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The evolution of the automobile into a “computer on wheels”
Over the past several years, software-defined vehicles (SDVs)—vehicles whose features, performance, and user experience are fundamentally defined by software, rather than by their hardware components alone—have garnered a great deal of attention in the mobility industry.
With this trend gaining momentum, modern vehicles are becoming virtual “computers on wheels”, and we are entering an era in which software updates will be available for our cars much in the same way they are for our smartphones.

Touted as the driving force behind the future of mobility, SDVs are a topic of interest for all manners of professionals given their potential to impact how we get around, how we live, how we design our cities, and for the solutions they may provide for environmental issues.
But what exactly are SDVs, and in what ways can we expect them to transform our lives?
To learn more, we prepared five questions for two prominent figures in the industry: Atsushi Hayashida, Chief Software Officer (CSwO) at DENSO, the world’s second-largest provider of automobile parts and components in terms of global sales, and Hiroshi Sugiyama, Senior Vice President at NTT Data, one of Japan’s leading IT service providers.
Contents of this article
Q1: What exactly is an SDV?

Hayashida An SDV is a vehicle that continues to evolve through regular updates to its software. Imagine that, after purchasing a vehicle, you could drastically improve its functionality or performance—say, through the addition of automated driving functionality, new safety features, or engine control optimizations—with just a simple software update.
In the past, a vehicle’s value was largely determined by its engine and other hardware components. With SDVs, however, it’s the software that will determine a vehicle’s worth.

Another way I like to think of it is that the true value of SDVs lies in how attached owners will become to them.
The ability to easily update a vehicle’s features with software means that people everywhere will be able to enjoy customizing how their car evolves every five or ten years. I believe this one-of-a-kind customization will result in an even greater sense of attachment for most owners.

Sugiyama We live in a day and age where every product and service is judged based on the degree to which it can be customized to fit the preferences of an increasingly diverse pool of consumers.
This has led consumers to demand more from their cars, too. Consumers are no longer satisfied with a simple means of transportation—they expect their cars to provide an experience that closely integrates into their daily lives.
SDVs also represent an area of untapped potential for many industries. IT companies are going to be developing software applications for these vehicles, and we’re going to see more and more businesses from other industries ramping up efforts to leverage the data collected by SDVs into new and innovative services.

For example, it’s possible to provide a service that could reduce the risk of car accidents by detecting a driver’s condition from data collected while the vehicle is being operated. In fact, we are even working with partners in the automobile and pharmaceutical industries to detect signs of dementia from driving data.
Right now, with more players entering the market from other industries and more co-creation happening between companies with diverse backgrounds, we really feel that SDVs are poised to deliver new value to society.
Q2: “In-car” and “out-of-car” experiences are key to understanding the SDV revolution. What do they mean?

Hayashida “In-car” refers to delivering value to drivers through equipment and systems installed inside a vehicle. On the other hand, “out-of-car” involves creating new value through connections to outside networks and society at large.
If you can wrap your head around these two concepts, you’ll have a pretty good idea of what will be possible with the coming advances in mobility.
One potential application that combines the two is having a vehicle use external data (i.e., out-of-car) to suggest an ideal place for a driver to rest when a sensor (i.e., in-car) detects that a driver is becoming fatigued.

But integrating the two isn’t as easy as it sounds—the biggest issues are ensuring safety and following the law.
Cars are responsible for transporting human lives. That means that, unlike with smartphones or PCs, there’s no margin of error for technical hiccups. Any sudden freeze or reset could have catastrophic consequences. What if a car’s dashboard gauges stopped displaying correctly? The driver might panic and lose control, or they may be unaware they are speeding and end up getting in an accident.
There are also strict legal regulations unique to cars that we have to follow, including a law requiring that backup cameras display an image within two seconds after a car’s engine starts. Ensuring that we comply with these laws—which can be both extensive and detailed—represents one roadblock.

At DENSO, we’re working on developing an “In/Out Integration Platform” to solve these issues. We’re aiming to build a foundation for safe and innovative mobility services by appropriately merging automotive technologies with IT and mobile technologies.
Our expertise in automotive software gives us an edge in developing the kind of foundation suited to integrating these technologies into vehicles. We hope to leverage that foundation and our more than 40 years of experience in in-vehicle systems to encourage our partners to enter the market.

This past June, we also announced a strategic partnership with NTT Data, a leader in cloud computing and other out-of-car technologies in the IT domain, that aligns perfectly with our goal of creating new value through the fusion of in-car and out-of-car technologies.
Q3: What makes collaboration between automakers and IT companies a challenge? What are the potential advantages?

Hayashida Given the direct potential for life-threatening consequences, any changes or differences in the design of automobiles must be strictly managed. Any and all issues that could lead to an accident must be identified and eliminated, and that includes not only direct defects affecting core components like the brakes but also indirect causes such as abnormal meter displays and sudden strange noises. This means great care must be taken when making any software changes.
In the IT industry, however, open-source solutions are mainstream, and a project’s quality is often judged by how many people are using it. These solutions require an agile approach involving frequent improvements, and this fundamental difference in thinking may be one of the biggest sticking points between the two industries in terms of collaboration.
Sugiyama From a tech industry perspective, the difficulty lies in the need to accommodate vastly different systems in a single vehicle. For example, financial and other systems that require high levels of security must be able to coexist with more flexible systems, such as those for general web browsing.

This means that developers need to change how they manage projects depending on the system, with a Waterfall approach for ensuring high quality results in secure systems, while an Agile approach is better suited to more general cases that prioritizes user convenience.
Of course, this type of coexistence is nothing new—we see it in corporate IT systems, as well. In the case of connected cars, however, we’re finding that handling these more complex integrations in a way that meets the industry’s strict standards of quality can be extremely challenging.
Hayashida When developing automotive tech, an Agile approach is great for building apps and other software. At the same time, creating an integrated system that combines different technologies, including some that use sensors to measure and quantify real-world data, is no easy task.
The key is finding the ideal mix of cutting-edge methods used by the IT industry and robust development strategies used in the auto industry. There is a lot we hope to learn from the IT industry, and we believe that putting our unique technologies and expertise together will enable us to create a safer and more innovative future for mobility.
Q4: How will SDVs change the way we live?

Hayashida As I said earlier, the emergence of SDVs is going to see cars becoming more deeply interconnected to society and playing a much larger role in the lives of owners. In terms of safety, these cars will be able to detect weather conditions and other changes in their surroundings and advise drivers accordingly. They’ll also be better for the environment. For example, the batteries in these vehicles will be capable of redirecting power back into their owner’s homes and local power grids when they are not being driven—and that is a difference for the environment you can really feel yourself making.
SDVs will also enable a whole new level of data-based personalization. When a driver has been driving for a long distance, these cars will detect signs of fatigue and suggest stopping for a rest. They could also use data from past activity to suggest a favorite coffee shop and, if the driver wishes, automatically place an order for them and begin navigating to the shop’s location. Then, when the driver arrives, their coffee will be ready and waiting—this is very close to being a reality.

Sugiyama While there is plenty of talk lately about people giving up on driving and the idea of owning a car, I think it probably has a lot to do with cars being perceived as little more than a means of transportation.
If we start seeing companies coming out with vehicles that can be updated according to their owner’s personal preferences and that offer suggestions tailored to them specifically, we’ll probably see another rise in the number of people who want to own their very own, one-of-a-kind car. I think we are on the cusp of a not-so-distant-future in which we’ll see the everyday car evolve from being merely a way to get around to an experience that integrates closely to other areas of their owner’s daily life.
Q5: What can we expect from DENSO’s partnership with NTT Data?

Hayashida At DENSO, we know our way around every inch of a car, but our edge lies in automotive parts and automotive semiconductors.
As a global company, we also deal with mobility-related companies all over the world, and our ability to apply cutting-edge knowledge and technical expertise to development is a major competitive advantage.
At the same time, as a leading Japanese company in the IT domain with extensive knowledge in software business monetization and cross-industry collaboration, NTT Data is a strong partner for us. We are confident that our strengths will blend well and lead to great deal of synergy.

Sugiyama While there are surely skeptics out there who would criticize this partnership, questioning just how much two slow-moving, major corporations can accomplish, we hope that by combining what we do best and inspiring each other, we’ll be able to impact society in a way that will change how the world views us.
Being large corporations also gives us certain advantages, particularly when it comes to cultivating and developing human resources. By promoting the engineers involved in mobility development as pioneers at the forefront of building a new future, and by elevating their status and standing in society, we may be able to attract more young people into the field, and could even provide added motivation to those already working as engineers. As major corporations, we want to contribute to the overall industry in a way that only large companies can.
We will also need talent with the skills in business development required to recognize the kinds of experiences and value that can be delivered through future vehicles—not only technologically but in other aspects as well—and that can pick the right business model for bringing them to life. I hope to be involved with cultivating and developing that kind of talent.

Hayashida Thank you. Yes, we would like to reach a place where people look at us and say, “Software from DENSO is what makes the mobility society of the future possible.”
Of course, there’s only so much one company can do to combat social issues on its own. That’s why we want to pioneer a new mobility society of the future through co-creation with NTT Data and other partners from various industries. If this is something that resonates with you, we’d love to have you join us in working to fully implement our ideas into society.
Credits
Author: Yuka Tsukada
Photographer: Yukinobu Kobayashi
Designer: Nanako Takagi
Editor: Fumiya Kimiwada
English Version: Cody Branscum
This article has been published with explicit permission following its interview, feature, and translation by NewsPicks Brand Design.
2024-09-20 NewsPicks Brand Design
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