Automakers, Software Partners and the Road to Innovation

Change is here and it’s being driven by digital transformation.

In just a few short years, we’ve witnessed the rise of new business models as well as new ways of working and playing that we couldn’t have predicted a decade ago.

Now it’s the auto industry that must pivot and embrace the future, as the era of the software-defined vehicle is on the rise.

Automakers have less than 10 years to adapt to the new digital reality, or they will become obsolete. Their first step is to accept that they can’t simply be manufacturing or transportation companies anymore – they need to be technology companies. Because in the new digital economy, if you’re not a technology company, you’re in trouble.

Changing Perspectives to Achieve the Vision

For the most part, automakers are aware that their future value will be driven less by how they make a car and more by how they use data and digital technologies to deliver winning products and user experiences.

However, most industry discussions of how software-defined vehicles will usher in the future of mobility revolve around 20^th century constructs that fall short of a truly software-defined vehicle.

Today’s popular definition of a software-defined vehicle revolves around how many millions more lines of code will be running in a vehicle, over-the-air (OTA) software updates and Zonal architectures. Firstly, more code running in a vehicle does not make a vehicle software-defined. In fact, if a vehicle requires millions more lines of code to function, this is more likely a symptom of not having a sophisticated software architecture than an indicator of software innovation. As for OTA and Zonal, they don’t make a vehicle software-defined, either. 

Why? Because while OTA is still a fairly novel technology in the automotive industry, developing, testing and deploying software updates is an extremely resource-intensive activity that takes many months. Very soon, automakers will need to modify and update vehicles in real time.

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These examples illustrate how hard digital transformation is and why OEMs need to go even further than they currently are. Software-defined technologies have been developing over the past couple of decades in the data center space, but automakers don’t have decades to catch up.

The Case for Working With New Specialized Software Partners

With so much change required, and such a short amount of time to get it done, who will cross the finish line first – and who will not cross at all?

Developing competencies in digital innovation is very different than the hardware-centric methodologies OEMs and Tier 1s traditionally have excelled in. And unfortunately, just like millions more lines of code do not make a vehicle software-defined, no amount of new software hires can quickly or easily drive this change through an organization.

This is why software-defined vehicle infrastructure partners play a vital role. Automakers, traditional suppliers and specialized new software partners should coexist in this new mobility ecosystem.

Automakers and Tier 1s are experts in producing winning driving dynamics, but producing superior digital dynamics is a different beast.

Some automakers may ask themselves, “Shouldn’t we build this ourselves?” Why don’t automakers develop and manufacture their own ECUs? Or their own cameras? Because automakers recognize they are better served by focusing on innovating the elements of vehicles that make them distinctly theirs, not the enabling (albeit essential) ones.

Also, hiring a new software engineering team to build a software infrastructure from scratch is less cost-effective and more time-consuming than working with a software partner who can get OEMs ramped up quickly, which is key in the race to digitizing vehicles.

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Given what is at stake, there isn’t a single automaker who would say that “decent,” “average” or “good enough” vehicle infrastructure software will sufficiently empower their organization to unleash data-driven innovation.

To become leaders in the digital era, automakers need “high-performance” software infrastructure to create digitally dynamic vehicles and user experiences. Working with software partners, automakers can make these goals a reality in less time and with greater efficiency.

Jeffrey Chou (pictured above, left) is co-founder and CEO of Sonatus, where he works to accelerate the digital transformation of the automobile. He helped pioneer digital transformation technologies for companies such as Cisco and Brocade.