Analyzing Amazon AWS in Automotive Context

Article By : Egil Juliussen

How exactly has Amazon found its way into the automotive market? The short answer is through its AWS (Amazon Web Services).

So, how exactly has Amazon found its way into the automotive market? The short answer is through its AWS (Amazon Web Services).

Amazon AWS started developing API-based (application programming interface) cloud services around 2003. AWS cloud computing technology was for internal use, until 2006 when Amazon launched AWS for external use. This means that AWS has at least 15 years of experience in developing, testing, updating and improving its cloud computing service portfolio — and simultaneously keeping up with Amazon’s amazing growth and vastly expanding its external customer base.

I have written two earlier columns on Amazon. The first column has perspectives on how big Amazon is and how it is a major user of transportation services and logistics: Amazon Quietly Worming Its Way into the Auto Industry. The second column is about what Amazon may do in autonomous vehicles for its logistics and its participation in AV use-cases: Amazon’s Playbook on Autonomous Vehicles.

AWS is the clear leader in cloud computing and has gained a lot of automotive customers in the last five years. I think a few quotes from a December 8, 2020 press release by AWS and BMW is illustrative of how well Amazon AWS is doing in the auto industry

The companies will combine their strengths as industry leaders to jointly develop cloud-enabled solutions that increase efficiency, performance, and sustainability across every aspect of the automotive life cycle, from vehicle design to after-sales services. As part of the wide-ranging collaboration, the BMW Group will migrate data from across its business units and operations in over a hundred countries to AWS. The move will encompass a number of the BMW Group’s core IT systems and databases for functions such as sales, manufacturing, and maintenance, and will help them increase agility, achieve new insights, and more quickly innovate new customer experiences. In addition, the companies will invest in enabling and training up to 5,000 BMW Group-affiliated software engineers in the latest AWS technologies and empower the company’s global workforce to make better use of data.

Yes, there is some “PR-fluff” but it is still very clear that BMW has a strategic relationship with AWS and will be relying on AWS cloud platforms to a large extent instead of in-house IT centers.

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There are many other auto companies using AWS cloud computing resources and services. When I see an important trend like this, I want to understand the why and how and potential future impact. This column is an attempt to do so, but the research became complicated because AWS is doing so much and is rapidly evolving and improving IT and cloud technologies. The result is a lot of AWS product names where I make short explanations of what it means.

Let me first look at the overall factors that is making AWS so strong in all industries including automotive cloud applications:

• Cloud experience and economy of scale. AWS revenue in 2020 was over $45 billion versus $3.1 billion in 2013.
• Largest global cloud infrastructure company, providing 200 cloud services. AWS has over 80 Availability Zones (AZ) in 25 regions of the world, with each AZ having one or more data centers.
• Huge ecosystem of companies that add innovative software tools, apps and services.
• Thousands of partners with expertise to help AWS customers to develop cloud services.
• Flexible pricing strategy. Most of AWS cloud development tools are free to use during the customers’ product creation phase. The fees start when the developed product run on AWS cloud systems. Overall AWS prices are well below the cost of in-house IT systems with more flexibility.
• AWS auto clients include: Audi, BWM, Continental, Denso, Elektrobit, Honda, Kia, Lyft, Mazda, Mobileye, Momenta, Panasonic, Renault, Scania, Tata, Toyota, TuSimple, Uber, Volvo Group, WeRide, VW, WirelessCar and many more.
• World class expertise in developing and using AI technology is a major advantage.

AWS has all the necessary capabilities to gain more automotive clients. The next figure is an attempt to use a picture to provide perspectives on what AWS can do and include auto client examples. I am using four product phases to illustrate the breadth of AWS products and automotive customer examples.

The blue boxes list the four product phases—create, make, market and use—with typical activities listed in each box. The four green boxes list a few AWS products with more explanation below the figure. The four red boxes are example AWS users—again using the four product phases.

AWS cloud computing and ecosystem
The above figure also has two black boxes that summarizes the core AWS cloud computing infrastructure in the top black box and the AWS ecosystem for developing cloud services for AWS customers in the middle black box.

The AWS cloud computing box list three key acronyms—IaaS, PaaS and SaaS. Infrastructure-as-a-service (IaaS) provides cloud computing systems — including servers, storage, networking and operating software as a virtualized service. Platform-as-a-Service (PaaS) includes software development and system software resources, where the customers can develop their own cloud applications. SaaS-based cloud platforms run on top of IaaS and PaaS.

AWS has built a valuable software and service ecosystem for its cloud computing environment. There are hundreds of software and cloud development tools from Amazon and its partners. There are thousands of developers, builders and architects that can help create new cloud apps tailored to AWS customers’ needs and requirements.

AWS Marketplace is a digital catalog with thousands of software listings from independent software vendors that are easy to find, test, buy, and deploy on AWS. AWS Marketplace has over 10,000 products listed on the AWS website.

Another indication of the popularity of AWS is that Amazon’s virtual conference called re:Invent in December 2020 had over 570,000 attendees. Amazon’s website has excellent coverage of announcements and presentations. Amazon had 145product  announcements at this conference.

AWS product examples
AWS has an expanding product offering. The following paragraph (I shortened it slightly) is how AWS explain its services as of March 2021.

Currently AWS offers over 200 services for compute, storage, databases, networking, analytics, robotics, machine learning and AI, IoT, mobile, security, virtual and augmented reality, and application development, deployment, and management from 80 Availability Zones (AZs) within 24 geographic regions, with announced plans for 12 more AZs and four more AWS Regions in Indonesia, Japan, Spain, and Switzerland. Millions of customers—including the fastest-growing startups, largest enterprises, and leading government agencies—trust AWS to power their infrastructure, become more agile, and lower costs.

I have listed a few of these AWS products in the four green blocks. Many of the products will work in all of the four product phases: create-make-market-use. I tried to put each product examples where the functionality seemed to have the best match.

If you need better descriptions of the 200 AWS products, the link here has separate links to each product’s functionality. It also has data on Amazon’s regions and what services are available by region. The data is updated daily. The following is a short description of the 16 product examples in the green boxes.

• Amazon API Gateway is a fully managed service that makes it easy for developers to create, publish, maintain, monitor and secure APIs at any scale.
• Amazon SageMaker are used to prepare, build, train and deploy machine learning models.
• Amazon SageMaker Ground Truth is a managed data labeling service that makes it easy to build accurate training datasets for machine learning.
• Amazon Rekognition makes it easy to add image and video analysis to applications using proven, scalable, deep learning technology that requires no machine learning expertise to use.
• Amazon Elastic Compute Cloud (EC2) is a web service that provides secure, resizable compute capacity in the cloud.
• AWS Industrial IoT adds analytics and machine learning to industrial operations using pre-built machine learning models for common industrial use cases and deploy on devices or in the cloud.
• AWS IoT Device Defender is security management for IoT devices. It continuously audits IoT configurations to verify they are not deviating from security best practices.
• Amazon DynamoDB is a flexible NoSQL database service for any scale. DynamoDB can handle more than 10 trillion requests per day and can support peaks of over 20 million requests per second. Hundreds of thousands of AWS customers use DynamoDB.
• Amazon Simple Storage Service (Amazon S3) is built to store and retrieve any amount of data from anywhere. S3 stores data for millions of applications for companies all around the world.
• Amazon Aurora Serverless v2 scales to hundreds of thousands of transactions in a fraction of a second, delivering up to 90% cost savings compared to provisioning for peak capacity.
• Amazon Athena is an interactive query service that makes it easy to analyze data in Amazon S3 using standard SQL.
• Amazon Redshift can analyze, query and combine exabytes of structured and semi-structured data across a data warehouse, operational database, and data lake using standard SQL.
• AWS IoT Core connect IoT devices to the AWS cloud without the need to provision or manage servers. AWS IoT Core can support billions of devices and trillions of messages.
• AWS IoT Greengrass is an open source edge runtime and cloud service that helps build, deploy, and manage device software. Customers use it on millions of devices in homes, factories, vehicles, and businesses.
• AWS Lambda is a serverless compute service that run code without provisioning or managing servers, creating workload-aware cluster scaling logic, maintaining event integrations, or managing runtimes. Lambda can run code for virtually any type of application or backend service with zero administration.
• Amazon Kinesis makes it easy to collect, process, and analyze real-time, streaming for timely insights and react quickly to new information.

Auto product phases
The auto product phases are shown in the four blue boxes. If you want more perspectives, I wrote a column on this topic in November 2020: ‘Create-Make-Market-Use’ Applied to Automotive Analysis.

For software, the create or development is the most crucial phase that has a major factor in determining success. AWS has a wealth of products and services to be successful in the create phase.

In the make phase AWS is very strong for all of the traditional functions such as factory and production management. AWS also has the needed portfolio for supply chain and inventory control and can replace a company’s internal IT systems in many cases.

The AWS story is the same for the marketing phase. AWS has a wealth of product and service for sales, marketing, customer acquisition tools and dealer logistics. AWS is again in position to substitute for in-house IT systems for some companies.

The use phase is becoming a major opportunity for SaaS and cloud computing applications and it is no surprise that AWS is at the forefront for introducing and deploying these functions. The previous column has perspectives on this topic: Changing Roles of Automotive Software.

Auto customer examples
The four red boxes show examples of how some auto OEMs use AWS as their platforms. I picked four examples for each of the four phases: create-make-market-use. All of the examples are described in more details at the AWS website.

• BlackBerry IVY uses QNX data abstraction and AWS’ Edge cloud computing services and operates within a vehicle’s embedded systems. An API allows developers to create contextually aware in-car experiences without worrying about automotive programming languages, hardware variations, proprietary sensor data formats, or accessing safety critical systems. Developers can build applications with in-car data for multiple brands, makes and models. The result is a larger volume opportunity.
• Toyota Research Institute (TRI) developed an ”automatic map generation platform” for automated driving. TRI used AWS serverless architecture to construct the platform in just two months.
• TuSimple is using AWS for L4 autonomous truck testing to speed up data collection, pre-processing collected data and analyzing the test data across multiple groups in different countries. TuSimple was collecting 5 Terabytes per day during L4 testing when this project was done in 2018.
• Momenta is developing autonomous driving systems based on deep learning, perception, high-definition maps and driving decision algorithms. Momenta’s strategy is to test and deploy AV technology. Momenta has over $700 million in VC investments including recent investments from Bosch, SAIC and Toyota.
• BMW and AWS made a strategic agreement as described above. BMW said it would use AWS cloud technology across its business operation such as supply-chain management and production forecast demand. Basically, BMW will replace most of its IT systems with AWS cloud systems.
• Volkswagen is building its Industrial Cloud on AWS. It will be a cloud-based digital production platform that will transform VW’s automotive manufacturing and logistics processes.
• BMW used AWS to build its next-generation Unified Configurator Platform. At the AWS Summit Berlin 2018, BMW presented a deep dive into the journey from an on-premises, monolithic application to a microservices-based platform in the cloud.
• Carlabs developed an AI-driven chatbot for interacting with OEMs’ customers such as Honda.
• Renault is trying a wide-ranging digital transformation to focus more on services with AWS being central to this transformation. Renault’s first project on the new platform increased sales conversion rates by 15X and customer contacts by 25X.
• ZeroLight’s Virtual Reality Car Configurator was built with AWS and are used by many auto OEMs for showing car buyers specific models they are interested in buying. The latest ZeroLight Car Configurator was launched on Amazon Live streaming service in March 2021. Numerous OEMs are using it for sales and marketing.
• Toyota Connected built a resilient, scalable, and cost-optimized mobility services platform that uses data insights to improve safety and convenience. The platform uses a serverless architecture that increase mobility for its individual and fleet customers. It is interesting that Toyota’s presentation on the project says “serverless” is equivalent to “just-in-time delivery”.
• Volvo (Truck) Group migrated to AWS in 2015 with the goal of faster time to market and scalability. Since 2015, most of Volvo’s services are built on AWS, and the AWS Cloud is the foundation for Volvo Group to deliver connected services to more than 800,000 trucks, buses, and machines.
• WirelessCar congestion charge service powered by AWS accelerates digital business models for car manufacturers by enriching vehicle journey data.
• AWS has its own connected vehicle platform that is used by some OEMs. The AWS Connected Car Solution is a reference design to connect and authenticate vehicles to the AWS cloud. It includes local computing within vehicles, sophisticated event rules, data processing, storage, analytics and machine learning. It provides a framework to integrate AWS IoT and AWS Greengrass into the Automotive Grade Linux (AGL) software stack.

Summary
As you can see from the above data, Amazon AWS is already a formidable competitor in automotive electronics development and long-term operation during the cars’ lifetime use pattern. AWS is also taking over the IT functions in manufacturing, sales and marketing for some auto OEMs. Amazon AWS has competitors with Microsoft Azure best positioned for automotive business.