupstream OSS as foundational to in-vehiclesoftware.

2

GM is expected to launch the first OSS-based
systems developed with support from Red
Hat by 2024/25.

3The vehicle will never be enabled by pure OSS– the stakes are too high. Strongly supported
proprietary software from companies likeBlackBerry will continue to enable criticalinfrastructure.

Swimupstream
GM OSSlaunchValue
propFuture
OutlookOEMs
watch &learn

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OSS in allcars
5

1-3yrs3-5yrs>5yrs

As initiatives like Red Hat's RHIVOS (Red HatIn-Vehicle OS) progress, other OEMs will keepa close eye and adjust their own SW
strategies accordingly.
While OSS will never be suitable for every
system in the car, expect it to eventually be apart of every car.

In the long-term, transitioning toSoftware-Defined Vehicles will
require that car makers successfully
leverage open-source software
across a growing number of invehicle functions.
• In many ways the automotive
industry is following a similar journeythan the Cloud and CE industries havetaken over the last few decades –except with a distinct automotive
twist that reflects the safety-criticalrealities of fast-moving 2-tonmachines.
• Red Hat and GM are demonstrating
one approach to undifferentiatedsoftware development, but it is still
early days, and many otherapproaches are likely to co-exist• Not all projects will succeed and OSS
will realistically never take over theentire SW stack in a car, but OSS is
here to stay, and every car makershould start considering how toleverage it and their ecosystems
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Who to watch out for?
Key takeaway
While OEMs were historically forced
to choose between a handful ofproprietary software stacks, they
now face a rapidly growing numberof OSS initiatives, APIs, solutions
and partners.

OSS▶

Other key OSS
initiatives• These now stretch beyond IVI.
Initiatives like Autoware and Apollo
are pushing the boundaries of OSS
towards safety-critical use cases,
supporting rapid and collaborative
improvements in autonomous driving.
Mature▶

◀Proprietary◀Nascent• In parallel, many tech giants continue
to straddle the space between OSS
and proprietary, leveraging the former
to support their growth andcommercialization of the latter.
• Major OEMs investors in software
such as Toyota (Woven Planet) andVolkswagen (CARIAD) are therefore
torn between the comfort ofproprietary robustness and thepromise of OSS agility.

Key software
influencers

5How should you react?

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ExploreSoftware is now at the heart of every OEMand Tier-1ʼs strategic planning – the next
phase is to consider what balance of agility
and robustness is required and therefore whatrole (if any) OSS could play.

Authors
Alex Oyler
Director

Andrew Hart
CEO

Related SBD Reports
Engage

The eco-system for software is expanding
quickly and engaging with different parts of it(including Tech Giants) can help build a morerounded view of OSS. This engagement canrange from workshops, to joining forums, tobuilding POCs.

Focus

All companies will need to pick which side of
the OSS fence they sit on. If OSS is seen as
strategically important, a long-term focus will
be required, as a commercial ROI could takeas long as 5-10 years.

Ref:638
OTA & SW
DeliveredFeatures

Ref:636
SoftwareDefined
VehicleRelated SBD Consultancy§ Technology forecast§ Supplier evaluation / due-diligence§ SW Architecture Strategy§ Competitor benchmarking

Interested in finding out more?

Most of our work is helping clients go deeper into new challenges andopportunities through custom projects. If you would like to discuss recent
projects weʼve completed relating to in-vehicle SW, please contact us.
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