Research on Automotive Software Vendors and Business Models

NEW YORK, Oct. 28, 2022 (GLOBE NEWSWIRE) — announces the release of the “2022 Automotive Software Providers and Business Models Research Report” report – =GNW
From the current layout of automotive software products and solutions, it can be seen that the smart car software business model includes IP, solutions and technical services, and the charging model is dominated by non-recurring engineering (NRE), software authorization/licensing, and royalties.

From the perspective of the product and solution layout of automotive software suppliers, their typical business forms are custom software development and design, technical services, software licensing/authorization, and system integration, with slightly different charging models.

As software and hardware tend to be decoupled and layered, software has become an independent core component product, and the automotive software industry chain has been reshaped. The lines between Tier 1 and Tier 2 suppliers are blurring as a result, and even OEMs will develop their own hardware and software. Automotive software suppliers are transforming from Tier 2 to Tier 1 or even Tier 0.5 suppliers, and their position in the industry chain is getting higher and higher.

Supply relationships between suppliers and automakers are also changing. The traditional automobile supply chain has been broken, and the original chain “supply” model has become a flattened “cooperation” model. Players with software and hardware development and integration capabilities are expected to become super suppliers, driving innovation and technological upgrading in the automotive industry.

Basic software layer: Under the trend of modularization, standardization and platformization, suppliers and OEMs establish a closer relationship and a more flexible cooperation model.

In Service-Oriented Architecture (SOA), automotive basic software is an embedded software platform used to realize the decoupling of software and hardware of automotive systems and provide software and hardware support for automotive system services. It is the key to realizing the intelligentization of automobiles.

In addition to chips and hardware, basic software is the most basic underlying capability in the entire industry chain. Major suppliers have redoubled their efforts in the development and innovation of automotive basic software products such as operating systems and middleware. In addition to large foreign suppliers such as Vector, ETAS, and EB, many domestic software suppliers such as Neusoft Reach, Xunlei Software, Jingwei Hairun, and iSoft Infrastructure Software under China Electronics Technology Group Corporation are also deploying automotive basic software products. Especially middleware products, most of which are AUTOSAR-compliant products, and hybrid platform software solutions based on CP and AP architectures.

In response to the market demand under the SDV trend, iSoft basic software provides AUTOSAR CP+AP integrated solutions for the two scenarios of security domain and high-performance computing domain, and combines with iSoft Cloud System to realize the implementation of intelligent connection. This solution is suitable for the field of intelligent cockpit, vehicle control system and ADAS/AD field. A service-oriented architecture is realized by standardizing the interfaces and architectures of different operating systems, underlying hardware, protocol software, etc. At the same time, iSoft Infrastructure Software is developing the corresponding operating system kernel for the field of intelligent cockpit and ADAS/AD, and comprehensively laying out the basic software platform for automobiles.

In terms of business model, iSoft Infrastructure Software positions itself as a Tier 2 supplier, adopts a model similar to VECTOR, and focuses on the development and application of basic software and tool chains. The “neutral” position allows the company to focus more on the development and application of vehicle basic software technology.

In 2018, Neusoft Reach launched China’s first self-developed automotive basic software platform product NeuSAR that conforms to the latest version of AUTOSAR. NeuSAR not only supports traditional ECU development, but also provides a wealth of basic software, middleware and development tools for software development based on domain control systems in a new generation of E/E architecture. It is widely used in control systems in the fields of automatic driving, intelligent driving, chassis power, and body control of the new generation architecture, providing the underlying software support for the more personalized and intelligent applications of the next generation of smart cars.

NeuSAR consists of NeuSAR cCore, NeuSAR aCore, NeuSAR middleware, NeuSAR DS and NeuSAR toolchain. NeuSAR cCore compliant with the latest AutoSAR Classic standard is widely used in mass-produced ECUs by OEMs and many Tier 1 suppliers; NeuSAR aCore is the world’s first commercial AutoSAR Adaptive product, which has been spawned and used in several autonomous driving domain controllers. NeuSAR’s high degree of compliance with existing standards and the stability established by its broad application make NeuSAR the industry’s preferred native AutoSAR product.

In 2020, under the guidance of the Ministry of Industry and Information Technology, Neusoft Reach led the establishment of the China Automotive Basic Software Ecological Committee (AUTOSEMO), which aims to help build an autonomous and controllable automotive basic software ecosystem.

Under the trend of “software-defined car”, the automotive software industry will usher in layering and modularization, and a group of professional middleware module suppliers will be born. It is difficult for automakers to complete the development of full-chain software modules. OEMs purchase software and hardware separately, and select hardware (chips) based on model positioning and price planning. They will also work with basic software companies, mainly operating system and middleware vendors, to build software architectures and adapter chips.

Application software layer: In response to differentiated and personalized needs, traditional suppliers have changed their development model from turnkey solutions to bilateral in-depth cooperation.

Based on SOA (Service Oriented Architecture), the SaaS (Software as a Service) business model is introduced. On the one hand, it provides users with an immersive entertainment space to meet users’ needs for emotional, personalized scenes and multi-modal interactions. On the other hand, it provides independent development space for OEMs and creates infinite possibilities.

First, before mass production, automotive software revenue mainly comes from non-recurring engineering project development fees and software license fees. The development fee for non-recurring engineering projects is the fee charged from the process of special software design and customized development according to the requirements of the first-tier supplier or the main engine factory to the final delivery of the development results to the customer. The use of software products (systems or development tools) developed by software companies requires payment of software license fees.

After mass production, the software charging model will be transformed into “royalty fees”, “technical service fees” and FOTA-based software upgrade fees. Among them, the royalties are the bicycle copyright fees charged according to the number of functional module IPs and shipments used by customers.

For car software companies, they can also charge sustainably for infrastructure services like water and electricity. An example is the SaaS model.

As far as the acoustic software OEM market is concerned, traditional car manufacturers often choose acoustic component suppliers or electro-acoustic brand products and sound services, while smart car manufacturers are more inclined to supply acoustic components for the purpose of cost control and rapid iteration. Merchants procure products and services.Standardized modular production, i.e. models that allow automakers to use their own or third-party tone patterns for overall audio tuning

For example, in February 2022, Harman announced Software-Enabled Branded Audio, an on-demand software platform that provides consumers with a user-friendly, affordable way to upgrade their existing unbranded car audio experience without additional hardware.

Vehicle-cloud platform layer: Under the new-generation infrastructure, an innovative model of vehicle-cloud co-construction and collaboration is realized.

With the improvement of the underlying infrastructure, the evolution of the new generation of automotive E/E architecture, the popularization of SOA-based design concepts, the improvement of cloud infrastructure, and the enhancement of cloud computing capabilities, cloud computing has become a vital productivity in the automotive industry. Vehicle-cloud integration data-driven will play a key role in the competition in the automotive industry.

Car Cloud is a digital ecosystem platform for car manufacturers to empower car travel and related intelligent services. Its service forms are divided into three types: IaaS, PaaS and SaaS. The IaaS layer is responsible for providing computing, storage, network, CDN, security, disaster recovery and other related infrastructure in the design, production, and supply chain links; the vehicle cloud services of the PaaS layer cover after-sales links (such as call centers, OTA, autonomous driving, vehicle The cloud platform architecture required for networking) and production design links (including simulation, simulation, etc.); the SaaS layer involves the sales and consumption of various functional applications that are paid for by service time or infrastructure quantity.

At present, vehicle cloud service providers mainly include: public cloud service providers that provide IaaS and Paas layers, such as Baidu Cloud, Tencent Cloud, Alibaba Cloud, etc.; companies that cooperate with cloud platform service providers and provide SaaS services, including PATEO, FutureMove Automotive, etc. Telematics service provider. The former charges for goods and services provided; the latter charges for services.

The cloud will be an effective complement to the vehicle, so professional cloud solutions and digital platform tools will be gradually introduced. The complete layout of car cloud products will empower the automotive industry to “integrate car cloud”. Whether it is to reduce costs and increase efficiency, or to be safe and reliable, OEMs alone cannot meet the needs of self-construction. It will establish a closer partnership with cloud service providers, jointly open up new scene maps, realize co-construction and empowerment, and become a two-way development process in which OEMs and cloud service providers keep pace and grow together. Target.

Neusoft Reach vehicle-cloud integration platform is a self-developed intelligent software product for the next-generation new E/E architecture. It is mainly composed of a vehicle-cloud integration tool platform, a vehicle-cloud integration core computing platform, and a vehicle-cloud integration software ecological service platform, which fully covers the SOA-based design and development environment and operating environment. The docking of in-vehicle capabilities and the re-integration of cloud big data and ecological service capabilities will quickly enable massive intelligent scene applications, with a high degree of vehicle-cloud synergy.

Based on the SOA design concept, Neusoft Reach’s integrated vehicle-cloud products build a digital base for intelligent vehicles with integrated vehicle-cloud integration, provide full-stack SDV products and services for OEMs, and enhance brand value from the aspects of “uniqueness” and “added value” and “” Evolvability”.

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