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Microsoft is partnering with Toyota in bid to rule connected cars

Microsoft seems to have been burning the midnight oil in the automotive sector lately.

Back in January, Volvo announced the integration of Skype for Business into its 90 Series cars, as well as a proposition to include Microsoft's Cortana in its upcoming vehicles. The quest for Microsoft services integrated into smart cars does not stop there, with Nissan also in talks about a project involving Cortana, and Microsoft's recent collaboration with BMW.

Microsoft held a press conference this week to announce a deal that will see Microsoft license its patents for Internet-connected cars over to Toyota.

The deal will enable Toyota to use a handful of Microsoft's patents such as Wi-Fi, voice recognition software, motion sensors, operating systems, and tools to store and transfer files. Granting access to this trove of services should allow Microsoft to splash in the same pool that other companies such as Google and Intel have been comfortably swimming in for quite some time now.

According to Erich Anderson, Corporate Vice President at Microsoft's Intellectual Property Group, the company appears very hopeful with this strategic move:

We don’t make cars, but we have a long history of working with our partners in the automotive industry to deliver great products and services that power the automotive sector. For example, our Azure service is the leading cloud platform for the auto industry.

Who can blame them? Microsoft sees an opportunity to be snatched amid huge growth in demand for connected car services.

According to Gartner Research, new vehicles equipped with data connectivity will rise from 12.4 million per year in 2016 to 61 million per year in 2020. While technically these are just predictions, Gartner also believes the total cumulative shipments of smart cars equipped with data connectivity will be 250 million by 2020.

Connected Car Production by Connectivity Mode, Worldwide (Thousands)

2015 2016 2017 2018 2019 2020
Embedded 2,174 4,914 11,097 21,394 33,928 42,949
Tethered 4,681 7,519 9,971 12,374 14,995 17,994
Total 6,855 12,433 21,068 33,768 48,923 60,943

Microsoft's pending licensing deal follows a prior tie-up with Toyota in April of last year to create a data analytics company with the means to bring new Internet-connected services to automobiles without overwhelming the driver. Dubbed Toyota Connected, it was one of the first to adopt Microsoft's Azure-powered service.

Source: Microsoft Blogs

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