Connected vehicle platform could be a catalyst for Microsoft stock as it has widespread applications in multiple industries.
- At CES 2017, Microsoft showcased its Connected Vehicle Platform for car makers.
- The platform is based on the Microsoft Azure cloud, which will handle all data from connected vehicles.
- Renault and Nissan are the first car makers to commit to the Connected Vehicle Platform.
At the Consumer Electronics Show (CES) in Las Vegas, Microsoft (NASDAQ:MSFT) announced its Connected Vehicle Platform, a set of services built on the Microsoft Azure cloud and designed to empower auto manufacturers to create customized connected driving experiences.
Nissan (OTC:NSANY) and RENAULT SA (OTC:RNLSY) are the first car makers to commit to the Microsoft Connected Vehicle Platform. In Nissan’s CES keynote, CEO Carlos Ghosn announced that Microsoft's platform will power next-generation connected vehicles, developed by the Renault-Nissan Alliance, with advanced navigation, predictive maintenance, remote monitoring of car features and more. Nissan also demonstrated on stage how Microsoft's smart assistant Cortana can enhance a driver’s experience.
CES attendees were invited to take a test drive in a highly automated vehicle to understand how the cloud and artificial intelligence can enable personalized in-car experiences, and see how cars securely “talk” to other cars, how they monitor what is happening in their surroundings to improve safety, and how cars can adapt to different driving styles to deliver more personal driving experiences. According to Microsoft, these emerging technologies will also enable new, flexible insurance models.
The new Microsoft platform consists of a comprehensive set of Microsoft services and products that span the physical (car) and digital (cloud). "This is not an in-car operating system or a 'finished product," notes the Microsoft news release. "It’s a living, agile platform that starts with the cloud as the foundation and aims to address five core scenarios that our partners have told us are key priorities: predictive maintenance, improved in-car productivity, advanced navigation, customer insights and help in building autonomous driving capabilities."
"The Microsoft Connected Vehicle Platform, built on Microsoft’s cloud, leverages the best of Microsoft technology, which prioritizes global scale, security, and flexibility at a fundamental level," notes a Microsoft whitepaper titled "Empowering automotive innovation," focused on the Connected Vehicle Platform. "With global availability supported by 38 data centers around the world, including China, the platform gives OEMs a secure and reliable cloud. And automakers can customize and innovate on the platform in whatever manner they choose, including hardware, software, and services from third parties and other vendors. Microsoft provides the supportive foundation and extensive capabilities that enable OEMs and help them deliver differentiated, finished solutions."
Microsoft is not building its own connected car. Rather, the Redmond giant wants to focus on what it does best - software development and cloud computing services - and offer its Connected Vehicle Platform to car makers, for which Microsoft wants to be "a partner that not only offers the right tools, but also allows them to keep their data, has a secure and compliant cloud platform, and operates at a truly global scale." In fact, the company notes, 85 percent of Fortune 500 companies already rely on Microsoft’s cloud for these reasons.
Of course, Microsoft’s cloud will handle sensor and usage data from connected vehicles, and help car manufacturers apply that data. In fact, the push to the automotive sector can be seen as one more move aimed at attracting key emerging industries to Microsoft cloud computing. The Wall Street Journal recently noted that Microsoft has seemingly reinvented itself and its bet on cloud computing is paying off, as shown by recently released results that boosted Microsoft's stock. The company's revenue from its Azure business services unit doubled, driving overall profit up, to $4.69 billion, on revenue of $20.45 billion.
Many of Microsoft’s services for connected cars will be made available in a public preview later this year, including virtual assistants, business applications, office services and productivity tools like Cortana, Dynamics, Office 365, Power BI and Skype for Business. Microsoft recently announced partnerships with Volvo and BMW as well, which include many of these services.
Microsoft notes that the investment it's making in the automotive space extends to countless other industries, such as financial services, manufacturing and smart cities. "Wherever there’s a 'connected signal,' Microsoft wants to be the partner that can help its customers improve people’s lives — on the road, in the cloud and everywhere in between," boldly states the company.
In fact, it seems likely that, besides connected and autonomous cars, the technologies showcased in the Connected Vehicle Platform could find important applications widespread across a range of key industries, which is good news for the Redmond giant and should encourage new investors to bet on Microsoft stock.
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