Amid all of the recent discussion about the ongoing cross-pollination between the auto and tech sectors, particularly around autonomous, connected, electric cars, there's one major tech player that we haven't been hearing much about: Microsoft (NASDAQ:MSFT).
That's not to say that all has been quiet on the Redmond front; Microsoft and automaker Volvo announced a partnership last November to jointly develop autonomous driving technologies, and another similar partnership with Toyota was announced just a couple months ago. But Microsoft probably isn't the first -- or second or even third -- name that comes to mind when you think of self-driving cars.
The software giant recently shined some more light on its self-driving car ambitions.
Speaking at the Converge tech conference in Hong Kong last week, Microsoft business development exec Peggy Johnson made it clear that hardware wouldn't be part of the company's strategy. Johnson said, "We won't be building our own autonomous vehicle but we would like to enable autonomous vehicles and assisted driving as well."
This is in notable contrast to Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL), which will likely be Microsoft's most direct competitor in self-driving cars. Alphabet has been working on self-driving cars for years, which included building prototypes and retrofitting vehicles with LIDAR systems for testing purposes. Just last month, Google announced a partnership with Fiat-Chrysler to develop self-driving minivans, a form factor that lends itself well to ride-sharing applications.
But Google is unlikely interested in building cars in the long term. It simply needs the hardware in order to develop the software. The company will presumably seek to license out its technology to automakers once it's ready for primetime.
On the other hand, Microsoft is exploring ways to apply its strengths in productivity to the car. Johnson noted that people spend an awful lot of time in their cars every day, so there is an opportunity to increase productivity by making the car a type of mobile office -- provided the car can drive itself. Johnson also made it clear that the automakers will do most of the work with the driving technologies, saying that OEMs will be "doing the heavier lift here."
In that case, what exactly is Microsoft bringing to the table?
For now, the Volvo partnership revolves around using Microsoft's augmented reality headset Hololens to give consumers a different and more immersive way to explore a vehicle. The autonomous side will be a "future collaboration." With Toyota, Microsoft is helping the automaker with data management and analytics related to its Toyota Connected mobility services using Microsoft's Azure cloud platform.
Frankly, Microsoft probably shouldn't even bother with trying to work on autonomous driving technologies. Much like its efforts in mobile, Microsoft is simply too far behind to make a meaningful difference, and any attempts to try catching up will likely end up being a waste of resources. Instead, Microsoft should focus primarily on improving productivity and enabling other cloud-based services.
The company is on the right track considering where it's starting, but it should save investors the headache of repeating past mistakes.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Evan Niu, CFA has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A shares) and Alphabet (C shares). The Motley Fool owns shares of Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.