Ford’s high-tech business transformation, fueled by cloud

The American auto giant’s cloud-first strategy has helped drive its shift to ‘software-defined vehicle’ manufacturing, replete with revenue-generating services that make it a cloud software provider as well.

Ford Motor Co.’s wholesale pivot to technology has transformed not only the automaker’s business operations but its corporate identity.

“We have become much more of a software company than we were 10 to 20 years ago,” says John Musser, director of engineering for Ford’s commercial division, Ford Pro. “People don’t think of a large, 100-year-old manufacturing company as high tech.”

But it is — and Ford now positions itself as a software-defined vehicle (SDV) manufacturer, Musser says.

One need only look within Ford’s executive ranks to see the technology talent driving its digital future: Doug Field, Ford’s chief electric vehicle (EV) and digital systems officer, and Rob Bedicheck, executive director of platform architecture, were both recruited from Apple. Mike Amend, Ford’s chief enterprise technology officer, was once CTO for Dell’s global online business.

Musser himself has spent his entire career developing software, at Ford, on Wall Street, with the Bill Gates Foundation, and at several startups, including one he sold to MuleSoft.

But it is the cloud — and Ford’s cloud-first strategy — that is propelling Ford’s transformation where the rubber meets the road.

Fueled by cloud

Ford’s cloud journey, which began roughly a decade ago, continues to this day, Musser says, as the automaker seeks to take advantage of advances in the key technologies fueling its transformation, including the internet of things (IoT), software as a service, and the latest offerings on Google Cloud Platform (GCP).

Ford is unique among large automotive manufacturers in its selection of GCP, which Dave McCarthy, research vice president of cloud and edge services at IDC, says provides Ford a strong foundation for data-driven operations.

“Google Cloud’s strength in data analysis and AI tools is a perfect fit for this new world of software-defined vehicles,” McCarthy says. “It will enable Ford to better understand how their vehicles are performing in the field and lead to future improvements.”

Three years ago, Ford reorganized its cloud-first, SDV manufacturing organization into three interconnected though separate business units: Ford Pro, for commercial customers; Model-E, for electric vehicles; and Blue, for traditional customers and vehicles employing all engine types.

The cloud, Musser maintains, has been the primary catalyst for the SDV blueprint, driving technology advances in each unit, such as EVs, automated driving capabilities, and tailored services for multiple customer segments.

“We now have the ability through digital connectivity to provide a one-stop shop for commercial customers,” Musser says about Ford Pro’s ability to provide unique technical and financial services for commercial customers. “It’s the software, the digital glue, which is the key to enabling that to happen.”

Ford’s digital transformation, like those of most enterprises, is far from complete. The American automobile giant continues to move internal workloads to Google’s cloud and to deploy Salesforce throughout the workforce as it assembles next-generation EVs such as the F-150 Lightning pickup truck as well as hybrid and traditional combustion vehicles embedded with myriad IoT devices and sensors.

As testament of its digital bona fides, Ford has developed software platforms such as the Ford Pro API, which makes data from highly connected commercial vehicles available for both internal and partner applications, says Paul Dumas, senior director analyst for software engineering and API strategy at Gartner.

“Even more, using the logistical power of APIs to marshal and transport this data to customers, Ford Pro created a SaaS product that is a revenue stream for Ford Pro,” Dumas adds. “This SaaS product provides customers with data and analytics to help them maximize fleet performance and efficiency.”

For example, with every vehicle that has rolled off Ford Pro’s assembly line for the past three to five years “connected by default” with digital cockpits, data from these devices and sensors, available via Ford Pro’s APIs, can inform customers about how much capacity they need for fleet usage and for planning their long-term charging strategies, Musser says.

In this way, Ford’s API strategy, fueled by the cloud, has expanded Ford Pro’ value proposition for its larger commercial customer segment, making Ford a cloud software vendor in its own right.

“We have this combination like any large enterprise cloud software vendor,” says Musser, who has also served as Ford’s director of data and analytics for autonomous vehicles, and director of platform engineering for FordLabs. “We use the cloud software that we’re building. The embedded software in the vehicle goes all the way up the cloud.”

Technology at the center

Technology acquisitions and partnerships are another key enabler of Ford’s high-tech transformation.

In 2021, Ford acquired Silicon Valley startup Electriphi for its EV charging management and EV fleet monitoring software. The services, which are now part of Ford Pro’s services offering, are being enhanced with advanced charging and energy management services for the division’s commercial customers.

Ford Pro’s services arm also uses digital tools to provide automated reporting and maintenance of commercial pickups and vans to help customers optimize EV mileage and annual battery use. The ability of all SDVs — combustion-based, hybrid, and fully electric — to feed data up to the cloud provides developers with a plethora of unique opportunities to build algorithms that optimize, and in some cases, automate, vehicles.

On the security side, for instance, Ford announced a partnership in early 2022 with ADT called Canopy to develop a series of AI-powered connected security cameras and corresponding mobile application that guards the pickup and van fleets of commercial customers. This advanced security service saves commercial fleet operators in labor and provides more comprehensive security for the fleets at home or on the road, Musser says.

In addition, Ford has employed UiPath and Pega robotic process automation (RPA) software to automate business processes and, in conjunction with IoT devices, many subsystems within vehicles. For several years, Ford has been developing algorithms to upgrade vehicles with more sophisticated technologies and services such as order allocation optimizers and parts optimizer algorithms, as well as services such as Blue Cruise automated driving capabilities.

Ford’s forthcoming use of AI will further enhance those services, says Musser, noting supply chain optimization and customer demand matching among the key machine learning algorithms Ford is developing today.

AI everywhere

Ford also plans to leverage generative AI across the company, though that initiative remains in its infancy, Musser says.

To that end, the automaker has launched several pilots using natural-language AI in call centers and within the developer ranks. One pilot under way in the call center, for example, “enables agents to search faster through large amounts of documents and various data types to better classify identifying patterns in call center data segmentation, and sentiment analysis,” Musser says.

Ford’s Office 365 workforce and developers are also actively using Microsoft Copilot in production, he says, adding that, while human developers must still ensure accuracy and quality control of algorithm development, the Copilots have demonstrated value.

“Copilot tools help save you minutes in writing test-case boilerplate code with anywhere from 20% to 40% in assistance predicting what piece of code is necessary to write functions,” Musser says. “Trust me, we’ve seen productivity improvements in development.”

As AI continues to advance, it’s not clear what future technologies will be embedded in software-defined vehicles, but what is evident, Musser says, is that the innovations used to make internal processes at Ford more efficient and profitable will also be intricately embedded with the vehicles sold to customers.

After all, that’s long been considered a key recipe for high-tech company success.

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