The automotive industry has, in recent years, been demonstrating to the rest of the world how the innovative application of IT can greatly enhance the value of the products a company offers to its customers. Giants such as Ford and General Motors, which were in deep trouble a few years ago at the height of the global economic crisis, are now turning their businesses around thanks in part to the innovative use of in-car IT.

Ford’s SYNC and GM’s OnStar allow owners to connect smartphones to their car and treat the vehicle as an extension of their online mobile world. As a result, these previously unfashionable brands are now producing vehicles with a stronger appeal to a younger generation of tech-savvy consumers.

And now one of the other strongest trends in IT is being applied to the automotive industry in a similarly innovative way, since Toyota, the world’s biggest car manufacturer, announced a cloud-based partnership with Microsoft.

Their plan, launched in April, is to jointly invest in a platform, based on Microsoft’s Windows Azure infrastructure-as-a-service offering, to support next-generation telematics in Toyota’s forthcoming electric vehicles (EVs). This may sound a little esoteric to many outside of the automotive industry, but the implications are potentially enormous.

Telematics, defined simply as the fusing of telecommunications and information technologies in vehicles, is one of the hottest areas of innovation in the automotive industry, as it allows cars and their manufacturers to stay connected and mutually benefit from the data shared between them.

One of the first areas the Toyota-Microsoft partnership plans to work on is remote energy management for Toyota’s new EVs. This will address a key issue surrounding EV-adoption — ensuring the battery doesn’t go flat away from the home — by informing owners when their cars will need recharging, how long for, and when the cheapest time to plug into the electricity grid will be, then programming recharges to happen at optimum times (typically at night) without requiring the owner’s presence.

To achieve this, data streams from the vehicle and utility companies will need to be combined — which is most easily done in the cloud. A range of other applications and features, such as enhanced navigation and multimedia services, will also be developed.

This link-up between two giants of their respective industries ought to alert CIOs to two interconnected points. First, that it’s possible — essential, even — to rethink every industry in the light of cutting-edge IT. As Akio Toyoda, president and CEO of Toyota Motor Corporation, stressed at the announcement of the partnership with Microsoft: “We will boost the value of automobiles by making them ‘information terminals.’”

Second, it highlights that cloud computing will be an essential tool for delivering this kind of innovation. It remains to be seen when other industries will make a similar leap.