Google announced that it has signed a six-year deal with Ford Motors that will bring Android technology to the automaker’s cars as well as cloud services to its factory floor starting in 2023. Employees from Google and Ford will be part of a group called Team UpShift, which will use Google’s services and data expertise to better streamline Ford’s operations and create a more seamless experience for customers.
This means that starting in 2023, millions of Ford and Lincoln vehicles at all price points will be powered by Android, with Google apps and services built in. Ford said this will save the company millions of dollars since it will no longer be handling this in-house.
For Google, analysts say the deal provides the tech giant with a high-profile customer for its cloud services, helping it gain market share from segment leaders AWS and Microsoft. Ford was previously a longtime client of Microsoft and Google will need to continue accumulating these types of customer wins to catch the two cloud market leaders.
Some speculate that the new deal was made in response to or in competition with Apple’s recent partnership with Hyundai. The two companies are rumored to have penned a deal to potentially release an electric car in the United States sometime in the next few years.
The deal comes as part of Ford’s $11 billion restructuring plan to streamline internal operations (including using artificial intelligence to improve supply chain logistics and manufacturing) and provides Google with a big-name customer to compete against rivals Amazon and Microsoft, particularly in the growing automotive software industry.
David McClelland, Ford’s Vice President of Strategy and Partnerships, said the automaker believes Google could help it address a broader collection of challenges and opportunities.
“We’ve had a great relationship with Microsoft,” McClelland said. “They helped us with Sync. They will continue to help us in the near term. We’re creating this much more comprehensive relationship with Google.” Whereas Microsoft’s relationship with Ford was transactional in nature, Google will act as more of a partner to further advance the company in these strategic areas.
The companies did not disclose the value of the deal, but Google will receive revenue from cloud services as well as a Google apps and services licensing fee for every Ford and Lincoln vehicle sold starting in 2023.
