Automotive Software Digital Marketplace Opens, Backed By GM, Suppliers

Aimed at reducing the time and costs of developing software defined vehicles by matching the needs of automakers with software suppliers, SDVerse opened for business Monday.

Created and financiall-backed through a partnership between General Motors Co. and suppliers Magna International and WiPro, it’s the auto industry’s first digital marketplace bringing together car companies and suppliers with software vendors.

“If you think about how they do it today, it takes months for them to find software, to talk to suppliers, to do RFIs (requests for information),” said Prashat Gulati, SDVerse CEO, in an interview. “Our claim is that we will take that months down to minutes. So we’ve done the work with GM and others to identify about 80% time saved in the whole procurement process. That’s the beauty of software, right? Faster development cycles.”

The founding companies were not only looking to save time, but money as well, spent developing software in-house, Gulati explained.

As vehicles become more dependent on software to operate advanced technology, demand is skyrocketing.

“Because of this transition to software defined vehicles the market for automotive software is expected to double in this decade,” said Daniel Nicholson, vice president, strategic technology initiatives at GM during a panel discussion last April.

That outlook is supported by McKinsey & Company, which predicts by 2030, the global automotive software and electronics market is expected to reach $462 billion.

The membership setup is fairly simple. Prospective buyers and software vendors pay a flat fee for access to SDVerse, which takes no transaction fees, according to Gulati.

There are three subscription levels for buyers, dependent on their revenue—less than $100 million, $100 million to $1 billion and more than $1 billion.

“Everything is included— unlimited logins and all your majority owned subsidiaries can join for free within that fee,” Gulati explained.

Once a buyer finds the software it’s seeking, discussions begin with the vendor to request more information and negotiate price.

In addition to the three founding members, ten other companies have joined SDVerse including Forvia, Bosch, Valeo. Cummins and Groupe Renault.

The speed of finding and procuring software was a major incentive to join, said Karin Matthes, chief technical officer and vice president of innovation and technology at Groupe Renault during the April panel discussion.

“The process is very lengthy, and so make versus buy, and then you need you know different suppliers, and a lengthy monthly decision process, and that is contrary to the objective of SDVs to bring quickly and incrementally over life cycle, new value to our vehicles,” explained Matthes.

That sentiment was echoed by Joan Wills, executive director of software & electronics engineering at Cummins Components and Software.

“By leveraging the SDVerse ecosystem, we are expecting to substantially reduce the time and effort required to implement capabilities of connected vehicles and deliver even greater value to our customers,” Wills said in a release announcing the company’s membership on July 24.

Gulati makes it clear, however, SDVerse stops short at matchmaking software buyers and sellers, not closing the deals, explaining, “we are facilitating communication, etcetera. rBut once software is found the companies still go through their own RFQ process, which is where they ask for more details, more clarifications, but we have done a lot of the upfront work for them already. But they still have to go through a legal negotiation process, so that is offline.”

The bottom line, he says, is companies that go it alone on software development are probably spending too much time and money when the solutions they seek may already have been developed by suppliers specializing in them, declaring, “There isn’t enough time, talent and capital in the world to do everything by yourself.”

That’s when it’s time to call in a digital matchmaker.