The rise of the software-defined vehicle

Heiko Huettel, Microsoft’s head of automotive for EMEA, discusses the trends and technology that are transforming a region at the forefront of vehicle innovation

Alex Smith
By Alex Smith on 05 March 2021
The rise of the software-defined vehicle
Microsoft

What challenges and opportunities do you see currently in the EMEA automotive market?
Our biggest challenge in this space is driving transformation for our customers. Current car companies need to be more cloud- and software- enabled and providing the base layer for this effort is one of our most important tasks.

Software enablement involves bringing more generic compute and more centralised compute to in-vehicle architecture. This means less wiring and consequently less hardware, with more functions built into software. We have seen this in smartphones with the disappearance of physical keyboards, and we’ll see physical elements in the car disappearing in the same way. It’s getting much cheaper and reduces time-to-business to implement differentiating features in software, and it lowers the cost of variations you need for each market. This so-called “software-defined vehicle” is a core strategic pillar in our efforts with our customers.  

The software-defined vehicle allows you to be agile with differentiating experiences. If you have physical buttons and single-function embedded software in the car, it’s likely that you cannot change the way the driver envisions them. If you have a software-defined approach you can change experiences over time and add value to the vehicle via OTA updates. 

You joined Microsoft directly from a position within the automotive industry. What is it about the Microsoft offering you believe can offer automotive leaders the greatest competitive advantage?
Alliances and partnerships are what Microsoft is all about. We want to join forces with the leading suppliers and system integrators to bring our cloud technologies to the car. Everything we’re seeing is bigger than one partner, including Microsoft, and we need to join forces across the board with companies to build an integrated platform based on open source and cloud technologies. 

It’s one of the major reasons I joined Microsoft. It has a vision to help with the transformation of car companies, and a broad set of people with different mindsets and skills is needed to achieve it. To execute on this vision, we are willing to bring together our best people with great knowledge from different industries. For example, we recently announced a use case with Mercedes-Benz USA, where connected remote experts with local technicians use Microsoft HoloLens to help them repair a car. We as Microsoft strive to achieve more for our customers by leveraging our technologies in the best way to enable our partners and our customers. 

Addressing the challenges of climate change is a topic for conversation throughout the automotive industry. Where are Microsoft solutions powering innovation for auto manufacturers to counter the effects of fossil fuel powered vehicles?
Microsoft has committed to be carbon negative by 2030, and we are also helping our customers to meet their sustainability goals by leveraging our products and capabilities to enable sustainable solutions. For automotive companies, vehicle designs and how they are used is the foremost challenge. Electric vehicle platforms drive increased use of in-vehicle software and allow for more software- and data-driven optimisation for maximum efficiency. Fleet management solutions can help further reduce carbon footprint for electric and internal combustion engine vehicles, and address complex aspects such as routing, traffic, predictive maintenance, and driver behaviour.  Software enablement can also lower production costs and emissions by using less physical and complex parts, by enabling more efficient processes and gaining efficiency in supply chains, including data-driven circular economy approaches.

Multi-modal transport is one of the biggest trends we’re seeing for the future. Moving to mobility-as-a-service solutions such as ride hailing and car sharing means less cars being used more often, with commensurate improvements in carbon footprint. 

What changes have you seen the Covid-19 pandemic bring to the automotive industry, and do you think will be permanent?
As with every other industry, it has led to a huge acceleration in digital transformation over the past months. We have moved to home offices and have been discovering different ways of interacting between each other. It has shown people that they are able to do their work in a different way. 

Weidmüller, a German industrial connectivity firm was able to remotely set up and maintain industrial machines around the world using the cloud and Microsoft HoloLens Mixed Reality Headsets. A solution initially conceived for saving time and travel cost suddenly became critical for business continuity during the pandemic. 

Lockdowns have acted as behavioural ‘circuit breakers’, nudging people to consider their mobility needs and choices. An update in remote work will accelerate the trends we’ve seen around mobility: more intermodal, more about sharing, and people will really begin to question if they need to invest in a privately owned car. This won’t happen immediately, but the movement towards remote working is here to stay.

This is this is a huge challenge for the automotive industry. What role would we see dealerships having? What role do we see for the build-and-sell model? There is no final answer at the moment, but we at Microsoft are there to help. We have the technology and people to really help our customers stay in that business and to change for the better.

This article was originally published in the Winter 2020 issue of The Record. To get future issues delivered directly to your inbox, sign up for a free subscription.

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