Virtual assistants with AI brains and sweet voices seem to be the order of the day. Alexa from Amazon is already making waves with its many integrations with appliance companies and automakers, and now Microsoft has launched its own Azure-Cloud-based Connected Vehicle Platform (CVP) that will feature Cortana on Nissan-Renault Alliance automobiles.
At the heart of this integration is the proliferation of cloud-based software, or SaaS (Software-as-a-Service), which is essentially any software application being delivered from a remote server location over the Internet.
Typically, there’s a device or product that is used to deliver the functionality part of the software to the end user.
In the case of connected automobiles, it is the onboard connectivity platform, such as Microsoft’s CVP that runs off Azure Cloud and serves apps like Cortana. In the case of home assistants it is devices like Amazon Echo and Google Home, both of which run on their respective cloud environments. In the most straightforward form, it’s your PC or your smartphone connected to the Internet.
But any device that can be hooked up to the Internet can be part of an ecosystem of interconnected devices. Collectively, these devices, when operating within a secure network, make up what is called the Internet of Things, or IoT.
That’s probably oversimplifying things, but it captures the essence of what’s going on in today’s world. As more devices become part of IoT systems, users get more control over their digital lives.
Connected cars are going to be the next IoT growth wave, along with smart home appliances. These are two key areas where SaaS applications like Cortana or Alexa can excel, and the move to create partnerships has already been initiated by Microsoft and Alexa.
In terms of the CVP, Microsoft has its priorities sorted out: “predictive maintenance, improved in-car productivity, advanced navigation, customer insights and help building autonomous driving capabilities.” These are the objectives outlined by Peggy Johnson, EVP Business Development at Microsoft.
The key to Microsoft getting into this space and staying there for the long run is the standardization of the platform across the entire range of Nissan-Renault Alliance automobiles. With a standard platform, NRA will be able to use various operating systems, programming languages and so on to customize the consumer experience.
Other forms of SaaS integration are already underway, with BMW showcasing its in-car Cortana capability, Ford and Volkswagen planning Alexa integration into their vehicles, and even Volvo recently announcing Skype for Business integration into its 90 series cars.
This is a crucial market for Microsoft, not only because it’s a relatively new one, but because the potential is massive. Millions of cars using Azure cloud and Cortana could potentially translate to billions of dollars in predictable revenues each year for Microsoft.
We believe Microsoft is going to ride this market hard and form even more key partnerships with top automobile makers, as will Amazon, Google and Apple. And, in general, 2017 should see a massive surge in deal-making between technology companies and consumer product companies.
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