Microsoft ()
Microsoft Corporation (MSFT) has been actively collaborating and engaging in partnerships to boost its foray into connected cars. The idea of a connected car best portrays how automobile industry is embracing technology, catering to people who expect their car’s computing power to match its horsepower.
Microsoft’s interest in connected cars brings it in direct competition with Google (GOOG) and Amazon (AMZN), as automobile companies are picking cloud computing platforms to cater to their growing needs.
The connected car can be defined “as a vehicle using mechatronics, telematics and artificial intelligence technologies to interact with the environment to provide greater safety, comfort, entertainment and, importantly, a “connected-life” experience.”
While automobile manufacturers have always adopted the best technology for the internal functions of vehicles, the idea of a car connected to the outside world has opened gates for software and telecommunication companies to enter the automobile market.
Projections
McKinsey estimates that the dramatic increase in vehicle connectivity will increase the value of theglobal marketfor connectivity components and services to €170 billion by 2020. PricewaterhouseCoopers suggests that driven by factors such as driver assistance, safety, entertainment, well-being, vehicle management and mobility management, the worldwide sales of connected car products will increase almost fourfold between 2015 and 2020, adding more than €110 billion ($149 billion) in revenues in the passenger car segment alone.
The connected car market is growing 10 times as fast as the overall car market according to a report by BI Intelligence. Further, it is expected that 75% of the cars shipped globally in 2020 will be built with internet-connection hardware. These figures make it easy to understand why how connected car is a huge business opportunity for technology, telecommunication and automobile companies.
Journey To The Cloud
The future of connected cars is bright, and as the adoption of these vehicles rises, the connection between automobile manufacturers and these technology providers will strengthen. With more and more connected cars on the road, there is huge amounts of data received from sensors which needs to be analyzed and protected. Placing in-house servers, software and other infrastructure will involve expertise and huge costs for automobile manufacturers.
This is where cloud computing comes into play. It allows companies to rent storage, software and processing power over the internet and is becoming hugely popular. An Accenture report points out that, “more and more automotive companies are using the cloud to achieve benefits throughout the value chain, such as faster time to market, more flexible collaboration and data sharing.”
In January 2016, Volvo, Nissan, Harman, and IAV joined the list of Microsoft’s existing automobile partners such as Toyota, Ford, Delphi, and Qoros to enhance connected car strategies. Microsoft’s Peggy Johnson believes, “In the near future, the car will be connected to the Internet, as well as to other cars, your mobile phone and your home computer. The car becomes a companion and an assistant to your digital life. And so our strategy is to be the ultimate platform for all intelligent cars.”
Recently, the Renault-Nissan alliance signed a global multiyear agreement with Microsoft to advance connected driving experiences worldwide by partnering on next-generation technologies.
“The companies will work together to develop next-generation connected services for cars powered by Microsoft Azure, one of the company’s intelligent cloud offerings. These new services will improve customer experience via advanced navigation, predictive maintenance and vehicle centric services, remote monitoring of car features, external mobile experiences and over-the-air updates,” read the press release.
The Renault-Nissan Alliance is looking at initiating mass-scale adoption of such autonomous and connected car technology by offering such features in vehicles at affordable prices. The alliance plans to launch at least 10 autonomous driving technology vehicles by 2020 “with services to maximize better use of newly found in-car free time.”
While the future of connected cars is exciting, the exposure of car to internet makes it susceptible to cybercrime such as hacking and software malfunctions. Thus as companies advance with investing into connected car technology, the ability to handle and combat risks like cybersecurity are equally important. Microsoft understand such risks and have been investing to enhance the security protocol; it is the third biggest buyer of cybersecurity companies with 13 acquisitions completed so far.
Overall, connected cars are rapidly changing the fabric of the automobile industry and are mapping their journey to the cloud.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
