CONNECTED CARMyths and Opportunities

Prepared for the SIP AssociationParis, Sept 25th 2015

TODAY’S AGENDA

• Introduction

• Autonomous vs. Connected

• Connected Car applications

• The ecosystem

• Rules of the game

ADVERTISING

4 25/09/2015

Digital Business Empowerment in financial servicesThrough processes and technology, across four core domains

▶ Digital is much more than just technology and software. For any organization, becoming truly digital requires a different mindset and increased flexibility.

▶ It requires a redefinition of corporate structures, bodies and roles and use of new technologies

▶ We drive digital innovation for our clients, across four core domains.

How to ensure satisfaction across the entire journey, predict desires and directly

respond to them with a personalized

relationship, making every customer a social advocate for your organization?

CUSTOMER EXPERIENCE

How do you build trust, achieve

transparency and smooth regulatory compliance in this

new digital financial services landscape?

TRUST & COMPLIANCE

How can digital transformation

support business transformation

through the creation of new business models and the monetization

opportunities for financial institutions?

BUSINESS REINVENTION

How to ensure agile, flexible and scalable

operations, to compete successfully

in the digital age?

OPERATIONAL EXCELLENCE

5 25/09/2015

Atos at a glancePowering digital business transformation

Clients

Key solutions

Facts

We are an Integrated Digital Services Leader –

#5 in the World#3 in Europe

We are powering progress, and empowering

Digital business transformation

We deliver a complete value

chain of offers and services based on deep industry

expertise

Very significant presence in the Financial Services

Industry

Enabled by our world class partners

► Annual revenue circa €11 billion (incl. Bull and Xerox acquisitions)► Circa 95,000 employees in 72 countries (incl. Bull and Xerox

acquisitions)► Your Business Technologists. Powering progress

Delivering

Digital Transformation

CUSTOMER EXPERIENCE

TRUST & COMPLIANCE

BUSINESS REINVENTION

OPERATIONAL EXCELLENCE

► Consulting & Systems Integration► Big Data & Cyber Security► Managed Services► Cloud Computing services

through Canopy► Transaction & connected

services through Worldline

Renewing Enabling Providing Ensuring

6 25/09/2015

We are enabling our clients’ digital transformation end to end

c. €1.1bn10%

ITServices

€10,3bn90%

Merchant Services and Terminals

Financial Processingand Software Licensing

Mobility and e-Transactional Services

▶ Data analytics

▶ High Performance Computing

▶ Cyber-security

▶ Securization of the command systems

Big Data & Cyber-security

Consulting &Systems Integration

▶ Consulting & Technology Services

▶ ERP Implementation & Integration

▶ Solutions design, development, testing & deployment

▶ Application Management

Managed Services

▶ Workplace Services

▶ Application Operations

▶ Project Services

▶ Managed Infrastructure Solutions

▶ Network and Communications

Cloud & Enterprise software

▶ e-Consumer & Mobility

▶ e-Ticketing

▶ e-Government Collection

▶ Issuing Processing

▶ Acquiring Processing

▶ Online Banking

▶ Software Licensing

▶ Commercial Acquiring

▶ Online Services

▶ Private Label Cards & Loyalty services

▶ Terminals

7 25/09/2015

Atos driving innovationConstantly discovering new solutions to confront your digital challenges

Scientific Community / AscentA key thought leadership center▶ >100+ “creators of change”

Ascent – Journey 2016, Journey 2018

Emerging Technology Tours

Atos Research and Innovation Institute▶ Global R&D hub Patents >1900+▶ R&D > 2% revenue per annum

ZeroEmail & Enterprise Social Network▶ BlueKiwi, Sharepoint and Lync▶ Achievements: 60% mail reduction and

collaboration ratio of 20 against 2011!

Business Technology Innovation Centers (> 7 globally) ▶ Experts demonstrating key solutions,

leveraging partnerships and alliances▶ Innovation workshops▶ Technology showcase- demos- POCs

Co-Innovation for new solutions▶ Open technology and

Ecosystems management▶ e.g.: Connected Car; R-

Link tablets

8 25/09/2015

Atos historical footprint in the connected world

1980Payment Terminal

2009Smart MeteringErDF Linky

2011Connected CarR-link

2013Connected ApplianceB/S/H/

2015

Connected EverythingConnected CityConnected PatientConnected BuildingConnected Home

Initially only focused on data push and collection,Connected Living is now growing towards new business models

Initially only focused on data push and collection,Connected Living is now growing towards new business models

2004Speed Cams

2007Bike SharingEffia

2012Connected TruckMichelinSolutions

AUTONOMOUS & CONNECTED CAR

10 25/09/2015

Foreword - Definitions

Autonomous Vehicle Connected Car

11 25/09/2015

Autonomous Vehicle

Dramatic fall of accidents

A strong « societal » case

Time gain (traffic optimisation)

Electrification enabler

Less vehicles – sharing & mass transportation

Emission reduction

12 25/09/2015

Autonomous Vehicle

No more accidents?

Car Insurance - A « legal » business?

Consumer readiness

Responsibility& legal implications

Regulators’ reactions

Individual cars or individualmobility services ?

13 25/09/2015

Atos viewA gradual process based on a learning curve towards intelligent cars

13

Connected car Connected Driver Connected Consumer

• Clearly not an end to itself, but the starting point of profound industry revolution

• IVI served as test-bed for cooperation between OEM and technology providers

• Capture valuable insight into client behavior paving the way to future product development

• Increased car autonomy to improve road safety and user experience

• Addition of sensors & Safety generating more Data & Safety needs

• From IVI apps to car and customer-specific services including provisioning & payments

• Vehicle Relationship maintenance services

• The autonomous car, the Internet of cars, the digital retail, the ecosystem built around the car maker, will shape a new digital living relationship

• Integrated set of convenience services, in & out of the car

• Business Reinventionfor car industry and those related– services incl. insurance

14 25/09/2015

Connected Car Evolutionin Digital “Connected” World

2010 2015 2020

"Demotorization" trend

Mobility anywhere everywhere – high tech emotional appeal

New regulations are coming (UE eCall, SVT, Russian ERA-Glonass)

Electric vehicle system requires advanced connected services

Massive communication between cars (Car2x)

Content data available in the cloud

Telco Mgt mass marketTCU & Head-Unit are affordable and become a new sales channel

Car Data are valuable

Connected services a high % of the car manufacturers growth margin

2006 2007 2008 2009 2011 2012 2013 2014 2016 2017 2018 2019

Telematics 1.0

< 1M units

Telematics 2.0

1-6M units

Telematics 3.0

2M-10M units

Telematics4.0

10M-100M

Nissan US first fully autonomous car (no 3D map) for showrooms

JLR , Daimler, Conti target for fully autonomous

2021 2022 2023 2024

15 25/09/2015

The societal case for connected car : safety

16 25/09/2015

The societal case for connected car : insurance value chain

Impact of vehicle connectivity on U.S. Insurance value chain

Usage & Usage & Usage & Usage & BehaviourBehaviourBehaviourBehaviour

10 -30% of premiums

Crash Crash Crash Crash PreventionPreventionPreventionPrevention

20 - 35% of crashes

FastFastFastFast & & & & Correct Correct Correct Correct ResponseResponseResponseResponse

5 - 15% of savings

Claims & Claims & Claims & Claims & CostCostCostCost

ReductionReductionReductionReduction

30 - 80% of savings

Law Law Law Law EnforcementEnforcementEnforcementEnforcement

20 - 30% of savings

17 25/09/2015

Customers’ readiness…. and expectations

WouldWouldWouldWould switch to switch to switch to switch to anotheranotheranotheranothermanufacturer manufacturer manufacturer manufacturer if only one to offerfull access to apps, data & media

WWWWillingillingillingilling to to to to paypaypaypay for services for services for services for services in my car on a subscriptionmodel basis

21%

32%

0%

5%

10%

15%

20%

25%

30%

35%

2014 2015

20%

37%

0%

5%

10%

15%

20%

25%

30%

35%

40%

2014 2015

Source : McKinsey , 3000 recent car consumers

CONNECTED CAR APPLICATIONS

19 25/09/2015

The connected consumer

Megane Movie

20 25/09/2015

A wealth of applications

21 25/09/2015

A wealth of applications.... for insurance

Customer Relationship

Connection with Agent

Thief and Fraudprevention

Accident prevention –weather & traffic

Accident prevention – phone & texting reduction

Mileagereduction / Safer traveling

UBI & Temporaryinsurance

Collaborative insurance & car sharing

Telematics : - UBI- Fleet Mgt- Ecall, driver & car assistance,- Car diagnosis….

ECOSYSTEMLined up co-opetition

Ecosystem : Revenue flows

Source: Atos, Envisioning automotive futures connected cars for smart mobility

24 25/09/2015

All car manufacturers with no exception are working hard on telematics

▶ ABSOLUTELY CRITICAL

▶ Loosing money on car manufacturing & Makingmoney on car parts

▶ Feed dealerships and createcustomer loyalty

▶ Respond to car sharing, new usages and « mobility » barbarians

▶ FOCUSED & AMBITIOUS

▶ 80% to 100% vehiclesequiped by 2018

▶ Acquisitions & Partnerships :

▶ Toyota – Insure the Box acquisition

▶ BMW – Here mapping capabilities & co-developments with Mercedes&Audi

▶ Renault – The Floow insuranceanalytics & Atos technologies

▶ All spending 100Ms in user interfaces & telematics

25 25/09/2015

Embedded telematics vehicle coverage

0

10

20

30

40

50

60

70

80

90

100

2010 2012 2014 2016 2018 2020

Europe US China

Annual Fitment Rate of Embedded Telematics (%)

Source: Morgan Stanley & BCG

26 25/09/2015

Telco strategy… being an end to end provider

26

▶ B2C Sales> SIM > Box > Install > Network > Services > Payments >

▶ Barriers:

– Need clarification in terms of economic model – BtoB, BtoC?

– Car manufacturers’ and Gafas value propositions and conflicting interests

▶ Examples :

– OBS Fleet avec PSA

– ByTel with PSA (Connect Apps)

– Sprint withChrysler

– Vodafone –rachat de Cobra

– Telefonica – UBI in Germany

– …

27 25/09/2015

The role of Google & Apple

▶ Google Auto, Apple Car Play & Mirrorlink are used to get

accessible smartphone apps into the vehicle (“mirroring”)

▶ The Primary value added is a better integration with the vehicle

& improve driver safety:

- Car speakers

- Steering wheel control

- Apps “white-list”’

- Better GPS (“dead rekoning”)

▶ Most of the IVI apps will be supplied into the vehicle by this

mean

▶ Clearly a more ambitious agenda at hand :

– Google car, services and venues in Health and Insurance

– Apple car

A WORLD OF OPPORTUNITIESHow to Play

29 25/09/2015

Atos first hand insights into Key Success factors, thanks to 20+ years experience in connected objects

Trust

Ease of Use

IT Modernisation

AppliedAnalytics

Open Ecosystem

30 25/09/2015

Trust & Risk Management

Managing Cyber-risk

• Datacenter physical protection

• On premise « phygital » protection (car and data centers intrusion detection)

• Cloud architecture &protection

• Machine to Machine « bigdata » protection

Trust

31 25/09/2015

R-Link elected number one on usability test!

Ease of UseRenault R-Link B2C, elected number one on usability test

Ease of Use

32 25/09/2015

IT - Connected Vehicle Playing Field IT Modern

33 25/09/2015

Connecting the dotsAtos Connected Living Solutions

Connected Vehicles for Automotive & Transport, Insurances

& Services

Connected Building Indoor Location of persons & assets,

remote diag of buildings & infrastructures

Connected City and Infrastructure

Part of Worldline Smart City, electric charging stations, Veh. sharing , smart

sensing

Connected Home Connected appliances’ services, energy

monitoring and connected Entertainment

EasyConnectTo connect your products

Contextual Mobility

To create your Audience

Big Data AnalyticsTo optimise your profitability

Consumer support services To monetize the services

IT Modernization

34 25/09/2015

eCar

▶ Onboard-units

▶ Dashboard / Driver interfaces

▶ PDA & Mobile phone interfaces

▶ Telecommunication links

▶ Content display

▶ Car2X-communication

Charger

▶ Authentication

▶ Billing

▶ Communication

▶ Content display

▶ Fraud prevention

▶ Billing

▶ CRM

▶ Reservation

▶ Managed driving(navigation & routing)

▶ Inventory Management

▶ Content distribution

▶ B2B-portals

▶ Security

Back Office

Customer Care

▶ Call Center

▶ Breakdown & Emergencyhandling

User

▶ Self-care portal

▶ Booking & Reservation

▶ Content ordering

▶ Charging Interaction

Communicationnetworks

The full technology & operations picture : example Atos e-car platform

IT Modern

Open Ecosystem

35 25/09/2015

Applied Analytics

From traditional View To Connected, customer centric user cases

« My son takes the car »

« I happen to drive near my agency »

« I infringe the law »

« I just had an accident »

« My car is broken, a part is to break »

« I am falling asleep »

AppliedAnalytics

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© For internal use

25/09/2015

Thank You !

laurent.gibert@atos.net

APPENDIX