Microsoft is increasingly looking at cars as a key part of its strategy to expand the company’s reach. While this does not include investments in autonomous vehicles, the company has been ramping up investments in connected vehicles.
By doing so, Microsoft is venturing into the burgeoning world of Internet of Things (IoT) devices. There are currently 7 billion such devices in the world today, technology research firm Gartner has estimated there will be 20 billion or more connected devices in the world by 2020.
While many of these devices will be remote monitors and sensors for industrial purposes, one area of interest is automobiles. In fact, many of the leading automakers are currently partnering with technology companies to develop Application Program Interfaces (APIs) for cars. These include programs to manage remote maintenance, insurance, security, and a slew of other applications.
As part of the initiative, Microsoft announced an agreement with Renault-Nissan last September. The agreement will allow the automaker to outfit its vehicles with Microsoft’s Connected Vehicle Platform via its Azure cloud service.
The goal of the partnership is to collect data on usage and other metrics which will then be plugged into Microsoft products including Office, Skype, and its Artificial Intelligence (AI) virtual assistant, Cortana. In fact, many of these services are expected to launch in the second half of this year.
The approach marks a change from Microsoft’s stance on smartphones, where it played catchup from almost day one. However, Microsoft is not the only technology company seeking to enter the space. IBM has announced partnerships with BMW and General Motors, and Amazon is busy offering Alexa-based services to automakers.
The drive to transform the car into a connected device coincides with two other developments which are rapidly altering transportation – self-driving cars, and electric cars. Taken together it would appear that the vehicles of 2025 or 2030 will be dramatically different from today’s vehicles.
In the end, this marks a massive revenue opportunity for Microsoft, one which could add billions in revenue to the company.
As such, it is would appear that Microsoft is taking a more proactive approach compared to other technology trends which caught the company off guard. In fact, the company is taking the opportunity so seriously that it recently hired Cisco’s IoT chief, Tony Shakib, to take control of its efforts.
While it is too early to know whether these developments will pay off, partnerships with Renault-Nissan (the 4th largest automaker in the world) are a step to ensure the company has a foothold in the market.