All Rights Reserved. As the capabilities of software development services continue to grow, we’re likely to see even more innovations on the horizon. Such acquisitions could give a tech company the ability to infuse its technology through a player already well established in the automotive value chain. Each company occasionally added proprietary mapping features, such as improved user interfaces, to its own cars to provide a competitive advantage. The complexity jump is also creating a host of new, difficult-to-trace security risks for connected vehicles. Forbes predicts that by 2025–26, vehicle subscription services might be responsible for 10 percent of all new vehicle sales across the United States and Europe. For internal-combustion engines, software has enabled recent innovations, such as rapid stop–start technology to minimize idling and variable valve timing to improve efficiency. A leading EV OEM has embarked on this path, designing its electronic systems to share a common software foundation. The industry has many technical and commercial dynamics, but early signs point to the following possible routes. Read on to find out how companies take advantage of IT software solutions for the automotive industry, what to expect from a development team in this field, and what successful implementations look like. Unleash their potential. Nearly all the systems can seamlessly communicate with each other and receive updates over the air. And in order to remain competitive in the industry, companies will need to employ developers who can help them stay ahead of the curve, whether that means the outsourcing of software development to onshore or offshore providers or training in-house personnel. With talent in short supply, they cannot merely toss more resources at the problem. With the automotive revolution that the above trends outline, it's inevitable that new, non-traditional players will enter the market. Integrate complex value streams and an ecosystem of stakeholders in the development of automotive … The overall development challenge is becoming very real. Please click "Accept" to help us improve its usefulness with additional cookies. Over the next five to seven years, consolidation of today’s complex vehicle architecture into even two or three leading platforms could represent a viable first step. They use these data to improve their automobiles, making them safer and more comfortable for drivers. Imagine a world in which software throughout a vehicle was truly integrated end to end. OEMs might have little leeway to ask for changes in the platform, especially if the tech company is providing it for free. Autonomous vehicles of today, like the Google Car, use software and hardware to scan and analyze the terrain in order to improve mapping or other software. Increases in functional requirements of software allows vehicle software architects to consider new types of software workloads. With big data come big opportunities. Please try again later. Despite the clear importance of software to vehicle performance, the development of automotive-software modules frequently occurs in isolation. That is an important benefit, since OEMs fear becoming low-margin hardware players—a fate that has befallen many mobile companies that adopted outside software platforms. Today’s hardware-defined cars are rapidly transforming into software-defined transportation platforms. For example, a car might have a feature limiting speed in a specific area, blocking the driver’s ability to use the vehicle in hazardous conditions, or automatically adapting the temperature and climate to the driver’s preferences. “Today, you’ll find an intense focus on how we stay connected with the world outside when we’re behind the wheel — that is, while we still need steering wheels,” a Wired article entitled “How Connectivity Is Driving the Future of the Car” notes. Learn about “Our vehicles were once our cocoons, insulating us from the world outside, but now we demand vehicles that include a host of new experiences and connectivity features — and we’re all along for the ride.”. Established OEMs are likely to take note of this proof point and could follow a similar model for their next vehicle platforms. A primary operating system, robust and flexible enough to cover major systems throughout the vehicle, and software modules, developed on a common code base, could anchor this integration. A Radical Shift in Consumer Behaviour. Smartphones have undergone a similar shift, with leading players finding ways to improve functionality by more closely integrating code across existing hardware components. Consider the following: These efforts represent a step in the right direction, although they still fall short of the comprehensive integration required to make an end-to-end platform viable. Software development within the auto industry is more than just systems in place to make drivers more comfortable and travels safer. For example, Affectiva’s Automotive AI monitors and alerts users to dangerous behaviors such as closing their eyes while driving. And development productivity could considerably improve, with OEMs adding new cross-domain features over time, without extensive software rewrites, by leveraging a common code base throughout the vehicle. For instance, modern infotainment systems now take upward of three years to develop, with several hundred software engineers contributing to each iteration. Subscribed to {PRACTICE_NAME} email alerts. With the gap between complexity and productivity widening, OEMs and tier-one suppliers will soon face a massive talent shortage and a huge increase in development costs. Market Business News - The latest business news. Security and safety vulnerabilities can be rapidly identified and addressed. In fact, their range might fall by half or more in very cold or warm environments, when drivers are more likely to set air conditioning or heating on high. Tech companies might be stronger in software, but they lack the hardware platform—in other words, vehicles—on which to deploy solutions. AI, personalization, connectivity, improved safety, and increased usage of data are just some of the trends transforming the automotive industry. A major tech player with a cloud-services platform is expanding into applications, bundling a tailored software suite for cars. Quality is also an issue, since even the strongest platforms from tech players might have features that disappoint or annoy customers, such as the presence of advertisements on infotainment systems. Advanced driver-assistance systems (ADAS) improve safety through features that alert drivers to road obstacles and hazardous conditions, sometimes taking over control of the vehicle through features such as adaptive cruise control, pedestrian crash avoidance mitigation (PCAM), and more. Despite the clear importance of software to vehicle performance, the development of automotive-software modules frequently occurs in isolation. Although software has been the critical enabler of today’s infotainment capabilities, new complications are arising. End-to-end software solutions could also lay the groundwork for a substantially enhanced human–machine interface. As autonomous technology advances, a profound shift in consumer behaviour will alter the revenue model and value chain of the industry. Architects … Our flagship business publication has been defining and informing the senior-management agenda since 1964. Software development has become one of the key areas in the automotive industry. Without further ado, below we’re going to list some of the most disruptive trends in automotive software development in 2019. tab. Supporting this trend, OEMs appear to be moving toward an approach in which in-vehicle communications align with an Ethernet standard. We use cookies essential for this site to function well. For instance, they should allow multiple developers to contribute simultaneously and make rapid improvements. AI is a transformative resource for software development providers across numerous industries, and the automotive industry is no different. Strong and diverse tech expertise, including Big Data, ML, Cloud, IoT, embedded software, VR, etc. Cross-domain interfaces could become far simpler, since different systems could directly “talk” to each other without translation dragging down efficiency and introducing delays. A large smartphone-software player with an established position in infotainment is now moving into hypervisors to enable the safety-critical driver communication needed for today’s ADAS. First and foremost, Artificial Intelligence (AI) and Machine Learning (ML) have an essential part in the future of the auto industry as predictive capacities are getting more predominant in autos, customizing the driving adventure. Software development for the automotive industry, How Connectivity Is Driving the Future of the Car, Driver monitoring systems such as sensors and cameras. And in order to remain competitive in the industry, companies will need to employ developers who can help them stay … We are here to provide the right solutions for every company in need. Developers working on different software stacks across a vehicle seldom coordinate their activities, however. The Internet of Things (IoT) facilitates connectivity between automobiles, devices, and special features. Each company has certain software-development strengths—for instance, it might produce a strong ADAS—but no player is a standout expert in all vehicle domains. Most recently, other researchers demonstrated the ability to disable antitheft systems, doors, lights, and brakes through a Wi-Fi connection. Bluetooth, virtual assistants, telematics systems such as GPS, Wi-Fi, and more are all current or future features of vehicles, which are becoming “smarter” every day. Automotive Dealerships and auto shops are streamlining their working with custom automotive management software. Typical OEMs constructing this architecture interact with a multitude of software providers to build various capabilities; in the process, they fill their vehicles with a broad set of development languages, operating systems, and software structures. Automotive software development in recent years has changed vehicle architectures and increased the quality of security and functional safety. As vehicles become increasingly connected, they are producing more and more data — data that could potentially become a huge source of revenue for automotive companies. Software companies and other digital-technology players are leaving their … A typical new-generation vehicle likely has a software architecture composed of five or more domains, together comprising hundreds of functional components in the car and in the cloud. Cox Automotive was the market leader with a 16.7% market share followed by SAP, CDK Global, Reynolds and Reynolds and Microsoft. Overall hardware costs could be optimized, and additional processing capacity could simply be “plugged in” to the architecture to support future applications. Due to personalized automotivesoftware, automotive dealerships and shops are working seamlessly. Strategic software development partner for enterprises and Fortune 500 companies. We may also see a bifurcated approach, with premium OEMs taking an active role in shaping platform features, while volume OEMs rely more on commonality and cost-sharing models. Automotive embedded E/E and software development with codeBeamer ALM . For infotainment, the leading options for upcoming vehicles stem from the smartphone industry, with automotive variants of mobile operating systems becoming common. Internet of Things and Artificial Intelligence . In gas-powered cars, engines generate excess heat and power that climate-control systems can use, but EVs do not have this capability. Fundamental user-experience constructs could easily be shared across vehicle domains, enabling output methods, such as the center screen, instrument cluster, and heads-up display, to have a consistent behavior, look, and feel. The transition from formerly hardware-based products to a software-based, service-driven world is particularly challenging for traditional automotive manufacturers. Connectivity inside a vehicle is also paramount. For OEMs, the issue is capability. We'll email you when new articles are published on this topic. Shifting to a software-centric mind-set could simply mean defining and maintaining the core end-to-end foundation and insisting upon adherence as part of the supplier-relationship construct. Outlook: changes in the value chain Although established players have strong incentives to maximize reuse of current electronics architectures, new entrants can take a ground-up approach to vehicle development while reshaping the construct for supplier engagement. Hackers have proved their ability to access locks, brake systems, and dashboard displays remotely via the cloud connections in several models. We are on the verge of automotive industry revolution, and it all starts with Automotive Software Development. A unified operating system could then allow processing horsepower to be allocated on the fly, dynamically enhancing performance for critical systems when needed. collaboration with select social media and trusted analytics partners Drivers can control their environments through voice-activated navigation systems. Once the full set is available, OEMs or their tier-one suppliers … These connections provide a conduit for attacks to spread through a car, since software vulnerabilities in one system can be exploited to provide access to other systems. These cover everything from infotainment and ADAS to mapping, telematics, and third-party applications (Exhibit 1). For instance, drivers must now deal with clunky, lag-filled interfaces that are slow to respond to their inputs, since infotainment systems must wait to receive information from other components. Many automotive companies leverage the basic code for their software stacks, including those for operating systems and key middleware, from other industries. Please email us at: McKinsey Insights - Get our latest thinking on your iPhone, iPad, or Android device. Most collaborations will probably be small at first, involving only two or three OEMs, but other players might become interested if an alliance creates core components with attractive features. our use of cookies, and While the acquisition of an OEM or leading tier-one supplier could be a radical move in the tech industry, such bold deals are not unprecedented. And two tech companies undertook a similar approach with smartphones over the past decade, acquiring handset players and leveraging their hardware to stimulate market demand for new operating systems and applications. Never miss an insight. Software development providers are also honing features that personalize the driving experience, from remembering frequented routes to adapting to a driver’s comfort, meaning that automobiles will become more responsive to the user’s needs. In doing so, they significantly reduce their development timelines and costs, since creating original code is much more difficult. As interior-design preferences evolve and user interfaces are repurposed for different vehicle models and tiers, the sensory experience could change with minimal development effort. The key driver for the automotive software industry in this region is the rapid development of intelligent transport systems and connected mobility in countries such as China and Japan. It is still not clear, however, where the journey will end, as many developments are still speculative. hereLearn more about cookies, Opens in new Each major player within the automotive space, from OEMs to established tier-one suppliers and tech companies, could potentially create its own end-to-end software platform in isolation. Technology is changing the face of the automotive industry, and with the dramatic shift in the products and features that are available to consumers — and the very way people drive — the need for innovative software development services becomes all the more pressing every day. The automotive sector norm remains delivering defined work packages by a specific deadline. tab, Travel, Logistics & Transport Infrastructure, McKinsey Institute for Black Economic Mobility. More than a mission statement: How the 5Ps embed purpose to deliver value, What’s next for remote work: An analysis of 2,000 tasks, 800 jobs, and nine countries, Mapping the automotive software-and-electronics landscape through 2030. © 2020 - Market Business News. People create and sustain change. To succeed, the participating players must follow strong software-design principles. A subscription service essentially means that customers have the ability to access automobiles via a monthly plan, rather than having full ownership of them. MSC Software is the recognized leader in the Automotive CAE industry, providing best-in-class modeling and optimization tools. Take thermodynamics, for example. It looks like 3D-printed cars may be heading into the mainstream market, and license plate recognition (LPR) software has the potential to improve security and the flow of traffic. There are also disconnects (such as a lack of coordinated information between instrument clusters and center screens on some vehicle models) and an absence of visual consistency for indications and alerts. Tesla, meanwhile, equips all its vehicles with autonomous-driving devices, including cameras, sensors, a radar, and a GPS — which together enable the driver to tell the vehicle where he or she wants to go and let the car take over. Use minimal essential The shift in software perspective, from discrete modules tailored for specific functions to a common architecture capable of effectively hosting code for each major system, has already occurred in other industries. Security could greatly expand, enabling one overarching solution to monitor the full code base—not just at a handful of interfaces. By the year 2023, this value is expected to reach almost $13 billion. Of this effort, 30 to 50 percent is commonly dedicated to integration, given the broad network of suppliers involved in development. This change reduced development complexity and enabled new cross-domain functionality, such as flight-propulsion systems that use camera data for navigation and obstacle avoidance. Accelerate product innovation and delivery for the digital mobility industry. But we are entering a new age in which automotive features increasingly rely on seamless integration among multiple vehicle subsystems. New software-defined features are deployed as they become ready and can be further improved over time. Now companies approach the design aspect in a different way. OEMs rapidly addressed these vulnerabilities, but such incidents exposed the risks inherent in connecting software modules developed for formerly independent domains. They will also need agile development frameworks, top talent, and efficient governance systems. Once the full set is available, OEMs or their tier-one suppliers try to stitch the modules together into a proprietary platform. And that’s only the beginning. Automotive-software development: Trapped in a maze of complexity. Even if a leading technology company develops an innovative end-to-end software platform, OEMs might be reluctant to deploy it across their fleets. Most transformations fail. Practical resources to help leaders navigate to the next normal: guides, tools, checklists, interviews and more. The governments of these countries plan to incorporate active measures to counter increasing pollution levels in urban regions. They would deploy a unified software architecture from the start, providing the foundation for new cross-domain features and updates. Security researchers demonstrated that they could connect to a vehicle’s drive-control systems via the infotainment interface, gaining access to powertrain, infotainment, and climate functions. An OEM’s in-house team may build some; others are purchased from suppliers or come out of strategic partnerships or joint ventures. Additionally, OEM collaborations would decrease reliance on tech powerhouses for software. For instance, the active suspension on several new luxury vehicles requires real-time interaction among ADAS cameras, powertrain sensors, and chassis actuators—three discrete domains with separate software architectures, operating systems, and middleware. This piecemeal approach is common among industry leaders because no single software platform on the market can meet all cross-system needs. Toby Clarence-Smith. Ryan Fletcher is an associate partner in McKinsey’s Southern California office, where Abhijit Mahindroo is a partner; Nick Santhanam is a senior partner in the Silicon Valley office; and Andreas Tschiesner is a senior partner in the Munich office. A provider of real-time ADAS operating systems is expanding into infotainment offerings, creating a safety-critical solution for driver notifications. All of this helps us deliver high-quality automotive software development services, ensuring a faster time-to-market, greater productivity and increased revenue for our clients. Changes in vehicle architectures along with feature-rich silicon platforms, presents vehicle architects the opportunity to consolidate functionality. Although this represents a fundamental shift in approach, it is likely to prove to be a critical lever against the threat of disruptive OEMs. OEM collaborations will not automatically produce excellent software, even if the companies involved have complementary skills. Companies from all over are trying to integrate these changes and trends created by the emergence of automotive software development companies. These features include: Vehicle-to-Everything (V2X) facilitates the transfer of data, enabling vehicles to receive information about and communicate with their surroundings, including pedestrians and other vehicles. In fact, there’s been over $90 billion invested in autonomous driving companies since 2017. Building automotive systems with performance and security in mind. An OEM’s in-house team may build some; others are purchased from suppliers or come out of strategic partnerships or joint ventures. For instance, several drone developers have moved from individual operating systems for flight control, wireless communication, and camera to a single platform that integrates code across the device. What’s next for software development in the automotive industry? As the automotive industry is transitioning from hardware- to software-defined vehicles, the relevance of software for core technology trends is increasing rapidly. These systems are not always backward compatible and thus require extensive redevelopment every few years to stay up to date with new features and performance. Select topics and stay current with our latest insights, The case for an end-to-end automotive-software platform. Automotive players have an extremely tough time keeping up. This first trend comes to revolutionize the automotive industry. The same pattern occurred with the German OEM collaboration, with other major OEMs licensing mapping data from the original three partners after their initial success. The path to an end-to-end platform will be complex, with some stakeholders assuming new roles or venturing into new software areas, and there is still much uncertainty ahead. in the automotive ecosystem has domi - nated industry debates in recent years. Predictive Automobile Technology. OEMs and suppliers will have difficulty dealing with this complexity because their productivity is not increasing at the rate needed to sustain innovation (Exhibit 2). But they need not bring all development in house. Performance and usability data are even collected across the fleet and fed back into R&D to inform future features and help prioritize projects. OEMs are awakening to the growing productivity problem and do not anticipate a quick fix. Building the required skills would be costly, difficult, and time consuming. For instance, as software becomes increasingly important, they will need to build solid … Please use UP and DOWN arrow keys to review autocomplete results. Eight trends affecting automotive software development 1. SYCL). How Software Will Dominate the Automotive Industry. Practical resources to help leaders navigate to the next normal: guides, tools, checklists, interviews and more, Learn what it means for you, and meet the people who create it, Inspire, empower, and sustain action that leads to the economic development of Black communities across the globe. These issues are not only distracting but also disappointing to consumers accustomed to streamlined, user-friendly interfaces in mobile phones and tablets—devices that cost far less than a car does. And you can’t even call the automobile industry a community because everybody is frightened of being outperformed by a competitor if they share anything about how they develop software … Three main challenges are covered: The software development processes, the shift towards CD / CI, and the programming of future - heterogeneous systems using open standards (e.g. Development efforts can be streamlined over the long term, with teams efficiently executing improvements rather than battling a maze of system interfaces for minor changes. Something went wrong. If you would like information about this content we will be happy to work with you. Fundamental readjustments to the whole automotive value chain seem inevitable. Toby has deep financial experience across investment banking, VC investing, and PE. We are beginning to see similar shifts in the automotive industry, with a few tech-focused players recently taking the first steps at integrating software elements into combined platforms (Exhibit 3). Since 2003, they have been working on the development and introduction of an open, standardized software architecture for the automotive industry. Finally, end-to-end software platforms could make dynamic resource sharing a reality—a shift that would reduce overall hardware costs while enabling the addition of new capabilities over time. But there is also a good reason for each of them to avoid solo efforts. Press enter to select and open the results on a new page. It’s responsible for powering features and products including: Some of these devices, including cameras and sensors, allow automotive companies to gather data on driving behaviors. Simplify functional safety compliance and verification in automotive development (ISO 26262, IEC 61508, Automotive SPICE, CMMI & more). In 2019, the top 10 Automotive software vendors accounted for nearly 58.9% of the global Automotive applications market which grew 5.9% to approach nearly $13.1 billion in license, maintenance and subscription revenues. OEMs and tier-one suppliers therefore face a daunting task of interface control and integration, creating major challenges in development, security, and performance. For instance, three German OEMs formed a consortium to acquire a mapping business, then worked together to improve the system for automotive use. Not surprisingly, players across the digital automotive value chain are attempting to capitalize on innovations enabled through software and electronics (Exhibit 1). In addition to enabling the deployment of an end-to-end software platform, this partnership could provide the tech company with complete control over hardware and software integration—a common pain point that often results in delays or suboptimal performance in the current development process. The latest automotive innovations, including intuitive infotainment, self-driving abilities, and electrification, depend less on mechanical ingenuity than on software quality, execution, and integration. As software content rises in nearly every part of the vehicle, so does the effort required to make different systems work as a cohesive whole. The rise of autonomous vehicles will cause a tectonic shift in the mobility industry―and incumbents must evolve along with it. The first indicator of just how important software development is in the automotive industry, there’s the fact that in 2020, its market share is $12,611,000,000. As the capabilities of software development services continue to grow, we’re likely to see even more innovations on the horizon. Learn more about cookies, Opens in new For ADAS, companies originally borrowed early software from aerospace applications and manufacturing automation; today, real-time operating systems from semiconductor players and embedded-software companies have become popular. This move will allow OEMs to create vehicles with a real-time, high-bandwidth information highway that links major systems together and opens the door for dynamic sharing of the full resource pool across a car. This data could fuel future trends such as subscription services. 1. Much of the problem relates to advances to in-vehicle networking that create links among formerly independent electronic domains, such as infotainment, ADAS, and powertrain.
2020 software development in automotive industry