On October 7, 2022, SBD Automotive held the conference Software-Defined Vehicle - Motivation and Transformation in Tokyo, Japan.
At this conference, in addition to SBD Automotive's Jeffrey Hannah and Masahiro Otsuka, we welcomed guest speakers from Amazon Web Services and Red Hat. Lectures were given on the hierarchical structure, the technology that enables SDV, and monetization strategies for SDV.
The Software-Defined Vehicle does not just require organizations to add software development capabilities, it is necessary to transform the entire OEM business and organization.
Many OEMs are rapidly promoting organizational and business changes as they transform towards creating SDVs, but they are not necessarily successful, and using OSS (Open Source Software) and IT industry services are an effective solution for many OEMs.
1. Introduction: The importance of Software-Defined Vehicles Jeffrey Hannah - CCO, SBD Automotive
The Software-Defined Vehicle is a concept in which the functions of a vehicle are defined by software, not hardware. Benefits include a reduction in the number of parts due to progress in hardware integration, handling of recalls and warranties through software updates enabled by the evolution of software functions, and the ability to always deliver a fresh experience to customers by updating the vehicle. Industry leaders such as Volkswagen have announced a strategy called SSP, which differentiates experiences between segments and brands with software-defined features on top of a simplified hardware platform.
SBD Automotive's strategy for SDV has various stages, starting with building a hardware platform, strengthening development capabilities, acquiring human resources, agile organizational structure, rapid updates in response to changing customer demands, and rich experiences. OEMs need to transform their entire business. There are three major approaches to this (outsource integration type, long-term incremental type, short-term rapid change type), but it is difficult to enjoy all the benefits of any strategy, and OEMs must choose priorities and compromises.
2. Realization of SDV software strategy
Hidehiko Wakabayashi - Principal EcoSystem development Manager, and Yoji Inoue - Cloud Solution Specialist, Red Hat
A Red Hat (RH) presentation pointed out the importance of OSS as software complexity grows exponentially. OSS is one of the factors that continue to innovate in the IT industry. As the leader in enterprise Linux, RH has led and supported innovation in the IT industry.
The recently developed RHIVOS (Red Hat In-vehicle OS) brings the openness and development community of Linux, as well as the cloud-native concept of RH, to in-vehicle software. However, the current Linux is not meant to replace RTOS, and it is important in software architecture design to use the right solution in the right place.
3. Monetization of SDV: Personalization, Insight, Data, OTA, FaaS Masahiro Otsuka - Consulting Specialist, SBD Automotive Japan
SDV needs to develop a monetization strategy that suits customers in the automotive industry and the automotive business. SBD Automotive believes that data utilization, OTA, FaaS, and personalization are the major pillars of SDV's monetization strategy. These elements are very important items in the IT industry and business models such as GAFA, but and SDV monetization strategy needs to be designed from a different perspective than those profit structures. For example, we can hardly expect to generate significant revenue directly from the data generated by a car, and we know that many consumers do not want various functions of a car to be provided by FaaS.
As an OEM, it will be important to divide most of the four services and functions into investment for improving customer loyalty, improving internal operational efficiency, and developing innovation. The KPI of SDV monetization should not only be direct profit, but also the contribution to the business model and its success should be judged comprehensively considering all the factors just mentioned.
4. Leveraging the Cloud for SDV Tooling and Simulation John Vangelov - Principal Consultant, Amazon Web Services, Inc.
AWS is a pioneer in cloud services and supports many OEMs, suppliers and service providers for cloud in the automotive industry. It recently launched AWS IoT Fleetwise, the first automotive industry-specific service that helps OEMs solve a variety of cloud-vehicle integration challenges. In addition, AWS has a full-stack portfolio of cloud services for the automotive industry. vECU can emulate any ECU architecture on the cloud, which can significantly speed up ECU development. Such full-stack development support is of great value to OEMs who are about to transform themselves into SDV organizations.
5. Panel discussion Amazon Web Services, Red Hat, SBD Automotive
Q. Today, the automotive industry is diverse, from software-first disruptors like Tesla, NIO, and XPeng, to traditional OEMs that still outsource a lot of their software. What is the current value of the automotive industry from the perspective of IT native companies such as RH and AWS?
A. We feel that many Western and Chinese OEMs are actively transforming their organizations to adopt software-first, cloud-native development. However, we have the impression that Japanese OEMs are more conservative with respect to change, and feel that the background to this is that there are very few people who can think of cloud-native development, not to mention software developers. This is partly due to the industrial structure of Japan's IT industry, but we also have a sense of crisis that without human resources, new ideas will not spread.
Huge OEMs are trying to do much of their software development themselves, which seems like a great strategy. However, there is also a world that can be seen by using the services of IT specialists such as RH and AWS.