Software-only in the automotive industry

automotive industry

Software-only companies in the automotive industry

 

Software-only companies are entering the automotive industry. Is this the automotive future? However, there are some barriers to entry. Here are the key takeaways from Deloitte’s automotive software vision.

Amid the Covid-pandemic there has been an increase of possible scenarios about the future of the automotive industry. An industry that is so important that certain countries link a significant part of their GDP to it.

When it comes to imagining the future of the automotive industry, experts agree on at least three forces of evolution. The first is autonomous driving. The second, emission regulation and a shift towards electric vehicles. The third is the need for standardization and security.

The recent Deloitte article is analyzing future strategic options for software-only automotive companies. What changes for these companies, where is their role, and what barriers to entry do they face in the near future? Especially, now that the automotive industry is at a turning point.

The future of the automotive industry – Key takeaways

Technology companies entered the automotive industry and changed its course

The course of classic automotive player’s strategy has changes when big technology companies entered the industry. These companies introduced the concept of software-driven E/E (electric and electronic) vehicle architecture. And now the whole market is evolving with this concept soon at its core. Also, these technology companies pave the way for automotive software-only companies around the world, like software outsourcing companies, that support the biggest players in this shift. There is a need for more standardization and highly qualified talent.

Standardization is not a new concept in the automotive industry. However, keeping up with the pace of change in this competition-based industry is difficult. But the necessity is simple. Players in the industry, whether hardware or software, need to create pieces that will fit in many puzzles. This means independent applications, increased scalability, and outsourcing for third parties that have strong software engineering skills.

Ever-increasing on-board processing power and data flow capacity

New software features and products need increasing processing power. Advanced driver assistance systems, infotainment systems, head-up displays, and battery management systems all require a lot of processing power.

Furthermore, vehicle-connectivity increases as well. Plus, as vehicles level-up with autonomous driving, there is even more need for processing power.

From ECU to DCU to VC

It all started with a closed system, based on function-specific ECUs. Then their number grew with the required processing power. Now a modern vehicle has around 100 ECUs. These evolve into a few DCUs (domain-specific control units) and in the future the electronic architecture shifts toward a central or just a few domain-independent vehicle computers (VCs).

Challenges that software-only companies are facing

  • As the complexity of the industry increases so does the barrier to entry for software-only companies in this industry.
  • The shift from software embedded in hardware systems to independent software is changing the pricing approach, making providers vulnerable to the client’s perceived value of the product.
  • Big investment and a longer amortization which means higher financial risks.
  • Lack of stability and predictability in customer-requests.

These are some of the biggest challenges for software-only companies that are willing to enter the automotive industry. However, as the request for higher connectivity increases so does the need of the automotive industry for software companies.

AROBS and the automotive industry

AROBS is a software development company with a focus on automotive technology outsourcing, with over 20 years of experience. It was listed four years in a row in the Deloitte Central Europe Technology FAST 50.

Find out more about engineering services.

Image source: Pixabay

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Tech cities of the future are in Romania

Tech cities

Tech cities of the future are in Romania

 

Tech cities, Bucharest, Cluj-Napoca, and Iasi, are all main cities enlisted in the most recent study by fDi and TNW’s Tech Cities of the Future for 2020/21. AROBS, a leading technology company, has branches in all of these.

The study collected data of 76 locations analyzing five areas: Economic Potential, Innovation and Attractiveness, FDI Performance, Cost-Effectiveness, and Start-up Environment.

This study was created with the aim of mapping potential cities across Europe for business investment. Although large European cities like London, Paris, and Munich are still overall attractions, Eastern European cities are emerging at a very great speed.

Therefore, Romanian cities like Cluj-Napoca, Iasi, and the capital, Bucharest, are topping the lists in numerous categories.

Cluj-Napoca

Cluj-Napoca has a long academic history, that transformed this city into an IT hub filled with young people, smart ideas, start-ups, and foreign investment. In 2018, the city was named the Silicon Valley of Eastern Europe.

Cluj, Iasi, tech cities

In the above-mentioned study, it ranks 3rd in the Top Ten Tech Cities of the Future 2020/21 – Cost-Effectiveness category.

Cluj-Napoca is also the birthplace and host of numerous IT companies. It hosts the headquarters of AROBS Transilvania Software, one of the very few competitive software development companies with 100% Romanian capital.

Iasi

Iasi is an emerging hub for software development. It’s one of the largest cities in Romania, and just as Cluj-Napoca, has an academic tradition. On the Cost-Effective Tech cities of the future 2020/21 Top Ten it ranks 2nd, ahead of Cluj-Napoca.

Iasi Cluj tech cities, technology company

The city is also home for another AROBS branch, along Suceava, Baia-Mare, Arad, Cluj-Napoca, Targu Mures, and Bucharest.

Bucharest

As the capital of Romania, it is the biggest hub for innovation and investments in the country. With its over 2 million population, it is the main attraction for foreign business.  Bucharest ranks 7th on the Top 25 European Cities of the Future – Overall, outranking cities like Barcelona or Cambridge.

Bucharest tech cities, technology company

 

Conclusion

Software development and the IT sector as a whole has accelerated the growth and attractiveness of major cities in Romania, so much so, that the 3 main cities of Romania, Cluj-Napoca, Iasi, and Bucharest rank on top positions on many top-ten categories for cities of the future – as the fDi and TNW’s Tech Cities of the Future for 2020/21 confirms it.

AROBS, a Romanian technology company has teams in all these cities, enhancing the modern characteristics of these cities and actively participating in this revolutionary growth. With almost 1000 employees nationally and internationally, it has gained high expertise in industries as diverse as Automotive, IoT, Life Sciences, Enterprise Solution, and Travel&Hospitality.

Read our recent blog posts
Technology books
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Technology books that marked me

Technology books, especially the great ones, have a huge effect on our software development careers. Even though there are so many tech books written in this domain, there are only a few that really mark us.

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