How Microsoft (MSFT) Is Making Inroads Into The Connected Car Space

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The shift of focus from 'under the hood' to the ‘car console’ has opened doors for advanced technologies such as artificial intelligence, cloud computing, big data and machine learning into the automobile world. These technologies are instrumental in bridging the gap between fiction and reality when we talk about connected and autonomous vehicles.

Here’s a how Microsoft (MSFT) has made inroads into the connected car space.

Cognizant defines the connected car 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.” The connected car is deemed to save considerable time and resources, while making mobility more efficient, safer and enjoyable.

According to the U.S. Department of Transportation (DOT), the connected vehicle technology can tackle some of the biggest challenges in the surface transportation industry— in the areas of safety, mobility, and environmental concerns. With the safety applications in connected cars, the number of potentially fatal crashes can be avoided, thereby reducing the number of lives lost.

It can further help improvise the transportation system by reducing congestion, and thereby travel delays.  A Bosch and Prognos study ’Connected Car Effect 2025’ estimates that 260,000 accidents would be avoided, 400,000 tons of CO2 emissions saved while lowering material and damage costs by €4.43 billion.

The global connected cars market is expected to grow 270% by 2022 with more than 125 million connected passenger cars with embedded connectivity to be shipped during 2018-2022, according to a report by Counterpoint. The trend is catching up with some of the biggest auto manufacturers making significant investments towards the connected car segment.

A BCG report estimates that, “the market for in-vehicle connectivity is expected to reach €120 billion by 2020.” While the cloud-based solutions market for automotive is projected to grow to $66.95 billion by 2022. This creates a huge business opportunity for original equipment manufacturers, telecommunication and technology players.

With its inherent strength in operating systems to the most cutting-edge advances in AI, voice recognition, multi-touch and gesture recognition, Microsoft technology is set to deliver the most personalized, smart and seamless driving experience. All these advancements rest on its hyperscale cloud—Microsoft Azure.

In January 2017, Microsoft launched its Connected Vehicle Platform. The service platform with its foundation in Microsoft Azure focuses on five key elements—predictive maintenance, improved in-car productivity, advanced navigation, customer insights and help build autonomous driving capabilities.

While prominent names, including Volvo, Nissan, Harman, IAV, Toyota, Ford, Delphi, and Qoros were already partnering with Microsoft to use tools that Azure offers, the launch of this platform defined Microsoft’s commitment to engage with automobile players to become the most preferred platform for intelligent cars, from connectivity features to autonomous driving.

BMW is building its open mobility cloud on Azure while Microsoft is supporting Renault-Nissan Alliance to launch more than ten vehicles with autonomous driving technology by 2020. Last year, TATA Motors India collaborated with Microsoft to provide connectivity features on mainstream, mass-market vehicles at affordable prices. TATA Motors is India’s largest automobile company is a $45 billion organization and a part of the $100 billion Tata group.

Microsoft and Volkswagen have recently entered a strategic partnership to create Volkswagen Automotive Cloud, powered by Azure and IoT Edge platform. It is projected that from 2020 onwards, more than 5 million new Volkswagen brand vehicles per year will be fully connected and will be part of the Internet of Things (IoT) on the cloud.

“The strategic partnership with Microsoft will turbocharge our digital transformation,” said Dr. Herbert Diess, CEO of Volkswagen AG. 

Microsoft is among the top spenders on research and development globally; its R&D spending was $14.72 billion during 2018 respectively—accounting to 13% of its revenue. Microsoft has acquired 28 companies since the beginning of 2016 till now. One of its recent acquisition Bonsai will help experts and developers to build the “brains” for autonomous systems to help them accomplish tasks.

Additionally, it has recently tied up with Mapbox which is integrating its Vision SDK with the Microsoft Azure IoT platform to improve the driving experience. Microsoft is conscious of the strong firewall it needs to create in order to prevent cybercrime for the successful advancement of connected car technology.

Overall, industry partnerships and technological edge are helping Microsoft establish its strong hold within the connected car segment and the cloud computing market in general. Microsoft is right on course in its cloud first, mobile first journey.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: News Headlines , Technology , Cloud computing , Software , Stocks
Referenced Symbols: MSFT

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