How smart can telematics make a car?

Microsoft and the Toyota are on car telematics technologies that will tap into Microsoft's Windows Azure cloud computing platform and allow the cars to perform energy-saving functions and link with smart phones.

The companies plan to jointly invest a total of 1 billion yen, or about $12 million, in the project, which will involve Microsoft and a Toyota subsidiary, Toyota Media Service Co. The initial goal is to roll out Toyota electric and hybrid cars in 2012 that will enable users of the telematics innovation to save on energy costs, both in the car and remotely at home. The long-term goal is for Toyota Media Service to create an overall cloud platform for the delivery of services worldwide by 2015, according to the jointly released announcement.

Toyota and Microsoft have partnered on various technologies for more than 10 years. But, on the telematics side, Mr. Toyoda pointed to Toyota's efforts with a venture-cap Internet service startup called Gazoo, which began in 1998 and which he directed. He said that Microsoft "leant me a helping hand when I was struggling." For this current telematics deal, he called on Ballmer in January of this year to work out the details.

The telematics concept

The telematics concept was defined by the companies as the use of telecom and IT technologies in vehicles, including the use of the Global Positioning System satellite network for location tracking-type services and the use of wireless communications for safety applications. The initial goal is to provide power-savings tools for Toyota drivers, just as tracking the best time of day to charge the car, avoiding peak hours and higher electricity costs. The telematics might as well be used to turn on air conditioning automatically or control energy systems at home remotely. The system is expected to be controllable via smart phones.