Suat Kusefoglu of Capgemini

0:00 Introduction

Today in Garage, we’re recording live from AutoTech Detroit. And our guest today is Suat Kusefoglu from Capgemini. Capgemini is a major worldwide system integrator and a key leader in the automotive space. In today’s episode, we talk about the importance of the evolving system architecture as SDVs get deployed. We talk about learnings from the Chinese automakers and what worldwide automakers can learn from that, and also the importance of maintaining a balance between differentiation and standardization and vehicle architecture. It’s a wide-ranging conversation. I’m sure you’ll enjoy.

Let’s go!

0:48 Meet Suat Kusefoglu

Welcome to The Garage. I’m John Heinlein, Chief Marketing Officer with Sonatus. We’re recording a live at AutoTech Detroit. You can hear the noise from the conference all around us, but we have so many exciting guests here at the show. And our guest in this episode is Suat Kusefoglu from Capgemini.

Suat, welcome to the garage.

Thank you for having me.

Tell us a little bit about you and your background.

Yep. So I’ve, worn multiple hats over the years. I have roughly twenty years experience, working at OEMs, also tool vendors and, and engineering services providers.

My foundation is in EE architecture, systems engineering, software architecture as well. And I’ve recently moved more into leadership types of roles, more advisory on the shift to software defined vehicles, trying to help find the right balance in in cost complexity and finding the right solutions with partners, like yourselves.

Fantastic. Where are you based out of?

I’m based in, Novi, Michigan.

Okay. Oh, local so you’re a local boy. Oh, that’s fantastic.

I’ve been this from here.

That’s right. So you gotta tell us a fun fact about you. We like to get to know our guests.

Yeah. So slightly, nerdy fact about myself. So I have this obsession of memorizing, you know, album titles and, and and band members and record labels and, and such.

Yeah. It’s kinda like my my brain decided on what kind of metadata it wanted to, store.

And, yeah, quite quite So you so you just love to learn about different different bands and the let’s see that.

What can I say? I always like to have a fun fact to match our guests. I’m a big language buff. I’m always learning languages.

So I’m constantly doing, like, flashcards of different languages. My current language of focus is Spanish. Wow. And I speak French pretty well and a few other languages. But, currently, I’m doing Spanish.

So that’s my there’s my fun fact fact to you.

That’s great.

2:32 Overview of Capgemini’s Role in Automotive

So tell us about Capgemini, both in general for our listeners who may not know your company. It’s a very successful company. Yeah. And also, both what you do for them and and what do they do in this space.

Yep. So Capgemini is a large organization working across, many different sectors.

It’s roughly, it’s over three hundred thousand employees globally.

We work with clients both on-site and and near shore models.

I work specifically in the automotive sector focusing on on the software defined vehicle, working across the entire stack, from architecture design to software integration and then also helping clients find the right partners, for specific solutions.

That’s great. And, it’s a huge company, Capgemini. I’ve worked with them for years, incredibly smart folks that are there. What kinds of projects do you get involved in?

So I I focus specifically on, cross functional and cross domain, activities trying to help really, find innovative ways to transition from, distributed architectures to domain and zonal, also from, signal based systems to service oriented. Right?

It’s a very complex, task to achieve. Right? There’s a lot of, moving parts. Right? And, getting right getting it right is is really a challenge.

3:55 Shifts in Software defined Vehicle Architecture

That’s right. We talk about so many of those topics here in the Garage podcast, software, the evolution of vehicle architecture, and so on. So maybe for our first topic, you know, you and I both have a background in electrical engineering and in system design. Tell us about how you’re seeing SDV, the architecture of SDV is changing and some of the both the challenges and the benefits of those changes.

Yeah so we’re seeing a fundamental shift in how things are designed right so it’s moving from a discrete ECU to dedicated purpose tightly coupled software and hardware solutions provided by tier OEMs and and then integrated by those OEMs, to more, to less boxes in the in the in the vehicle. Right?

More complexity and managing, tier ones that might provide, off the shelf software solutions. So the challenge is really, managing all of the complexity around, contractual, agreements, right, between different companies, and then also finding a right the right balance of how to find the right software solutions, right, and integrate all of those. So we’re moving from, a finite set of tier ones that need to be managed, right, to maybe hundred and a hundred plus, suppliers providing small bits of accelerator software or full solutions that need to be integrated into a box that comes from a different type of tier one.

That’s a really interesting shift because as you as you pointed out initially and and classically, there was a hardware box, there was a software load that went with it, they were put together at at, manufacturing time and many cases never updated. That’s changing a lot now. You have a a fewer boxes with workloads side by side like they are in the data center, like they are in a phone. And that opens up the opportunity for more more vendors and more, you know, complexity, but but also opportunities in software. Yeah. So that evolution of how hardware and software is being integrated in a new way brings new opportunities to evolve the relationships between OEMs and tier ones. How are you seeing that relationship change?

5:59 Changing Relationships Between OEMs and Tier 1s

Yeah. So as we discussed previously, it was more of a straightforward relationship right between tier ones and OEMs. You would buy a box, you would integrate it, you would test it, validate it, and and and produce it, right, in scale. In the future, I there’s going to be more, more moving parts to manage.

Right. Right? I find that the relationships are now changing after being kind of at a standstill. Right?

So people didn’t really know how to navigate around, recovering some, investments that they had made. So, you know, to develop an ECU cost fifty plus million dollars. Right? You have to set up manufacturing facilities.

You have R&D nwork. You have chips that you source. There’s all sorts of work that the tier ones, had to do to produce a product. And then overnight, OEMs changed their mind.

Right? They wanted to, source, hardware separately from the software, and it took some time for us to kind of work through, how to decouple, that that software. But we see now, there’s a bunch of announcements that that we’ve seen recently where software is now decoupled from from hardware. Right?

So that, software as a product is something that you can purchase as an OEMs, but then the complexity around that is then finding how to integrate all of that together, and then test that in a virtual type of environment, and yeah, try o find that that right balance. Right?

That’s where I try to also position Capgemini as a software expert.

So it’s going to take some time for OEMs to figure out how to operate as a as a tech company. Right?

And that’s where engineering services providers are perfectly positioned. Right? Because we have the experience of doing this already. Right? We’ve been doing this for years.

So we’re seeing, you know, a lot of movement in the industry where, we’re being approached — engineering services as a whole, right — are being approached, to kind of help bridge the next, you know, whatever it is, five years, ten years, to do that work on behalf of the OEMs while they kind of not stand by and watch, but they learn and then start to take bits and pieces over to do themselves. Right?

It’s a journey. Obviously, OEMs are interested in taking a more active role in their software. But it doesn’t happen overnight. And I think the learning of the past couple of years has been that it it is good to be more involved. It is good to be more aware of that. But, it can be a stepwise process.

Yeah. For sure.

8:30 Learning from Chinese OEMs

Yeah. Yeah. I I you mentioned that this evolving, landscape. I think we would be remiss if we didn’t observe that the landscape’s also evolving incredibly fast in China as well. Chinese OEMs are doing incredibly innovative work. The design cycle’s faster. They’re coming out with really incredible technology.

What are the some of the opportunities to to learn from China and some of the challenges? What do you see?

So I think there’s there’s a couple different things here.

So the one thing is, you know, decisive leadership, right? So, fail fast approaches. Right? So, launching a product onto the market, not knowing exactly what how all of the pieces of software are coming together, but having fundamental technologies like over-the-air updates to where you can quickly, bring those pieces of software up to speed for for production. And also with with that decisive leadership, right, there there’s there’s no opportunity for things to get stuck in, building a general consensus for, and and and in the middle management. Right? So it’s more of a, you know, here’s the direction that we’re going to be moving in and everybody executes as opposed to finding more of a democratic way as we currently employ in the West.

Well, it’s a couple different parts of that. Let’s pull that apart. One is my observation is I think the Chinese OEMs are looking really carefully at the user, at the driver, and saying, what do the drivers expect based on, for example, what they’re seeing with their other digital device or phones and other things like that? And and it feels to me — my perception, I’d be curious if you agree — is that they’re delivering technology that’s much more like other consumer devices into vehicles in a more aggressive, more proactive way than other is that your take as well?

Yeah. Absolutely. I mean, you see that kind of in everyday life in China as well. So, there’s a lot more convenience as you go about your day. It could be Alipay or, you know, WeChat or, you know, any similar type of technology.

So I think the the consumers themselves are more demanding. Right? And so they kind of expect a vehicle that they buy, either develops with new features over time, and that’s something that’s quite surprising, especially for, the the US market. Right? We we also like shiny things. Right? And, and and Tesla really brought that, right, years ago.

And so I’m quite shocked to see that, we’re still here all of these years later with traditional, and incumbent OEMs. But, I think the yeah, this this will change.

Your sense from the market is that the rest of the world is gonna evolve to have those similar kinds of demands? Absolutely. As a driver, as a consumer.

Yeah. Absolutely. Yeah.

That’s my that’s my personal take as well. Yeah. I’m watching that space closely. Yes. So on that second point you mentioned about, the learning from China is Chinese tend to have a more top down approach versus Western OEMs that might have a more consensus based approach to their development.

What are some of the learnings that OEMs can take away from the Chinese approach?

I think, also not not moving so finding the right speed. Right? We we we have talked a lot about the China speed. What is China speed? Right? It’s a perfect balance of hardware and software solutions, right, that are meeting what the the market demands.

And what I’m seeing with the Chinese is that they’re they’re not moving to full SDV solutions immediately. Right? So a a lot of Western OEMs are looking at, centralized computing, HPCs, Zonal controllers, while the the Chinese have, you know, they have, fully capable domain ECUs paired together with centralized computing, but there’s only one computer. Right? So that’s the way that they can kind of balance, cost while also meeting market demands.

And I think it’s going to be a slow but gradual, evolution for them, right, to then eventually move to what we see as zonal architectures with zone ECUs and, all of this kind of stuff. Yep.

So it’s really a journey. The the evolution of vehicle, vehicle EE architectures is not a single direction. It’s not everyone is going exactly a certain way. There’s a lot of exploration. There’s a lot of differences. And, but what you’re saying is there there’s they’re really being willing to try new things and evolve.

Yep. And I think one one thing that’s really, fundamental for this is that they have they’re they’ve already achieved, different relationships with their tier one suppliers. So when they saw when they source a box, the software is already white boxed to them. Right?

So they are able to really understand what’s in there. They’re able to develop upon that software, and that is also allowing them to then move software. Right? As they want to progress their EE architecture, introduce additional ECUs, move things around, that’s going to allow them to, to achieve that much easier, right, without any pain points.

13:32 Advice for starting SDV Projects

Well, so if we pull back to the worldwide OEMs, we we’ve talked in a couple different ways about, the evolving architecture. What about the, organizations in in OEMs? What’s your advice based on your you’re talking to many different companies. What’s your advice for how OEMs could kick off an SDV project?

Yeah. So I think, we’ve actually seen a lot of, great organizational changes already, big, on the back of, electrical vehicle development. Those models were were great, right? They didn’t work for for other reasons more from the market perspective, right?

But I think a similar approach where you can kind of have a, you know, small tugboat size, organization, right, that with a bunch of heavy hitters, people that really understand all the technologies, through and through, able to really develop that first SDV, right, and then get that learning into the company and then use that to then drive organizational changes further. Right? So there are certain parts that don’t need to change. Right?

Mechanical parts are always gonna stay mechanical, but then from the the software reorganization, right, I think small targeted expert teams are really the key.

So it’s really a cultural shift, really, of changing away from, a very verticalized silos, stay out of my silo approach to really thinking about design in a in a different way.

We’ve seen that in other industries, in data centers, in in in computing, other parts of computing. We need to bring that kind of different thinking into automotive.

Yep. So previously, you know, you would have people that were responsible for one little screw, and you, you know, they weren’t weren’t able to even work outside of that, that that box. Right? And I think really cross -systems thinking, almost turning the responsibility of teams ninety degrees, right, instead of a vertical approach.

It’s more of a horizontal. Right? Assembling teams that have mixed skills, so it could be IT skills, it could be people, with finance backgrounds, right, payment systems and all this kind of stuff paired together with engineers that understand how a feature works and data flows work, across an entire system. Yeah.

I think it’s a different mindset and more of a holistic systems approach where, yes, there’s division of subsystems because even in traditional computing and phones and data centers, there’s obviously lots of division of labor. There’s lots of walls that prevent apps and compute from messing with other compute. But there’s also the realization that those other things are there and thinking about it in a holistic way. That’s, I think, the difference. So as these vehicles

16:19 Differentiation Strategies for OEMs

evolve, SDVs provide new ways for OEMs to differentiate.

So, tell me about your opinion of how they should be differentiated and where in the compute stack should the differentiation happen?

Yeah. So, yeah, great, topic. I love this topic.

So we’ve been having a lot of discussions on this, right, for many years, right? You’d have, OEMs go to conferences and say, you know, we need to collaborate, on things like middlewares, OEMs, different commodity, items. Right? And then everybody would go back off and invest hundreds of millions of dollars in their own solution. Right?

And I think that it was kind of this similar to, AD. Right?

A lot of people wanted to be first to market, without recognizing all of the challenges, right, that we’re going Autonomous driving.

Yeah.

Exactly. Yeah. I mean, both autonomous, but also, middleware development programs. We we we saw a lot of, issues there.

I think that over time, the the all the entire software stack kind of, middleware downwards, right, can be and should be commoditized, right? So anything that the customer doesn’t see, they don’t really care about. They don’t know that it’s there. And I think that if companies come together and co invest, there’s a lot of cost savings to be had, right, which can then maximize investments in other areas, right?

Differentiating products in digital services offerings and unique experiences across different types of, products there. One thing that I’m happy to to report is that you see this already today in the commercial vehicles, industry. Right?

I find that they kind of they’re taking all of the right learnings from passenger car and applying that in their own, industry, partially driven because they have smaller and tighter budgets to work with.

Right.

But really, it’s the right way, regardless of what your budgets are. Right? I think it’s really, the collaborative approach, open source software, and really commoditizing, the middleware downward, layers.

Yeah. So this the idea from a passenger perspective, the ability to differentiate a particular vehicle model or a vehicle family, whatever, to provide an experience that’s unique to your brand. I mean, you see, you know, many different brands who have a very different user experience, a different UI.

Even my wife and I have cars that are very different, and I won’t name the names, but very different user experiences. And she’s very happy with hers, and I’m very happy with mine. But then you mentioned commercial as well. Commercial, obviously, they are much more diverse fleets.

You can have fleets that are carrying cargo, that are carrying passenger, carrying cold chain. They have to keep things cold. And there are there are very specific vertical market differentiating needs there to serve those unique needs as well as large large vehicles and smaller vehicles. So it’s really I think it’s a valuable point you make that there’s there’s lower levels that are non differentiating, provide those in a common way, but then still retain valuable differentiation for the OEMs and tier ones?

19:18 Cost Considerations in Vehicle Development

You know, with SDV, a lot of times, the perception is SDVs are for high end vehicles. And indeed, some of the initial SDVs have tended to be higher end vehicles where the first innovation is happening.

But then naturally, I think it it can move down into a wider range of vehicles as well. I’d love to hear your perspective on the applicability of SDVs across the price points.

Yeah. I mean, I think, you know, we can touch on this in in two different ways. Right? So, specifically in the commercial vehicle space, right, you have, light, medium, and heavy duty vehicles.

Also in the passenger car space, you have entry level vehicles all the way up to the full singing, dancing, large vehicles. Right? Today, that’s a difference between maybe, I don’t know, six and a hundred ECUs. Right? So, if you look at that from the SDV perspective, I think it’s it’s important to find a minimum set of hardware that’s needed to, deliver a certain feature experience and and feature content.

But I think that, you know, if you compare that approach, right, with partnering with people, commoditizing architectures, increasing piece purchases, right, so that that lowers piece cost, you’re able to then, find ways of delivering more expensive single pieces of hardware into cheaper vehicles. Right? So another idea, that that I’ve been discussing with a lot of people is to have, you know, one single piece of hardware with, firmware limited processing power. Right? Instead of having different across the chip suite, instead of having a physically different processor in there, you could have the same processor that’s firmware limited, and then try to find a way of paying for processing power as and when you need that right as feature content grows as the market demands additional features you can then find agreements with either silicon silicon vendors either via the tier one or directly with them, to then pay pay per per use. Yeah.

A couple of different points, of what you made is really interesting. One is there there’s a a singular focus, I think, on BOM cost, when the reality is also validation cost and and development cost is a huge, huge investment, a massive investment for new vehicle models. So if one if a company was able to take a common platform, that can scale across high end vehicles, medium vehicles, low end vehicles, then some of those development costs, which are significant, can be reused.

Validation costs — validation is also a huge component — can be reused. So that’s the first point. And then the second point you made, which is really interesting, is today, a lot of times chips are, you know, fuse-burned to be a specific model or SKU as we call it in the industry.

But there’s an appetite and there’s an interest in having scalable systems that can add capabilities over time, that can have subscriptions over time. And so I think the industry is still learning how to get through that approach of having more scalable OEMs, knowing that it might not be using the full capabilities at the beginning, but that there’s headroom to grow. And it may benefit everyone, including the silicon suppliers who may have fewer, SKUs to sell. Yeah. Which potentially could be beneficial, and for the OEMs, fewer boxes they have on the shelf that are more scalable across their product line.

22:41 Forecasting Future Processing Needs

I think the challenge for for them is going to be estimating, you know, over the lifetime of a vehicle, what is the the maximum amount of processing processing power that, can be requested by the OEM. Right. So forecasting, you know, ten years in the future is a challenging thing.

It’s challenging. Yeah. We just recently released the results of the 2025 SDV survey we carried out with Wards Intelligence, actually one of the, key partners of Wards Auto. So, it was interesting to see how much headroom OEMs were willing to put in their vehicles.

And it definitely varied. Higher end vehicles were willing to put in more headroom. But even in lower end vehicles, we saw an appetite to include headroom in vehicles recognizing that there’s a need to scale over time. So it’s an interesting challenge, and I think it’s gonna be an interesting topic to watch for in the future.

As people are paying for more pay-as-you-go and more subscription services, I think there’ll be more of an appetite to put in headroom into these vehicles. Well, look, Suat,

23:37 Conclusion

it’s been so wonderful to have you on the podcast. You’re you’re such a thoughtful leader. You work with companies of many different types, so it was exciting to have you on.

I’ve been working with Capgemini for years, and so thank you for being with us today.

Thanks again.

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