Update: Microsoft, Toyota to jointly build telematics service

Microsoft and Toyota plan to use Windows Azure, the software giant's cloud offering, to build a telematics service that will initially serve people who have the car maker's electric and plug-in hybrid cars.

The companies said they will together invest $12 million in Toyota Media Service Co., a Toyota subsidiary that offers digital information services to Toyota customers. The goal is to build a global cloud platform by 2015 "that will provide affordable and advanced telematics services to Toyota automotive customers around the world," they said.

Telematics technology combines communications technology, like mobile networks, with other information technology like GPS and energy management systems.

During a press conference to discuss the deal, executives from the companies described examples of applications that could become available based on the new system. Applications could link cars, homes, the electricity grid and people to let users monitor the number of miles to the next charging station, use a smartphone to check battery power and instruct the car to charge at the time of day when energy is least expensive.

Akio Toyoda, president of Toyota Motor Corp., described a scenario where he might use speech technology to tell his car his daily schedule. The car would then give him the best route to his meetings based on traffic and weather conditions. While in the car, he could tell the system to turn on the air conditioning in his house before he returns home. He could control home lighting, heating and appliances too.

The applications that do this will become available to buyers of forthcoming electric and plug-in hybrid cars from Toyota and will initially serve customers in the U.S. and Japan because those are the countries that will get the cars first. "There is the potential of us being able to offer them not just through these vehicles but in others," Toyoda said.

The companies will be focused on "getting the platform right," which will open up the possibility of a wide range of telematics programs built by Toyota or companies that partner with the car maker, Microsoft CEO Steve Ballmer said.

Even though the companies said the cloud platform wouldn't be completed until 2015, they said the first applications would become available in cars sold next year.

Microsoft's investment in the project includes tech support as well as cash, Ballmer said, although he did not say what portion of the $12 million would come from his company.

He said the benefit to Toyota of working with Microsoft's Azure service is that the car company can offer the services in many markets and will pay only for what is used. "Historically this type of service was limited only to the major markets where the operator could build and maintain a data center," Ballmer said. "Toyota will have the benefit of paying for only the computing power used while scaling to support spikes in demand or entry into new markets."

Toyota is testing in Japan the Toyota Smart Center, a project that "links people, automobiles and homes for integrated control of energy consumption," according to the company. Such systems will rely more on telematics for achieving energy efficiencies, Toyota said. The company has a strong interest in smart grid systems because it needs to develop recharging systems and networks for future electric cars.

Last year the software maker said it would work with Ford Motor to add Hohm for Ford's electric vehicles. The system will help determine the most efficient time to recharge electric and plug-in hybrid vehicles, the companies said at the time of the announcement.

(Martyn Williams in Tokyo contributed to this report.)

Nancy Gohring covers mobile phones and cloud computing for The IDG News Service. Follow Nancy on Twitter at @idgnancy. Nancy's e-mail address is Nancy_Gohring@idg.com

This story, "Update: Microsoft, Toyota to jointly build telematics service" was originally published by IDG News Service .

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