Why Nissan's partnership with Microsoft will be seismic

As CEO and president of the Renault-Nissan Alliance, Carlos Ghosn transformed both marques from financial haemophiliacs to profitable cash cows, and his 20/20 vision of the future bears witness that we’re on the cusp of a quick-paced digital revolution.

He claims driverless autonomous cars and digital connectivity in the near future will impact and transform the automotive industry to a greater extent than the transformation from horse and cart. He’s bold and not a word wears heavy with exaggeration.

Ghosn tells where the auto industry is heading. “By 2030, 15 per cent of cars will be fully autonomous; 25 per cent of cars will be EVs; 25 per cent of cars will be shared; and 100 per cent of cars will be connected.”

It’s that last stat that strikes attention. Like air-conditioning in the 1970s and the CD player in the 1990s, connectivity will be the must-have feature of future cars, although right now few of us know what the hell ‘connectivity’ means beyond the apps on a smart phone.

Nissan with technology partner Microsoft is developing a digital connectivity platform based on Cortana, a voice-recognition concierge service. You command, Cortana responds.

Voice recognition has been around for a decade or more, but Cortana adds a level of artificial intelligence and advanced machine learning to interpret and anticipate.

“It is not just about issuing commands to the vehicle and hearing something back from the car. It is much more about the predictive capability of Cortana and being able to interface with the rest of your digital life so that the whole experience can be more predictive and more fluid and obviously more pleasant for our drivers and for our passengers,” said Ogi Redzic, Senior VP of Connected Vehicles and Mobility Services at Renault-Nissan Alliance.

Speech recognition is not just an interpretation from voice to text. It is a much more intelligent interpretation based on context, and that context comes from many different places. It comes from your phone, your calendar, where you are and where you’re going.

With context Cortana has the ability to predict and suggest. Redzic talked through a scenario as an example. “You can just say ‘set route for Westgate Theater’ and Cortana will do it. Or Cortana might say, ‘I see on your calendar that you have a speech at the Westgate Theater. Should I set the route?’ And all you do is say ‘yes’.”

Redzic joined the Alliance (including Infiniti, Datsun and Mitsubishi) a year ago with the directive of “accelerating development and deployment of connectivity applications.”

During the past year he’s recruited more than 300 staff split into two teams based in France and Japan.

Redzic is working to a deadline of months not years. “It will be quite a while before the entire fleet is connected, and we’d like to put new features like Cortana across our entire portfolio as soon as possible,” said Redzic.

Microsoft also partners with BMW and Volvo Car, but according to Sanjay Ravi, who oversees Microsoft’s automotive technologies including Cortana and its cloud-based Azure programs, “from a Microsoft perspective the work we’re doing with the Nissan-Renault Alliance is a very deep partnership.”

“We are not in the business of making cars. Our role is not to compete with the auto-maker. We are here to support them and help them aspirate their journey to becoming a digital business. Microsoft’s role here is really to bring in the leading edge technology and to be the partner to automotive manufacturers.

"To help them make the transformation [to digital] and also bring new innovative capabilities that they are focused on from a customer and a market standpoint,” said Ravi, who holsters his opinion after taking a well-aimed shot at Google and Apple.

“Automotive is huge for us and it is one of the largest industries at Microsoft. It is one of the fastest growing markets and one of the largest markets,” he claimed.

Connectivity at best guess is a 10-figure -- more likely 11-figure -- market in the short-term for Microsoft. That figure could grow quickly to more than $100 billion in revenue per year as cars begin to rely on advanced cloud-driven technology to become smarter, more intuitive and more autonomous.

The relationship between the two multi-national mega corporations is more than hand holding and sharing. Microsoft and Renault-Nissan describe their partnership as win-win.

“I will tell you that for me the real benefit of this relationship is that we can get real close to one of the leading technology companies in the world and tap into the R&D that Microsoft has in place," says Redzic.

“We can see what’s coming down the road and see how we can integrate those technologies into our cars earlier to the benefit of our drivers and customers. It is really important not to view this as simply a vendor-to-car-manufacturer relationship because I feel that it goes much deeper than that.”

Meanwhile, what defines the connected car? The short-hand answer is that the connected car is linked to the internet, but Ravi expands the definition.

“We’re going to start seeing vehicles becoming almost offices on wheels or your living room on wheels because of the experiences you have in the vehicle are going to be a lot richer," he said.

GM, Tesla and other manufacturers are already connected, but Cortana -- with its ability to think, interpret and predict -- will bring a higher level of interaction with the convenience of voice activation.

“The technology has gone through big, big development during the past few years,” said Redzic. “And big things are coming.”

As we reported earlier this week, Renault-Nissan used this year's Consumer Electronics Show in Las Vegas to announce a host of future technologies led by Microsoft's personal assistant technology Cortana and the "breakthrough" Seamless Autonomous Mobility (SAM) system.

According to Nissan, SAM was developed from NASA technology to partner in-vehicle artificial intelligence (AI) with human support to help autonomous vehicles make decisions in unpredictable situations and build the knowledge of in-vehicle AI. It says the technology will enable millions of driverless cars to co-exist with human drivers in an accelerated timeline.

Also part of Nissan Intelligent Integration, Japanese internet company DeNA will begin tests aimed at developing driverless vehicles for commercial services, with the first phase of testing to begin this year in designated zones in Japan.

Nissan also promised a new-generation LEAF EV in the "near future" at the CES, equipped with ProPILOT technology enabling autonomous drive functionality for single-lane highways.

Finally, the French-Japanese car-maker announced a new partnership with 100 Resilient Cities -- Pioneered by The Rockefeller Foundation (100RC), which is a global non-profit working to help cities build resilience to physical, social, and economic challenges.

Nissan is 100RC's first automotive platform partner and aims to help cities lay the groundwork for autonomous driving, electric vehicles and new mobility services.