REDMOND, Wash., Jan. 8, 2001 The numbers speak for themselves.

According to
the U.S. Department of Transportation, Americans spend more than 500 million
commuter hours
per week in their automobiles. More than 650 million cars are registered worldwide, and
more than 55 million new cars are sold annually.
Automobiles, the ultimate in mobility, still play a key role in the lives of people around
the world and theyre here to stay.
So are computers. While carburetors and operating systems may seem like strange
bedfellows, the bond between high-tech and what began as Henry Fords dream in Detroit
is growing stronger and deeper by the day.
Technology is at work when you drive a car, when you buy one, when you interact with a
dealer and even at the automotive assembly plant. According to Microsoft, the company
is committed to helping consumers, dealers, manufacturers and suppliers save money and
time at key points throughout the automobile industry.
Operating Systems and Infrastructures Developed Specifically for the Automobile
Industry
The automobile industry is a very important area of focus for Microsoft,
says Jeff Brown, marketing manager in Microsofts Automotive Business Unit.
Working in close partnership with companies such as AAA Response, Bosch, Clarion,
Delphi, Denso, Siemens and Visteon, Microsoft is developing technologies that will
likely alter the very look and feel of the daily commute. While many of these services and
devices are still under development, Brown mentions Internet-based information such as
news, traffic updates, instant messaging, navigation assistance and back-seat
entertainment systems as examples.
And just in case the use of cellular phones and other handheld devices becomes illegal
while driving, Brown says that many of the new and emerging technologies are voice
activated. Microsoft has developed Speech Application Programming Interface (SAPI) so
that drivers hands remain on the wheel and their eyes on the road.
Were not new to this business,
Brown says.
Weve been building operating systems that are truly built for the automotive sector for
four years now.
Microsoft Windows CE for Automotive an operating system Microsoft has developed and
fine-tuned to bridge the gap between technology and the industrial revolution is currently
in its third version.

Microsoft Windows CE for Automotive is a critical component of the companys recently

unveiled Car.NET Framework, an infrastructure that, according to Microsoft,
revolutionizes computing and communications in the automobile industry.
The Car.NET Framework has its origins in the Microsoft .NET initiative,
Brown says, citing Microsofts vision of making computing available any time, any place
and on any device.
Working with a range of partners, we plan to develop and distribute services that,
combined with in-vehicle electronics audio and video, for example, or navigation will
empower carmakers, automotive suppliers and service providers to make traveling easier,
more entertaining, less stressful and safer.
Introduced in October 2000, the Car.NET platform applies Microsofts .NET principles to
the automotive industry in a number of ways. The platforms framework provides the
infrastructure and tools to build and operate services based on eXtensible Markup
Language, or XML, which provides a common method for identifying data from multiple
sources.
From the consumers perspective, the key is that this XML-based .NET framework will
allow a range of devices to interact seamlessly with a wide range of Web services, which
gives the consumer more and better information and entertainment choices in the car,
Brown says.
Microsofts Mobile Information Server will provide the server platform interface for the
wireless delivery of Web services to mobile devices. This server platform will support
connection to any Web service, including email servers such as Microsoft Exchange or
Lotus Notes. Microsoft says it will work with industry partners to develop new services,
including support for synchronized email, email browsing and remote software updates.
Were definitely on the road,
Brown says.
Weve got the operating system, and weve got an experienced team, and were moving.
Weve developed Windows CE for Automotive to enable system manufacturers to build
next-generation, in-car computing systems that improve safety, communications,
information and entertainment.
The third version of Windows CE for Automotive, according to Brown, includes a
number of key updates.
New debugging tools make sure applications work hand-in-hand with the operating
system, improving reliability. There is increased flexibility for application programming
interfaces (APIs) via an open, or customizable, configuration and platform builder kits.
Other improvements include new video sourcing and enhanced power management.
Windows CE for Automotive is smart enough to know when the technologys not being

used and therefore doesnt suck the juice out of the battery,
Brown says.
Microsoft also tested extensively the Critical Process Monitor (CPM) to make sure it
prevents system crashes and protects the system from viruses. Run-time recovery
capabilities are built in to ensure that the system will detect and automatically recover
from failures.
Telematics or wireless data delivery is expected to become a $20 billion industry by
2005. By 2006, experts predict that 50 percent of all new cars and 90 percent of the
higher-end models will have telematic-capable appliances. Microsoft, in partnership with
developers, device manufacturers and service providers, is ready to pave the road.
Were moving from static to smart Web-based devices that can be programmed using
XML,
Brown says.
Weve programmed Windows CE for automotive, our operating system, to be more
flexible and more scalable. In doing so, were committing ourselves to the whole new
wireless world.
Consumers and Dealers
Like all other businesses, the automotive industry, at its core, is about providing
customers with the best possible product at the lowest cost, in the manner most
convenient and efficient for both the buyer and the seller.
Microsofts solution is Carpoint (www.carpoint.com), the most visited car-buying site on
the Web, according to the company, which helps consumers research and buy new and
used cars from a network of more than 5,000 local dealers; and Dealerpoint, an Internetbased network that helps dealers access and manage information from manufacturers and
potential customers.
We developed Carpoint and Dealerpoint to create technology and services that make it
easier to buy or sell a car online. By working with the industry to deliver the tools they
need to better serve online customers, everyone benefits,
says Todd Weatherby, director of industry services for Carpoint.
Its all about providing value to the consumer and value to the dealer.
As more dealers maintain their own Web sites that welcome informed customers, and as
manufacturers develop Internet strategies, more customers will use the Web for
information on their next automotive purchase. Microsoft developed Dealerpoint 5.0 to
give a dealership one place to manage all of its Internet customers whether those
customers are from Carpoint, the dealers Web site, a manufacturers site, or another online
buying service. According to research, this allows dealerships an opportunity to offer
customers an online sales experience that results in higher customer satisfaction and
increased close rates.

Dealerpoint 5.0 includes several new features. For example, a dealership can now
customize the tool to meet its specific needs, including the creation and storage of email
templates that ensure a quick and tailored response to a dealerships Internet customers,
and an ability to set user access and workflow rules that reflect an Internet departments
specific structure.
Dealerpoint and Carpoint both provide rich and valuable information,
Weatherby says.
As our Internet partners grow, we will continue to build on those relationships in an
effort to deliver even richer applications for dealers.
Manufacturing
Imagine the time, money and raw materials that would be saved if customers, dealers,
suppliers and manufacturers were closely linked together. These efficiencies can be
realized, according to Peter Wengert, Microsofts Automotive industry manager for
manufacturing.
In fact, at some automotive plants they already have been.
Over the past four years, Microsoft has spent a significant amount of time filling the
gaps between applications within the automotive business enterprise everything from
the diagnostics of a motor on the assembly line all the way up to the ERP system inside
an automotive manufacturing plant,
Wengert says.
Our next step is to extend from the four walls of manufacturing, known as Windows
DNA for Manufacturing, to Microsoft .NET for Manufacturing, which allows for the
sharing of real-time information from a manufacturing plant, supplier or customer that is
local or on the other side of the world using the full power of the Internet.
For example, one major automotive manufacturer integrated multiple Web-based sales
channels with its mainframe production and order management system. In addition to the
manufacturers task of integrating an e-commerce platform with its legacy mainframe
facility, the company also needed to integrate its network of independent dealers and
manage the logistical complexities of delivering built-to-order vehicles to consumers.
The company enlisted Microsoft Consulting Services (MCS) to develop the systems
architecture and messaging infrastructure that comprise the core of the system. The
Microsoft BizTalk framework drives the system, using a standard set of XML document
definitions that enable the manufacturer to open its internal systems to consumers. The
inventory database, built on Microsoft SQL Server 7.0, is updated several times daily
from the entire network of dealerships. Orders and requests are initiated through a Web
browser interface, allowing customers access to the system through any of several Web
sites.

The result? The generation of 28,000 leads per month, processed and delivered to dealers
using Simple Mail Transfer Protocol (SMTP) messaging.
By providing its partners access to the standardized XML schemas and a common set of
application components, this manufacturer allows partners to design Web sites that
integrate seamlessly and transparently with its purchasing, ordering and manufacturing
systems,
Wengert says.
In addition, by creating standard XML documents for orders, vehicle configuration and
lead management, the manufacturer is driving standardization not only with its own
systems, but also in the entire industry.
Another case in point is the Delphi Automotive Systems Packard Electric facilities in
northeast Ohio, where a human machine interface (HMI) continually receives data from
the ordering system and transmits customer orders to the network of presses without a
middleman. Parts are taken off the presses by robots, which deliver the parts to their
proper shipping channels.
For Delphi, whose more than 1,500 customers include not only all of the worlds major
automotive manufacturers, but also major players in aerospace, telecommunications and
electronics, continuous improvement is a top priority. For Delphi, the investment in
technology has paid off. According to the company, it has realized productivity
improvements every time it has networked more of its machine or improved other
machine processes using Microsoft technologies.
Creating a Global Marketplace
The automobile industry is facing an unprecedented opportunity, says Ray Gage,
Microsofts Detroit-based business development manager in the U.S. Business-toBusiness e-Marketplace division.
Covisint, the planned automotive e-business trading exchange supported by General
Motors, Ford and DaimlerChrysler and joined by Renault/Nissan, has been designed to
allow OEMs and suppliers to reduce cost in their respective supply chains and bring
efficiencies to their business operations. Covisint runs servers on a Microsoft Windows
platform. Microsoft also provides the Microsoft E-Business Acceleration solution, a
means by which suppliers can connect via Covisint.
Our objective is to deliver a range of solutions that help automotive trading partners
suppliers and buyers, big and small seamlessly connect their business systems and take
full advantage of Covisint services to become more efficient and effective in the
marketplace,
Gage says.
Our value proposition is that we are delivering standards-based solutions at a low cost
that can scale to meet the demands of any business in the automotive supply chain.

In the automotive industry, Gage explains, there are very few buyers and lots of sellers.
He estimates that there are tens of thousands of tier-two and tier-three suppliers
suppliers who do partial assembly on a part, for example, and then pass it on.
Traditionally, the auto manufacturers only deal with the tier-one suppliers, limiting their
visibility and knowledge about whats happening down the line.
A lot of the waste is because of inefficiencies along the supply chain, not just between
the auto manufacturers and their tier-one suppliers but all along the food chain,
Gage says.
The feeling was that to improve we had to provide a ubiquitous knowledge platform
across the entire automotive supply chain to ring out the inefficiencies and waste that
often come from a lack of information or simply poor processes. We needed to bring
everyone onto a common platform with common standards and tools so that everything
from design collaboration to procurement to logistical and transportation were accessible,
affordable and easy to use.
The Internet, Gage says, offered a perfect vehicle. The technology solutions are now
available from companies like Microsoft that can enable the automakers, suppliers,
dealers and the after market to all participate. Depending on the trading partners IT
expertise, budget and business needs, Gage says a solution can be fitted and implemented
quickly. An auto manufacturer can easily access detailed and up-to-the-minute
information on the availability of a particular make and model of car seat. At the same
time, the supplier of that make and model of car seat can access data to calculate the
future supply and demand.
The Microsoft E-Business Acceleration suite runs in a Windows 2000 Server
environment and leverages the Microsoft BizTalk Server, Microsoft Commerce Server
and Microsoft SQL Server to perform the necessary functions,
Gage says.
Front-end connectors have been developed to ease the integration with Covisints
business systems and back-end adapters are available to integrate the trading partners
back-end business systems. Its really all about business systems talking to business
systems. The E-Business Accelerator Suite from Microsoft has been Covisint tested and
certified and can be implemented by a number of professional service organizations,
including Microsoft Consulting Services.
The result? According to Gage, a projected savings of about $3,000 per automobile,
accumulated throughout the manufacturing process from design to procurement to
supply-chain activities.
Gage says he is pleased with the relationships Microsoft has fostered all along the supply
chain.
I see Microsoft being a company that will play a key role in enabling businesses of all
sizes to be able to participate in business-to-business commerce,
he says.

Were in the process right now of reaching out to suppliers, and so far theyve been pretty
open to it. Suppliers want guidance from the auto industry, but they dont want to feel
squeezed, so were focusing on communication and collaboration. Its a great role for
Microsoft.
Bridging The Gap Between Technology and the Industrial Revolution
In many ways, the merging of technology and the automobile industry is in its infancy. As
manufacturers rethink processes from design to assembly, Microsoft continues to develop
and implement technologies specifically for the manufacturing arena by following its
.NET strategy a vision that calls for computing to be possible at any time, any place and
on any device.
In the automotive industry, this means not only new devices, but old ones as well. A
stamping press, for example, can be retrofitted so that it can receive and transmit
information to and from the Internet in a secure manner.
This machine would have cost millions of dollars to replace,
Wengert says.
Its important that we continue to develop means of connecting to networks of legacy
systems without having to replace the hardware.
In the future, Wengert says, he pictures the automotive industry as a more agile one.
I think long design times, long delivery times and increased recalls will become a thing
of the past,
he says.
Microsoft is working hard to develop technologies that allow manufacturers, suppliers,
consumers and dealers to take full advantage of improving lead times, collaborating with
one another and lowering costs.

BARCELONA--Bill Ford, bitten by the Silicon Valley bug, has dreams of a fast-moving
Detroit at the heart of a radical overhaul of personal transportation.
As the executive chairman of Ford Motor Company and great grandson of the company
founder Henry Ford, he's got deep roots in a century-old industry. Ford predicts a future,
though, in which computing and communications technology is no longer an accessory
but instead a primary part of a car, and in which the auto industry works on the same time
scales as the electronics industry.
There was a time when technology suppliers would have a brief window to integrate their
products with a particular car model that would remain essentially unchanged for years.
But no more, Ford said in a speech here at the Mobile World Congress show in
Barcelona.
"That world is finished," Ford said. "We've cut our product cycle down dramatically.
We've gone from 5 to 7 years to 2.5 or 3 years...Now technology is what drives our
business, and it is going to be one of the big differentiators."
He told an audience member who was dissatisfied with working with a sluggish
automotive industry, "We now have a mindset of executives in our company who get it
and who aren't going to keep you at arms' length and tell you to come back in a few
years."
Even though Ford said his company gets it, it's evident that there's still a chasm between
Silicon Valley and Motor City.
"I serve on the board of eBay. Watching PayPal and eBay innovate in real time and going
back to Detroit--it's not exactly the same world," Ford said, looking somewhat at a loss
for words. "But it's getting closer."
In his speech, he forecast a future in which cars will become radically different. The sheer
force of population growth, concentrated in urban cities with 10 million or more people,
will force the change, he said. It's just not possible to continue the status quo when
today's population of 7 billion reaches 9 billion and the number of cars on the rode
quadruples from 1 billion to 4 billion, as forecasts for 2050 project, he said.
With no change, cities will seize up into "global gridlock" that emergency vehicles and
food delivery trucks can't penetrate. "At that point, global gridlock becomes a human
rights issue, not just an inconvenience," he said.
With change, though, things will look very different.
"We have to change the way we think of our cars," Ford said. "We tend to think of cars as
independent, individual devices. Now we have to look at them the same way we look at
laptops, earphones, tablets--as pieces of a much richer network."

And of course, there will be self-driving cars--something Google is working hard on,
speaking of Silicon Valley.
In-car networked computing systems today suggest routes around traffic. As that
computer involvement becomes more active, cars will drive themselves in "platoons"-groups of vehicles linked on the highway for efficiency. "We will take increasing
advantage of cars as a rolling collection of sensors," Ford said, "eliminating traffic
accidents at intersections."
His forecasts for mid-century transportation start sounding a bit more utopian.
"Pedestrians, bicycles, cars will be woven together into a single connected
network...We'll see the first vehicles able to navigate complex environments on their
own," he said. "You'll be able to plot and reserve a parking space before your trip, and
your car will park itself when you drop it off, maximizing parking density. Gridlock in
urban centers will be reduced. Personal ownership will remain, but we'll complement it
with instant sharing services. Software will plot either the most efficient or enjoyable
route."
To one audience member, this sounded more dystopian than utopian, especially given his
worries that government regulation would be part of the reason for the changes. "Are we
all going to get in the same pod and end up somewhere under computer control? How do
you balance the regulatory side from the government with the freedom the automobile
has generated?"
Ford, though, said the freedom of the open road will be an archaic concept for urban
dwellers.
"As we move forward, the world is getting ever more crowded, and in particular cities are
getting ever more crowded, Ford said. "Where are those cars going to go? How can you
afford them? Where can you garage them? The freedom of mobility does not necessarily
equate to the freedom of ownership. We'll have freedom, but it just may not be under the
same economic model we have today."