Data Centers on Wheels: How Intel Plans to Capitalize on Mobility
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services to enterprises, rather than business models focused on consumers. But Van Pelt says Moovit is one of the companies with the potential to become a commanding consumer-facing Mobility-as-a-Service app if it continues to offer riders an expanding array of private trip options in addition to public transit. Moovit began integrating Uber into its rider menu in 2016, and it also displays a few other ride-hailing company services outside the United States.
Competition is heating up, however, to be the one-stop consumer marketplace app for mobility options. Google Maps, which gives driving directions as well as public transit trip planning, also links to Uber and Lyft. Montreal, Canada-based startup Transit, which began as a pure-play public transit app, integrated Uber as an option in 2014, then added car-sharing partners Car2Go, Communauto, and four other services in Canada, and continues to seek more private mobility partners. Transit also manages a payment conduit for bike-sharing.
Even Uber and Lyft are trying to make their apps more than just a gateway to a single ride-hailing service. The two top ride-hailing companies are looking at bike-sharing partnerships, have created their own car-pooling services, and have begun integrating municipal transit options into their apps. At a conference on May 31, Uber CEO Dara Khosrowshahi said the company’s app will eventually offer a wide range of outside trip options, Recode reported.
“Just like Amazon sells third-party goods, we are going to also offer third-party transportation services,” Khosrowshahi told Recode’s Kara Swisher in an interview. That aggregator’s business model may not be surprising coming from Khosrowshahi, who, as Expedia’s former CEO, presided over a collection of online travel services marketplaces including CarRentals.com, Travelocity, hotels.com, and Orbitz.
Van Pelt says the competition for roles such as the go-to mobility aggregator app won’t necessarily lead to a winner-takes-all outcome. “I think there’s going to be room for many players,” she says.
Intel Capital’s investment strategies
The startups sprouting up to fill mobility support niches create partnership opportunities for Intel, as it plans for its own future in transportation-related data services.
One of Van Pelt’s guiding principles is: “Don’t replicate what’s already done: partner.”
Intel Capital takes a stepwise approach to startup investing, from helping to incubate new ideas, to investing in startups, partnering with them, and then evaluating them as acquisitions for Intel, says Van Pelt, who was involved in the Mobileye acquisition and the Moovit investment. She shared some elements of her investment strategy, or portfolio theory, in the context of mobility:
The size of the market opportunity matters, when it comes to a company like Intel that generated net income of $9.6 billion on revenue of $62.8 billion in 2017. For a startup that has the chance to grow revenues in the range of $1 billion to $2 billion, Van Pelt says, Intel Capital would be more likely to invest and take an equity stake up to 40 percent, rather than plan to bring the startup inside Intel. A startup offering a potential $5 billion to $10 billion market opportunity is a more likely acquisition prospect for Intel, she says.
But the startup’s business mission also matters, Van Pelt says. A smaller company might fit well into Intel’s core business areas, or offer intangibles such as network benefits, she says.
“There’s no precise recipe,” Van Pelt says. “Sometimes, it’s just, look in your fridge,” especially when new growth opportunities appear.
Intel, when it acquired Mobileye last year, said it anticipated a market opportunity of $70 billion by the year 2030 in tech-assisted and fully autonomous vehicles, along with related data-centric businesses and services. The company predicted that the bulk of that revenue would come from vehicle systems in 2030, with the data services component approaching $10 billion. But Intel also estimated that the vehicle-related businesses would stimulate extra data center, cloud, and network activity amounting to an additional market greater than $40 billion by 2030.
Intel’s autonomous and tech-assisted driving component is still a nascent element among the company’s more established data-centric business groups, which made a record showing in Intel’s fourth-quarter 2017 earnings report. Those units, including groups for data centers, Internet of Things, and “programmable solutions,” together contributed 47 percent of Intel’s fourth-quarter revenue. The data center group led the pack with $5.6 billion in fourth-quarter revenue.
Van Pelt envisions Intel creating an “integrated data exchange” that would make it easier for companies such as insurance carriers and financial firms to obtain specific data sets that could support their existing business lines and new use cases. For example, she says, a company might want data on rush hour dynamics in cities with at least 500,000 residents. Intel could be the data broker that anonymized and standardized the aggregate data from many sources that could help answer such queries, Van Pelt says. The data might be sold in an auction-style marketplace, with Intel taking a revenue share of 30 to 40 percent, while the collector of the data reaped as much as 70 percent.
Intel could also play a role in helping enterprises to monetize the valuable data socked away in their own data centers or cloud storage sites, or to develop new business models that become feasible because the required data is now available, Van Pelt says.
“I would love to see Intel, in five to 10 years, have a $10-plus billion data services revenue,” Van Pelt says.