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Jared Hamilton
From: Jared Hamilton
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Michael Esposito

Michael Esposito President

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The True Issue is Control of the Dealer’s Data, Isn’t It?

This week’s Automotive News features a story about a DMS vendor that, in the name of protecting the dealer’s data, doesn’t allow third-party vendors to have access to that data without going through an expensive certification process. This issue was also recently addressed in a Woods & Seaton briefing posted on the Standards for Technology in Automotive Retail (STAR) web site.

In the last decade, the issue of data ownership has been raised many times and all DMS providers agree that dealerships own their own data. However, apparently all DMS providers do not agree that dealers control their own data. To assume that you as a DMS provider know more than the dealer about what is good or bad for his/her business is ludicrous.  

The question of liability is often raised by DMS providers who are reluctant to let third-party vendors have access to data. If the third-party vendors use this data for nefarious purposes, the argument goes, that it opens the DMS provider up to potential lawsuits. Yet, if that DMS provider certified a vendor and the vendor did the same thing, wouldn’t the provider be MORE liable, since they actually certified the vendor? The liability issue is truly a red herring.

Another issue to be addressed when talking about control of data is the certification process. A certification process in and of itself is fine; but when a DMS provider uses that process as a roadblock to competitors, who are they really serving—their customers’ best interests, or their own best interests?

Some DMS providers have a certification process, but they don’t hinder third parties who aren’t certified, from extracting data from a dealer's system. In some cases, they may have the dealer indemnify them in case there is an issue with the non- certified vendor, but in this case it’s the dealer who’s calling the shots—not the DMS vendor.

Additionally, you have to question whether any DMS provider should make profit on the certification process. Most third-party vendors understand there are costs associated with the certification process; such as specification development, set up and testing. But when a DMS provider charges exorbitant certification fees both from an upfront basis and on a monthly basis, and refuses to allow access to the dealers data to anyone who isn’t certified, then isn’t that DMS vendor making money from the dealer's data? If a DMS vendor made millions a year by selling the dealer data (past history) or makes millions a year by controlling access to a dealer’s data (present situation) is there truly any difference?

Most dealers I know are intelligent and savvy business men and women. They make decisions every day that impact their dealership. This is why I continue to advocate open standards for all aspects of data exchange between OEMs, DMS solutions, and third-party vendors. Don’t let the issue of data security fool you into letting someone hold your data hostage. The more dealers continue to demand secure and open standards, the more they will benefit. 

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