The 2020 Automotive Software Survey Report, written by Ian Riches from Strategy Analytics and Roger Ordman from Aurora Labs, is now online!

Our 2020 Automotive Software Survey shows more evidence of the transformation happening in the automotive industry. Unique to this report, however, is the focus on two main vectors of transformation: more centralised vehicle architectures and more software developed in-house by the automotive OEM.

There are significant concerns as to how quickly the industry is moving and whether car manufacturers own the required skills. The function of OTA updates is crucial. Cost control and complexity will be essential to ensure that customers stay satisfied with their vehicles throughout their lifecycle.

The key conclusions of the 2020 Automotive Software Survey are as follows:

• There was wide agreement that OEMs will develop more software in-house, but only a lukewarm affirmation that they possessed the required skills to do so.
• This widely agreed trend is at odds with the current status quo, with the most popular answer to how many software suppliers there are to a current vehicle being 'Over 50'.
• Domain-based architectures are coming - but most saw volume deployment in MY2027 or later.

It is clear that the importance of software is growing for the automotive industry and evolving from an enabler for the hardware, to become key differentiating features. The vehicle manufacturers are being challenged to meet the resource requirements for software to become a strategic component of the vehicle and the automotive industry.

• Multiple aspects of ensuring software quality are seen as difficult and/or getting more difficult, with a strong expressed preference for the ability to have insight into the behavior of the software functions during the development process as well as to be able to predict software anomalies.
• There was overwhelming agreement that OTA updates bring far more than just the ability to roll-out bug fixes. This opinion was strengthened by the fact that 83% of respondents envisaged at least two OTA updates per vehicle per year, with one-in-six (17%) predicted more than 24 updates a year - and so we're clearly looking to see more than bug fixes implemented.
• It is clear that the OTA business will be on a very steep growth curve in the coming years. Market needs (a vehicle which continues to improve post-factory), OEM requirements (controlling the spiraling cost of physical recalls) and legislation frameworks are all now aligning.

The industry is acknowledging that software quality is no longer a single stage of the vehicle development process. Software quality is expected to be maintained throughout the vehicle's lifecycle and the vehicle manufacturers are expected to take a more proactive approach towards maintaining vehicle software quality.

To read the full 2020 Automotive Software Survey report with over 20 engaging graphs, please click here

'One Plus One Equals Three' is the title of a 1927 German silent film as well as a book by Dave Trott on creative thinking and creative writing. 'One Plus One Equals Three' is also a phrase that illustrates what is happening within the automotive ecosystem.

Over the last few years and moving forward, automotive companies are partnering with businesses outside of the automotive industry to deliver offerings that bring two disparate technologies together to create a third solution that reinvents business models, generates additional revenue streams and cuts costs.

According to BearingPoint/Beyond, a European, independent management and technology consultancy:

If automotive and transport companies want to thrive in a digital, mobility-enamored world, partner ecosystems must become a vital component of their reinvented business models. This will allow them to put a greater emphasis on customer relationships as the motor for innovation to create compelling new digital services formed through partner ecosystems which not only meet customer needs but drive them forward - while also being harder for competitors to simply copy.

Unexpected partnerships are bringing the automotive industry together with insurance, entertainment and hospitality companies, just to name few. For example:

• Ford has a deal with Liberty Mutual Insurance offering insurance discounts to customers who drive a Ford connected vehicle. On a consumer opt-in basis, Liberty Mutual is able to access data from Ford's connected cars to assess driving habits and decrease auto insurance premiums based on good driving.
• At CES this year, the electric vehicle manufacturer, BYTON, announced a wide range of partnerships bringing fresh content to an in-vehicle 48-inch display. ViacomCBS and Accuweather are two entertainment/information content companies working with BYTON to deliver an offering that enhances the driving experience.
• Uber has a deal with Hilton Worldwide enabling guests to set ride reminders, request vehicles to and from nearby locations as well as explore local scenes via a digital guide powered by Uber within the HHonors loyalty app.

Credit: Center for Automotive Research

For more than 100 years the auto industry was based on one company building a vehicle, one person buying it and one person driving it. Those days are over. One, single company cannot provide the new types of services and solutions desired by today's consumer.

While collaboration is key to the successful disruption of the industry, it is not without challenges. Once companies agree to partner, the complexities to success range from go-to-market strategies, branding, revenue splits, and team coordination. Core to the success of the partnership is its fluidity through planning and execution as well as ensuring a common lexicon, common measures, and common processes to help companies from vastly different industries integrate, communicate and prosper.

The majority of these services and joint mobility offerings require integration of software components into complex, multi-supplier systems. The mindset of fluidity, dynamic environments and consistent measurement and processes is also true for software integration and the dependencies and compatibility challenges that arise with software integration.

From a pure business perspective, the stronger the dependency between colleagues, supply channels, and infrastructure the higher the probability change will cause challenges to the integrated service. Having insight into how these elements interact will help predict and prepare for change assuring a successful launch of the unified offering.

Similarly, the stronger the dependency between functional components and software lines-of-code, the higher the probability change in one component will have a carry-on effect on other functional components in the system. Having insight into how these elements interact will help predict and prepare for change, again, assuring a successful launch of the unified solution.

Aurora Labs is the company leading this new dimension of providing transparency into the relationships and behavior between functional components in complex and dynamic automotive systems. The actionable data created enable the automotive ecosystem to predict, fix and validate software behavior, the foundation of all new mobility systems and services.

A watershed describes an area of land that contains a common set of streams and rivers that all drain into a single larger body of water. History shows that for new technologies to be successfully deployed, there needs to be a watershed moment where everything from powerful chipsets, to advanced networks, standards and interoperating components need to come together at the same time to truly leverage the power of new solutions and change the way people live, work and play.

This reality was recently reported in The Wall Street Journal's Decade of Disruption supplement. In Joanna Stern's article, First the Smartphone Changed then Over a Decade, it Changed Us, she quotes AT&T's former Vice Chairman, Ralph de la Vega, saying "When one piece of technology changes, it's a big deal, but when two or three things change that are complementary at the same, it's really disruptive."

For the mobile phone industry, only when the network technology (3G), operating systems (iOS and Android) and the phones' processing power, battery life and storage capacity reached a tipping point did mobile phones become ubiquitous to our way of life with consumers watching videos, receiving mails, playing, shopping, banking and surfing online all from the computer in their hand. This watershed moment also made over-the-air (OTA) updates truly beneficial for smartphone users. At this point in time, all of the firmware and applications - the entire phone - could be updated and continuously maintained throughout the lifetime of the phone.

Once OTA solutions were ubiquitous within the mobile phone industry, the OTA vendors set their sights on the automotive market. The car became the next device to update. Today, most of the over-the-air updates are keeping the non-critical head unit, infotainment system and telematics control unit updated. With the exception of Tesla, that built their vehicle platform as a software platform from the ground up.

New technologies comprising today's watershed moment for software as the predominant technology in cars -- the technology rivers and streams that are aligning -- are electrification, 5G, computer vision and software solutions based on advanced AI and machine learning. This convergence will ensure that automotive manufacturers can update more than the head unit, infotainment system and telematics control unit. This watershed moment will result in the ability to run software diagnostics and updates for the safety of critical and non-critical components alike throughout the entire vehicle - end-to-end, bumper-to-bumper, hood-to-trunk, bonnet-to-boot.

This watershed moment also offers the opportunity for automotive manufacturers to redesign their entire E/E architecture and adopt new centralized systems that manage in-vehicle software components as micro-services, ensuring flexibility, cost savings, software quality, safety and security.