Article on Microsoft in the Telematics world --Al
Microsoft Muscles In On Auto Telematics
Satellite News 05/06/02
author: Peter Warner
(c) 2001 Phillips Business Information, Inc.
Microsoft Corp. [MSFT] is continuing to move ahead aggressively in the telematics market to bring the computer and the Internet to the road. At the ITS 2002 America annual meeting, held last week in Long Beach, Calif., the software giant announced that Volvo Cars of North America, a unit of Ford Motor Co. [F], will offer a new line of vehicles with in-vehicle computing systems fueled by Microsoft CE for Automotive technology.
This partnership furthers Microsoft's strategy of teaming with suppliers to deliver telematics software and services for cars. Microsoft believes this strategy is a key to the growth of the market. Microsoft's earlier telematics entry, the AutoPC, showed that a simple transfer of the desktop PC model to the dashboard was not what the market needed.
Through these partnerships, Microsoft wants to deliver its own content and services. According to Ed Lansinger, technology marketing manager for Microsoft, "We will provide products, both Internet technology and infrastructure, to enable telematics services, such as predictive traffic advisories that enable drivers to get to their destination on schedule by avoiding traffic." He added, "For this market to take off, the automakers and technology suppliers are going to need to form strong partnerships. Both sides are finding themselves in unfamiliar territory."
Microsoft works with virtually all of the major automakers worldwide to enable services and devices, said Jessica Peterson, Microsoft's manager for the automotive business unit. She explained, "The ability to develop once, and then with minor modifications be able to put a product into a high-end car and then more of a broad-scale car is something the automakers have asked us to do."
This year six manufacturers will offer vehicles using Microsoft telematics technology. Microsoft's Windows CE for Automotive, flexible enough to suit a range of applications, is being used in information and entertainment systems as well as for graphics capability of various telematics devices.
The Windows-powered solution provides Volvo motorists with access to navigation systems in their cars. "The Volvo Car's navigation system is a compelling value-add to our customers," said Peter Rask, vice president of global communications at Volvo Car Corp. "Our goal is to enable our customers to safely and efficiently extend their connected lifestyle to the road. This in-vehicle computing solution powered by Microsoft technology allows us to realize that objective."
"Putting Microsoft technology in our vehicles takes us one step closer to the end-to-end connectivity that our consumers are asking for," said Phil Bienert, manager of CRM, e- Business and future product strategy for Volvo Cars of North America LLC. "From our agreement with MSN to our use of Microsoft Web technology to using Windows CE in our vehicles, we see Microsoft as an industry partner that drives our business today and in the future."
In March, Microsoft announced a partnership with BMW for the 7 Series to feature Microsoft's Windows CE. This announcement came shortly after Microsoft's automotive business unit launched Windows CE for Automotive v3.5, the newest version of its telematics software platform based on Windows CE. In January, Microsoft teamed with Accenture on a telematics venture. Lansinger described this alliance, "We are working with Accenture to provide a common platform in every vehicle and to enable technology to be easier to use in any application." This initiative calls for Accenture to provide the integration services for telematics applications based on Microsoft software such as Windows CE for Automotive. The concept behind this alliance is to put together a series of services, along with a network of partners, to move the industry forward.
Microsoft's strategy of enabling all types of telematics devices and services and partnering with automakers and other players in telematics definitely moves them closer to their goal of connecting computer users in the vehicle environment. But the software giant faces some bumps in the road ahead.
Thilo Koslowski, an analyst for the Gartner Group, noted that "Microsoft is a player, but it is not as strong as it would like to be. The company is looking to tie all applications to wherever thepperson is, including the vehicle." The automakers understand this, but they are looking to achieve the same goal."Automakers want to deliver the value-added services that telematics can offer, so they are skeptical of Microsoft as it has the same goal," he noted.
This lack of trust of Microsoft could cause many automakers to be uncertain about entering formal relationships with the software maker. Because of this, Microsoft's partnerships have been verywwell defined by the automakers to ensure where each party stands.
"Microsoft's goal of delivering value to the customer in the vehicle will come if and when it creates compelling pull-demand for its services. This environment will push automakers to Microsoft so they can offer these services," Koslowski said.
(Ed Lansinger, Microsoft, edlans @microsoft.com, 425/882-8080; Peter Rask, Volvo Car Corp, 201/768-7300; Thilo Koslowski, thilo.koslowski @gartner.com, 408/468-8247)
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