When designing the next idea for a car most features developers focus in are hardware, however that is about to change. For decades, the development of power train technology and other hardware innovations gave automakers and suppliers an advantage in the market, and a significant source of ongoing profit through licensing. In recent years, however, there’s been a shift toward software rather than hardware giving car companies and Tier 1 suppliers an edge – not only in vehicle sales but in valuable intellectual property rights and revenue.
“Software is the major factor, and in some cases the deciding factor” in an automaker’s decision to buy one component over another, Egil Juliussen, a director of researcher at IHS Automotive, told Automotive News. He added that technology such as voice recognition and 3-D mapping and the software and electronics associated with such features can now cost more than a vehicle’s raw metal.
But “software expertise is in short supply in any industry, and certainly in the auto industry,” Juliussen noted. “That’s why suppliers are opening up research centers in Silicon Valley – it’s easier to attract talent.”
It’s why automotive supplier Continental recently launched a new career-training program in Germany for automotive software developers. It’s also part of the reason Continental purchased Elektrobit earlier this year, a company that specializes in software development.