News

Microsoft Partners with Toyota on Cloud Telematics Initiative

• By Kurt Mackie
• 04/06/2011

Microsoft has entered into a partnership with Toyota Motor Co. that would link Microsoft's Windows Azure cloud computing platform with car telematics technologies.

The project will involve Microsoft and Toyota Media Service Co., a Toyota subsidiary. According to an announcement from both companies, the project's initial goal is to produce hybrid and electric cars by 2012 that will let users of telematics technology save on energy costs, both in the car and remotely at home. The long-term goal is for Toyota Media Service to develop a cloud platform by 2015 for the delivery of services worldwide.

Together, Microsoft and Toyota plan to invest about $12 million, or 1 billion yen, into the project.

The deal was announced on Wednesday by Akio Toyoda, president of the Toyota Motor Corp., and Microsoft CEO Steve Ballmer in a press conference. Both noted the backdrop of destruction in Japan from the recent earthquakes and tsunamis, but Toyoda said that it was important to make the announcement nonetheless to instill hope and provide a steady economic picture for the future.

Toyota and Microsoft have partnered on various technologies for more than 10 years. However, on the telematics side, Toyoda pointed to Toyota's efforts with a venture-cap Internet service start-up called Gazoo, which began in 1998 and which he directed. He said that Microsoft "leant me a helping hand when I was struggling." For this current telematics deal, he called on Ballmer in January of this year to work out the details.

The telematics concept was defined by the companies as the use of telecom and IT technologies in vehicles, including the use of the Global Positioning System (GPS) satellite network for location tracking-type services and the use of wireless communications for safety applications. The initial goal is to provide power-savings tools for Toyota drivers, such as tracking the best time of day to charge the car, avoiding peak hours and higher electricity costs. The telematics might also be used to turn on air conditioning automatically or control energy systems at home remotely. The system is expected to be controllable via smartphones.

Other scenarios may be considered too, such as coordination with Toyota's entune service, which allows mobile applications to be transferred to the car. Toyoda said in a Q&A session that the deal with Microsoft may lead to the strengthening of Toyota's entune platform.

The availability of the telematics service in 2012 will start in markets where electric and hybrid vehicles are most used, which means the United States and Japan, according to Toyoda. However, the Azure platform will support 170 counties where Toyota cars are sold, and enable scalability of the telematics service. Toyota will pay for only the services they consume, Ballmer explained.

No details about pricing for the service were announced, but Toyoda did say that customers likely would shoulder some of the costs. Toyota Media Service is currently conducting trials of the service as part of its Toyota Smart Center program.

Ballmer said that this telematics solution is an example of consumers using a combination of sensor data with remote control, which is becoming a general phenomenon for Microsoft's technologies. He said that the cloud is enabling greater speeds, as well as "a new kind of application."

The press conference was moderated by Thilo Koslowski, a vice president and distinguished analyst at Gartner. He predicted that most consumers "will demand Web-centric connectivity in their cars" by 2016. A recording of the press event can be accessed here, and a transcript is available here.