It has been enlightening to watch the automotive and mobility industry advance in the past few years. The pandemic exposed a lot in many industries, speeding up transformation in many areas, but what trends are really taking hold? Is it electrification, customer experience, ADAS (advanced driver assistance systems), SDV (software-defined vehicle), sustainability, security, or something else entirely?
I recently had an opportunity to sit down with Raj Paul, senior director, Americas mobility, Microsoft, on The Peggy Smedley Show to talk about how recent announcements will ultimately impact automotive going forward. Let’s unpack a few of each of the areas we addressed.
The Rise of AI
Perhaps one of the biggest trends that has impacted nearly every vertical market in the past 12 months has been the rise of AI (artificial intelligence)—or more specifically the rise of gen AI and ChatGPT because AI itself has been around for quite a while.
Paul says we have had AI for a long time, but now we have specialized compute from an AI standpoint and the storage that is now available. When you look at gen AI now with OpenAI and the GPT models, it is a perfect time when everything has come together to make this possible for customers and partners to start leveraging the capability, he explains.
“The beauty here is our underlying platform, Azure platform, Azure Microsoft cloud, is being an enabler so customers and partners can leverage all the large language models, which we make available in Azure,” he says. “The developer tools that we make are available so that they can actually get going really fast.”
The company has made many announcements about how gen AI is showing up in its products now. For instance, all products that companies are used to within the productivity suite have a copilot that will make businesses more productive. And Paul likes to emphasis that it is a copilot—not an autopilot.
AI can help in many ways such as with the customer experience, the supply chain, and to help optimize the cost structure, as just a few examples.
The customer experience is one area that will capitalize on AI very fast. Quite simply, the customer experience is changing across nearly every industry—and it certainly is in automotive and mobility. Paul points to several examples in our discussion on The Peggy Smedley Show such as call centers and inside the car as well.
There are a lot of ways OEMs (original-equipment manufacturers) can monetize from a data standpoint, and as consumers begin to see value in these new services, they will be more likely to pay for such services.
“The moment I see value, I think I would be willing to pay for it, but if I don’t see value, I will question why am I paying for this? This should be a free part of the car,” he says. “So, I think as services evolve, and as consumers see value in the services, I think the monetization play will become a reality.”
As we talk about customer experience, a big component here will be securing all of this to ensure we are all behind the wheel a connected vehicle we can trust. As Paul tells me, “The underlying premise on this whole thing is a safe, connected car.” In order to deliver on this, Microsoft looks at this as end-to-end security.
In this case, there is a multi-prong approach to sustainability for OEMs and for Microsoft itself. For example, many auto companies are electrifying their vehicles and Microsoft’s platform plays a big role in enabling this. “There is a real intent here toward a greener planet and that electrification of course plays a very big role,” says Paul.
Microsoft has also announced an offering called Microsoft Cloud for Sustainability to record, analyze, and report how companies are doing with their sustainability goals. These tools can help companies move toward their ultimate sustainability goals.
At the same time, Microsoft itself wants to be more sustainable too. The company aims to buy back all of the carbon it has generated since it started the company. The world is changing fast, and Microsoft is demonstrating it working to change with it as fast as possible.
As Paul says to me, “You can’t ask for a better time to be in automotive.” He also told me on The Peggy Smedley Show that every OEM is looking to build that software-defined vehicle and that ADAS is becoming more prevalent as well. These are two other big trends to watch.
His advice to anyone in the year ahead is to define the unique customer experiences and to streamline manufacturing, which includes the supply chain, because resiliency is a requirement to operate a business today.
“I think have a people-centric, culture-centric view into that transformation I think will help any business with transforming, which means you make more productive employees,” he says.
At the end of the day, it is all about the people and the culture—and Microsoft’s tools will be along for the ride to be that copilot.
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