Ford Motor Company (NYSE:F) Returns To Microsoft Corporation (NASDAQ:MSFT) For Connected-Car Services

Ford Motor Company (NYSE:F) is going back to Microsoft Corporation (NASDAQ:MSFT) for connected-vehicle support. The company had abandoned Microsoft for BlackBerry Ltd (NASDAQ:BBRY) amid technology glitches and customer complaints. The latest cooperation between the automaker and the software giant will be built around Azure cloud platform.

Do analyst foresee a double-top for F?

Data gathering

Among other features, Microsoft will support Ford Motor Company (NYSE:F)’s Sync 3 infotainment system, especially the ability to update the system wirelessly. Additionally, the partnership will enable Ford to obtain more data that increases the ability to understand user experience. The gathering of such data will be done with full permission of the vehicle owner.

According to Ford Motor Company (NYSE:F)’s director of connected-vehicle, Don Butler, their collaboration with Microsoft will also enable them to add more mobile services both inside and outside the vehicle.

The car data acquired wirelessly can help with remote diagnosis of a mechanical problem or alert the driver of a planned maintenance. Additionally, the data obtained through the cloud could also be used by insurers to obtain information about the usage of the vehicle or the driving habit of the owner.

Revenue opportunity

Ford also sees revenue benefits through its cloud network known as Service Delivery Network. While automakers previously depended on revenue from vehicle sales and leases, technology is opening up new revenue streams in the industry, which are some of the areas that Ford is seeking to exploit. Ford will allow third-party developers to enrich its cloud network so that they can new possibilities for drivers.

Ford Motor Company (NYSE:F) shifted to BlackBerry’s QNX two year ago after it left Microsoft because of widespread technology hitches. Microsoft had helped with the building of the earlier versions of Sync. However, it seems Ford feels that Microsoft is a better partner to support its cloud network. Microsoft also has connected-vehicle deals with other manufacturers including Toyota Motor Corp (ADR) (NYSE:TM) and a unit of China’s Chery Automobile known as Qoros.

Ford Motor Company (NYSE:F)’s Sync 3 could start shipping on some 2016 Ford models this year.

About the Author

Coper graduated from the University of Chicagi with majors in political science and journalism.

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