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7 June 2019

Trio of deals shows automotive software market heating up

While the automakers have backed off their claims of the self-driving future being imminent, and the OEMs that supply them try to navigate an always-shifting market, one sector of the connected car supply chain that seems to have taken less of a hit in this expectation-shift is the software and services. To this end, there was a flurry of recent announcements that illustrate this trend, from NXP, Momenta, Teraki, Microsoft, Wind River, and Airbiquity, unveiled at the TU Automotive Detroit show.

As we get closer to the age when every car sold has an integrated cellular connection, the market for all manner of supporting software and surfaces increases. Whether these are monitoring and predictive maintenance functions, fleet management and telematics services, or simply entertainment and commerce suites, the opportunity for any software slinger is growing.

However, cars are a completely different operating environment than a cloud computing platform. The combination of different components and vendors is staggering, which makes designing a one-size-fits-all service effectively impossible. The software that is being built for these cars has to be extremely flexible – able to accommodate the quirks of any RFP or bid. You could think of cars as mobile server racks or embedded PCs, but to do so, you’d have to massively expand the number of configurations that you need to design for.

But this does mean that the industry isn’t going to be dominated by a handful of very large players, at least not for a decade or two. The bespoke nature of many of these deals leaves the door open for smaller players to start racking up wins, as the automakers take the early steps in adopting the functions needed to enable connected and automated vehicles at scale.

One of the most important systems that these vehicles are going to require is the ability for the automaker to update their computer systems remotely. Known by the term OTA (over-the-air), the first of the three deals that caught our eye was between Wind River and Airbiquity, where the pair promised to develop an end-to-end software lifecycle management solution for connected and autonomous vehicles.

Specifically, Wind River is providing its Edge Sync product, a modular OTA update and software lifecycle management tool, with Airbiquity contributing OTAmatic, which handles OTA orchestration, campaign management, a data management tools – which is compliant with the Uptane open source standards project that has been adopted by the Automotive Grade Linux (AGL) initiative. The Uptane Alliance was launched in July 2018, to formally standardize this.

So then, the combined offering aims to package software updates to be as small as possible, reducing both networking costs and the on-device storage and processing requirements needed to handle them. The back-end functions should allow for a coordinated update process, which of course, for the duration of a car – something that the pair will be able to earn ongoing revenues from.

“Carmakers are facing pressure to introduce highly complex features and constantly provide more value. Advancing software management to securely address the entire lifecycle of a car will be an effective strategy to help carmakers deliver more and ongoing innovation while staying cost-effective,” said Marques McCammon, VP Automotive at Wind River. “By teaming up with leaders like Airbiquity, we can help carmakers meet evolving customer and business needs.”

Wind River is now no longer part of Intel, after it was sold off to TPG Capital for an undisclosed sum in April 2018. Bought for $884mn by Intel in 2008, we speculated that the firm was sold for much less than this figure. What struck us as odd at the time was the potential upscale of the market for Wind River’s RTOS and software offerings, especially when combined with Intel’s shiny new Mobileye assets. It seemed strange that Intel would want to offload Wind River given that it could probably have created a nice joined-up offering, but Wind River is now free to pursue deals such as this, as well as ones in the wider-IoT – a market that Intel has been pretty woeful in.

The second announcement that caught our eye came from Teraki, a German startup that has made its Intelligent Edge Processing suite available to all cars using Microsoft’s new Connected Vehicle Platform (CVP). Microsoft recently announced that the Renault-Nissan Alliance would be using the CVP, although there is some ongoing upheaval at the alliance in the wake of the Carolos Ghosn fiasco. In this realm, Microsoft also has its Open Manufacturing Platform with BMW, which we have been somewhat critical of.

Teraki meanwhile, crossed our radar back in 2016, when we bumped into the startup in Berlin. It was showing off a software system that could achieve a 95% reduction in data output from IoT sensors, which it had developed inside the Deutsche Telekom hub:raum incubator. Airbus was a customer at the time, but the SDK and API had obvious merits in any bandwidth-constrained application – due to power or expense restrictions.

The new announcement opens up Teraki to a pretty big marketplace, where anyone inside the Microsoft ecosystem can now look to use Teraki’s stack inside their applications. The company is pitching this capability at insurance, predictive maintenance, and autonomous driving use cases, where the AI-based system for analyzing, capturing, and encoding data can be used to optimize the flow of packets through the network.

With no additional hardware required, Teraki does make some pretty big claims. It says that compared to alternative approaches, the CPU can process 5x more data, with the application enjoying 15x less end-to-end latency, and a 50x reduction in mobile data consumption. As with all benchmarks, your mileage is going to vary considerably, but systems like this, which are essentially compression and filtration systems fueled by machine-learning algorithms, have all manner of applications in the IoT.

The final bit of news that grabbed our attention this week came from NXP, which announced a partnership with Momenta to combine its automotive semiconductors with Momenta’s software expertise, to create new Driver Monitoring Solutions (DMS).

Qualcomm had fancied NXP for its vast automotive foothold, but now that the acquisition is well and truly in the dust, NXP seems to be refocusing on cars as its core focus – although it did splash $1.76bn on Marvell’s WiFi and Bluetooth assets last week, which includes Broadcom’s old WICED portfolio.

NXP and Momenta are pitching the DMS offering at mass production vehicles, ahead of the Euro NCAP requirement for them in 2020 vehicles and onwards. DMS technologies monitor the driver’s attentiveness, and ultimately let the vehicle take safety precautions if it spots that the driver is playing with their phone or falling asleep at the wheel. The system is going to be using NXP’s Open Vision Platform (the S32V2 silicon), combined with Momenta’s deep learning algorithms.

“The integrated automotive-grade hardware accelerators in the NXP S32V2 are ideal for deep neural network processing because they can reduce CPU usage and save computing resources. This can offer more performance for other vision processing tasks within the vehicle and reduce costs for our customers,” said Kamal Khouri, vice president and general manager of Advanced Driver Assistance Solutions at NXP. “The combination of Momenta’s deep learning software and our S32V2 platform is a compelling solution for DMS applications aimed at increasing road safety for society.”