Body of a car, brains of a PC
Car buyers usually compare things like horsepower, mileage and warranties. But increasingly, the most important parts of a new car are also the least visible: software.
The self-parking Lexus LS 460 has already shown that sensors, cameras and software can get a car to parallel-park itself. Automakers are now gearing up to include more automated driving features for even the most budget models. And further down the road, the computerized car will become part of an even larger network of highway communication.
As car systems get more complex, automakers are looking to the tech industry for help in translating their designs into working software and hardware, according to both carmakers and analysts.
That's why technology specialists like IBM--with decades of software experience--are investing in the automotive industry and the companies that serve it. The potential payoff could be grabbing the driver's seat in a market worth billions of dollars.
"All the features you see--adaptive cruise control, autopark, lane departure warning--those are all driven by software," said Patrick Milligan, senior manager for in-vehicle software development at Ford Motor.
"Complex-software development is now increasingly critical to (automotive companies') success in innovation and competitive advantage," according to a June report by research firm Illuminata on IBM's plan to acquire Telelogic.
Automakers spent 35 percent of their IT budget on software and 12 percent on third-party services in 2006, according to an October 2006 AMR Research survey of senior automotive IT managers from 52 automotive companies with a presence in the United States.
Today's average vehicle contains an estimated 1,450 euros ($1,997) worth of software code, about 9 percent of the showroom price. That percentage is expected to increase to 15 percent in the coming years, according to a 2006 report from Strategy Analytics.
For those reasons and more, IBM sees automotive computing as its next frontier, said David Petrucci, automotive solutions leader of IBM Software Group.
"We are trying to change our relationship with the automotive industry and working to become a more direct participant...both with car companies and components manufacturers," Petrucci said.
And IBM, which in the past may have been slow to enter new markets, isn't wasting any time when it comes to the auto business. In 2003, Big Blue launched data retrieval software based on XML that can be used by cars to communicate with the road and other cars around them. In 2005, it signed a $125 million deal with the United Arab Emirates to develop a vehicle telematics infrustructure that uses that technology. Last year, the company signed a partnership with Magna Electronic to design software for the company's smart-car parts.
The company's biggest move came in June, when it announced a $745 million deal to acquire automotive technology powerhouse Telelogic, a Sweden-based company that makes software development and management tools.
One of the hottest areas in automotive technology is the development of a standard "car operating system." Just as computer operating systems, such as Microsoft's Windows Vista, allow multiple applications to communicate with one another, an automotive operating system enables different driving systems--from fuel injection to brakes to power steering to power windows--to work together.
A standard operating system that pervades multiple car brands would make it easier for developers, component manufacturers and automakers to incorporate more-sophisticated driving systems, like self-parking, into multiple car models.
IBM is deeply involved in this area, as are automakers. A group of Japanese companies, including Honda Motor, Toyota Motor, Nissan and Toshiba, is reportedly planning to forge a car operating-system standard.
IBM, with its Telelogic buy, could also play a pivotal role in setting standards of future car operating systems. General Motors is a Telelogic customer, as are DaimlerChrysler, General Motors, BMW, Volvo and Volkswagen, according to Neeraj Chandra, executive vice president of corporate and product strategy at Telelogic. The company also counts Siemens VDO Automotive, Robert Bosch and Delphi, leading automotive suppliers, as clients.
About 7 percent of Telelogic's revenue--roughly $14.5 million of its estimated $208 million for 2006--came from the automotive industry. But its sales to the automotive industry in 2006 grew 32 percent, according to the company's annual report, more than to aerospace and defense operations combined.
"IBM has seen that there's an opportunity to help software developers in OEMs (original equipment manufacturers) and tier 1s to use common tools to develop software and be more disciplined and structured," said David Alexander, principal analyst for automotive systems at ABI Research. "There is where IBM is thinking they have something to offer."
Automakers seem to agree, at least if GM and Ford are any indication.
"We definitely see that as one of the next frontiers for us as well," said Hans-Georg Frischkorn, executive director of global electrical systems, controls and software at GM. "In fuel economy or safety or telematics, software plays a major role."
Ford, too, sees software as crucial to new car development.
"It's easily one of the leading technological challenges faced in the auto industry because of the breadth of the systems. It is pretty much like a network on wheels these days," Ford's Milligan said.
Both automakers are struggling to compete for market share against successful Asian competitors like Toyota, which has seen record sales in the States and recently surpassed GM as the world's largest automaker, in terms of global sales.
In fact, American automakers may already be falling behind. Japanese carmakers like Toyota and Honda are already ahead of U.S. automakers in terms of the complex driving systems they offer Japanese drivers, according to ABI's Alexander.
"Honda has a more complex vision system than other carmakers that includes identifying pedestrians and other objects, as well as their movement and trajectory....Toyota has had a self-parking Prius for Japanese drivers since 2003," Alexander said.
"They're pushing ahead with new ideas in technology, and maybe the operating systems being developed outside of Japan may not be reacting fast enough. This is my interpretation of why they might decide to announce they are going it alone," Alexander said of the Japanese government's interest in developing its own automotive standards.
Time budgeted for the development of inventions is also decreasing.
"The product development cycle itself is compressing. It used to be five years. Now it's 24 months, and they are trying to get it down to one year. So you have shrinking development time and more complex-software development," Chandra said.
Developing software for particularly innovative new components is part of what a car company now does. But executives at GM and Ford said their companies look to outside help when it comes to developing the tools for writing that innovative software and managing requirements for component manufacturers.
"We're definitely building resources in-house as quickly as we can. While we do that, we are working with third parties, top names in the software industry," GM's Frischkorn said.
"Honestly, we consider it to be the leading tech challenge the industry is facing. The millions of lines of code that go with it are far exceeding the complexity of any industry out there," Ford's Milligan said.
"Different applications require different levels of robustness and quality control. That's an area IBM has some expertise in," ABI's Alexander said. "Especially as the auto industry opens up, and you get more tier 1 suppliers involved in making software for the whole (market)."
Telelogic offers software that lets developers define very complex systems and simulate them. The program can analyze an individual driving system, such as one controlling a car's brakes, or the entire car. Telelogic's tools can also help find where software can be reused instead of written from scratch for every new component or car model.
"This not only costs money, but the more different products you develop for the same purpose, the (higher the) chance of something going wrong," Telelogic's Chandra said. "A lot of them are trying to standardize on a single architecture."
Traffic jam ahead
Of course, Telelogic is not the only player in town, and IBM is not the only behemoth interested.
Ford uses products from The MathWorks, which makes software for modeling and simulating complex dynamic systems and data, to translate its requirements into mathematical models that can be more easily managed. It's also evaluating Teamcenter, a systems engineering tool made by the software company UGS. UGS was acquired by manufacturing tools giant Siemens A&D for $3.5 billion in May.
Other tech giants, namely Microsoft, are becoming more involved in the auto industry. The software giant has so far concentrated on in-car entertainment and navigation systems, but it likely has larger ambitions.
IBM, too, is driving toward larger goals, according to ABI's Alexander.
Several governments and companies have been developing systems to allow cars to communicate with each other and the roadway about traffic and road conditions. A simple form of vehicle telematics is already used for collecting road tolls and tracking commercial trucks.
A comprehensive telematics infrastructure in the U.S. could allow all cars, regardless of manufacturer, to communicate where they are in a lane, and warn others when they've hit a patch of ice and where they've gotten into an accident.
Automotive telematics is currently estimated to be a $9 billion industry and is expected to grow to about $40 billion during the next 10 years," according to a December 2006 report from the Center for Automotive Research.
Software will provide the means to avoid traffic and accidents, once a Dedicated Short-Range Communications wireless protocol for cars and roadways is implemented, according to Alexander.
"What you need at the back end of all this is the infrastructure that has to be linked together," he said. "That's an area that IBM may have its eyes on. It's a multibillion-dollar project to equip all of the major cities in America with this stuff."
Source: news.com
The self-parking Lexus LS 460 has already shown that sensors, cameras and software can get a car to parallel-park itself. Automakers are now gearing up to include more automated driving features for even the most budget models. And further down the road, the computerized car will become part of an even larger network of highway communication.
As car systems get more complex, automakers are looking to the tech industry for help in translating their designs into working software and hardware, according to both carmakers and analysts.
That's why technology specialists like IBM--with decades of software experience--are investing in the automotive industry and the companies that serve it. The potential payoff could be grabbing the driver's seat in a market worth billions of dollars.
"All the features you see--adaptive cruise control, autopark, lane departure warning--those are all driven by software," said Patrick Milligan, senior manager for in-vehicle software development at Ford Motor.
"Complex-software development is now increasingly critical to (automotive companies') success in innovation and competitive advantage," according to a June report by research firm Illuminata on IBM's plan to acquire Telelogic.
Automakers spent 35 percent of their IT budget on software and 12 percent on third-party services in 2006, according to an October 2006 AMR Research survey of senior automotive IT managers from 52 automotive companies with a presence in the United States.
Today's average vehicle contains an estimated 1,450 euros ($1,997) worth of software code, about 9 percent of the showroom price. That percentage is expected to increase to 15 percent in the coming years, according to a 2006 report from Strategy Analytics.
For those reasons and more, IBM sees automotive computing as its next frontier, said David Petrucci, automotive solutions leader of IBM Software Group.
"We are trying to change our relationship with the automotive industry and working to become a more direct participant...both with car companies and components manufacturers," Petrucci said.
And IBM, which in the past may have been slow to enter new markets, isn't wasting any time when it comes to the auto business. In 2003, Big Blue launched data retrieval software based on XML that can be used by cars to communicate with the road and other cars around them. In 2005, it signed a $125 million deal with the United Arab Emirates to develop a vehicle telematics infrustructure that uses that technology. Last year, the company signed a partnership with Magna Electronic to design software for the company's smart-car parts.
The company's biggest move came in June, when it announced a $745 million deal to acquire automotive technology powerhouse Telelogic, a Sweden-based company that makes software development and management tools.
One of the hottest areas in automotive technology is the development of a standard "car operating system." Just as computer operating systems, such as Microsoft's Windows Vista, allow multiple applications to communicate with one another, an automotive operating system enables different driving systems--from fuel injection to brakes to power steering to power windows--to work together.
A standard operating system that pervades multiple car brands would make it easier for developers, component manufacturers and automakers to incorporate more-sophisticated driving systems, like self-parking, into multiple car models.
IBM is deeply involved in this area, as are automakers. A group of Japanese companies, including Honda Motor, Toyota Motor, Nissan and Toshiba, is reportedly planning to forge a car operating-system standard.
IBM, with its Telelogic buy, could also play a pivotal role in setting standards of future car operating systems. General Motors is a Telelogic customer, as are DaimlerChrysler, General Motors, BMW, Volvo and Volkswagen, according to Neeraj Chandra, executive vice president of corporate and product strategy at Telelogic. The company also counts Siemens VDO Automotive, Robert Bosch and Delphi, leading automotive suppliers, as clients.
About 7 percent of Telelogic's revenue--roughly $14.5 million of its estimated $208 million for 2006--came from the automotive industry. But its sales to the automotive industry in 2006 grew 32 percent, according to the company's annual report, more than to aerospace and defense operations combined.
"IBM has seen that there's an opportunity to help software developers in OEMs (original equipment manufacturers) and tier 1s to use common tools to develop software and be more disciplined and structured," said David Alexander, principal analyst for automotive systems at ABI Research. "There is where IBM is thinking they have something to offer."
Automakers seem to agree, at least if GM and Ford are any indication.
"We definitely see that as one of the next frontiers for us as well," said Hans-Georg Frischkorn, executive director of global electrical systems, controls and software at GM. "In fuel economy or safety or telematics, software plays a major role."
Ford, too, sees software as crucial to new car development.
"It's easily one of the leading technological challenges faced in the auto industry because of the breadth of the systems. It is pretty much like a network on wheels these days," Ford's Milligan said.
Both automakers are struggling to compete for market share against successful Asian competitors like Toyota, which has seen record sales in the States and recently surpassed GM as the world's largest automaker, in terms of global sales.
In fact, American automakers may already be falling behind. Japanese carmakers like Toyota and Honda are already ahead of U.S. automakers in terms of the complex driving systems they offer Japanese drivers, according to ABI's Alexander.
"Honda has a more complex vision system than other carmakers that includes identifying pedestrians and other objects, as well as their movement and trajectory....Toyota has had a self-parking Prius for Japanese drivers since 2003," Alexander said.
"They're pushing ahead with new ideas in technology, and maybe the operating systems being developed outside of Japan may not be reacting fast enough. This is my interpretation of why they might decide to announce they are going it alone," Alexander said of the Japanese government's interest in developing its own automotive standards.
Time budgeted for the development of inventions is also decreasing.
"The product development cycle itself is compressing. It used to be five years. Now it's 24 months, and they are trying to get it down to one year. So you have shrinking development time and more complex-software development," Chandra said.
Developing software for particularly innovative new components is part of what a car company now does. But executives at GM and Ford said their companies look to outside help when it comes to developing the tools for writing that innovative software and managing requirements for component manufacturers.
"We're definitely building resources in-house as quickly as we can. While we do that, we are working with third parties, top names in the software industry," GM's Frischkorn said.
"Honestly, we consider it to be the leading tech challenge the industry is facing. The millions of lines of code that go with it are far exceeding the complexity of any industry out there," Ford's Milligan said.
"Different applications require different levels of robustness and quality control. That's an area IBM has some expertise in," ABI's Alexander said. "Especially as the auto industry opens up, and you get more tier 1 suppliers involved in making software for the whole (market)."
Telelogic offers software that lets developers define very complex systems and simulate them. The program can analyze an individual driving system, such as one controlling a car's brakes, or the entire car. Telelogic's tools can also help find where software can be reused instead of written from scratch for every new component or car model.
"This not only costs money, but the more different products you develop for the same purpose, the (higher the) chance of something going wrong," Telelogic's Chandra said. "A lot of them are trying to standardize on a single architecture."
Traffic jam ahead
Of course, Telelogic is not the only player in town, and IBM is not the only behemoth interested.
Ford uses products from The MathWorks, which makes software for modeling and simulating complex dynamic systems and data, to translate its requirements into mathematical models that can be more easily managed. It's also evaluating Teamcenter, a systems engineering tool made by the software company UGS. UGS was acquired by manufacturing tools giant Siemens A&D for $3.5 billion in May.
Other tech giants, namely Microsoft, are becoming more involved in the auto industry. The software giant has so far concentrated on in-car entertainment and navigation systems, but it likely has larger ambitions.
IBM, too, is driving toward larger goals, according to ABI's Alexander.
Several governments and companies have been developing systems to allow cars to communicate with each other and the roadway about traffic and road conditions. A simple form of vehicle telematics is already used for collecting road tolls and tracking commercial trucks.
A comprehensive telematics infrastructure in the U.S. could allow all cars, regardless of manufacturer, to communicate where they are in a lane, and warn others when they've hit a patch of ice and where they've gotten into an accident.
Automotive telematics is currently estimated to be a $9 billion industry and is expected to grow to about $40 billion during the next 10 years," according to a December 2006 report from the Center for Automotive Research.
Software will provide the means to avoid traffic and accidents, once a Dedicated Short-Range Communications wireless protocol for cars and roadways is implemented, according to Alexander.
"What you need at the back end of all this is the infrastructure that has to be linked together," he said. "That's an area that IBM may have its eyes on. It's a multibillion-dollar project to equip all of the major cities in America with this stuff."
Source: news.com
posted by y o g e s h @ Wednesday, August 15, 2007
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