Developing software-defined vehicles (SDVs) promises to unlock significant new value and monetisation opportunities for automakers. However, they must currently account for two deficiencies: lack of native software talent and an organisational culture that isn’t as conducive for software development as Big Tech’s. With even well-resourced brands like Volkswagen struggling to manage the transition, an in-house approach may not be optimal.
Over the last three years, automakers have spent almost US$100bn on automotive software. “The industry recognises that the future will be defined by software, and in-house sourcing is one of the big and costly experiments happening right now. But a lot of OEMs are now realising that there isn’t enough talent for them to do everything by themselves,” says Prashant Gulati, Chief Executive of SDVerse. The idea for his company, a global B2B market for buying and selling auto software, began to gestate in 2023.
Founded from a collaboration between General Motors, Canadian Tier-1 Magna and Indian IT solutions provider Wipro, SDVerse aims to unify what Gulati calls a “fragmented” ecosystem. “We’ve created a platform to help OEMs and suppliers can find the companies selling the software they need and integrate it.” The goal is to let the marketplace provide a foundation that will enable automakers to channel their resources to differentiation instead.
Amazon for auto software
The problem with moving away from in-house software development is that the alternative is not necessarily much easier to navigate. Streamlining SDVs depends on knowing exactly what the market can already offer so companies don’t constantly reinvent the wheel. However, as the importance of software accelerates, the industry has no common overview.
Gulati highlights that auto software discovery often lacks cohesion: procurement staff must piece together what they need to know through “analogue” channels, which could range from conversations with suppliers to attending in-person conferences. “It’s difficult even for people moving from the tech industry to automotive. Finding out whether the software they need already exists could take months.”
Officially launched on 30 September 2024, the SDVerse marketplace aims to enhance auto software discovery and thereby accelerate commercialisation by up to 80%, according to Gulati. “The user experience is similar to an e-commerce platform like Amazon. Customers log in and search and compare different products.” At the time of writing, there is no community rating mechanism for the results.
Designed for maximum efficiency, SDVerse allows sellers to list the precise features and attributes of their software, making it easy for buyers to find them. By inputting search terms like ‘parking software for a chipset with AUTOSAR compatibility on a Linux operating system’, the marketplace will provide applicable options. Buyers can then ask sellers questions live to ensure software compatibility.
The importance of feedback
For many in the industry, Tesla’s success is proof that focusing on vehicle software can provide significant new value for the industry. However, not every automaker is starting from the same position. “It’s far easier for companies with a ‘clean sheet architecture’ to make the transition,” says Gulati. “The challenge is greater for players with established supply chains, especially large automakers.”
SDVerse is also guided by a wider advisory council of industry executives from a wide variety of partners, including NXP, FEV, Forvia, and Valeo. From this feedback, companies within the ecosystem can ascertain how best to meet the evolving needs of automotive software. “This isn’t just a passive marketplace for buying and selling,” Gulati emphasises. “With these learning opportunities, we can more successfully monetise SDVs.” This is particularly important given software’s shorter product cycles relative to hardware, with which industry players have more prior experience.
He hopes that more OEMs and suppliers from every major global market will join and enrich SDVerse as the venture develops. In the short term, monitoring engagement and activity on the platform will be Gulati’s main focus, but expanding the range of products available is also a priority. Currently, the platform provides a range of foundational offerings—including cloud services, battery management software and tyre pressure monitoring solutions—with 180 comparable attributes. In the near future, he anticipates a surge of new artificial intelligence features.
For the industry, by the industry
Making automotive software independent from hardware has become a common rallying cry in the SDV community. By doing so, advocates such as Gulati believe more features and faster time-to-market can be unlocked. He points to Microsoft as representative of a similar inflection point for personal computers decades earlier: “It was the first company to develop software that could work on all hardware platforms.” For SDVs to flourish, automakers and suppliers must pursue a similar agenda.
“A lot of companies are exploring the shift from domain to zonal architectures. That work is important, but it’s also costly and time consuming, and the return on investment is uncertain.” Gulati positions SDVerse as a market force to instigate change even among legacy manufactures not yet exploring the possibilities of new architectures. As the automotive industry enters what former Stellantis Chief Executive Carlos Tavares called a “Darwinian” phase of big wins and losses, Gulati believes conserving resources will be paramount. “If an OEM can save six months of effort by purchasing some software that it was going to develop in-house, is that not valuable?”
If or when the transition to zonal architectures is complete, he posits that SDVerse will become more valuable still. “It will become even easier to find the right software, because then issues around hardware compatibility fade away.” Citing Warren Buffet’s creed that resource allocation should be a business leader’s number one priority, Gulati concludes that automakers must move away from the idea of becoming one-stop-shops in the SDV era. “There are plenty of consortiums looking to standardise the underlying technology; we’re interested in driving adoption by making the value of SDVs apparent. SDVerse is for the industry, by the industry; individual efforts will not work anymore.”
