Microsoft and Toyota recently announced a new strategic partnership to build a global next-generation telematics services platform based on the Windows Azure cloud technology with both companies investing 1 billion yen ($12 million) in Toyota Media Service Co., a Toyota subsidiary offering digital information services. The technology will first be implemented in Toyota’s electric and plug-in hybrid vehicles in 2012 followed by the availability of a global cloud platform by 2015 providing affordable and advanced telematics services to customers in the 170 countries where Toyota is present. Applications will include battery charging status tracking, control of charging schedules in order to benefit from the lowest rates, control of heating and air conditioning systems while the vehicle is plugged into the grid, dynamically monitoring range and miles until the next charging station, music streaming, and information services.
This partnership highlights an important shift in the telematics industry with (cloud-based) software technology vendors playing an increasingly important role. Cloud-based solutions offer many benefits in terms of hardware and operating system independence, costs and scalability, and always up-to-date information but also represent challenges in terms of the dependence on the continuous availability of a wireless connection.
Toyota has partnered with a large number of telematics vendors in the past including Denso, Harman, Aisin, and ATX often working with different suppliers in different regions. With globalization being embraced by the automotive industry, it is no surprise Toyota is looking for partners which can support its products on a global level and at acceptable costs. These are exactly the benefits Microsoft is touting of its enterprise-grade, scalable Windows Azure platform. Obviously, this is not a trend traditional telematics vendors will be welcoming.
Cloud-based platforms aren’t entirely new to Toyota, having announced the Entune infotainment solution at CES earlier this year, and which was referred to by Toyota’s Toyoda as likely to benefit from the Microsoft deal in terms of new applications. Having lagged other car OEMs in introducing connected car technology for many years, Toyota is now firmly embracing the global connected car concept as a key differentiator in its fight against its competitors.