Volkswagen and Microsoft to develop dedicated automotive industry clouds

Volkswagen and Microsoft will collaborate to develop the ‘Volkswagen Automotive Cloud’, one of the largest dedicated automotive industry clouds for all future Volkswagen digital services and mobility offerings.

As per the strategic agreement, Volkswagen is taking a decisive step in its digital transformation into a mobility provider with a fully connected vehicle fleet and the digital ecosystem “Volkswagen We”. As per Dr Herbert Diess, CEO of Volkswagen, the strategic partnership with Microsoft will ‘turbocharge’ their digital transformation.  Satya Nadella, CEO of Microsoft said, “Volkswagen is harnessing technology to digitally transform and deliver innovative new connected car services to its customers.”

Volkswagen and Microsoft will co-develop the Volkswagen Automotive Cloud

From 2020 onwards, more than 5 million new Volkswagen-brand vehicles per year is reportedly going to be fully connected and will be part of the Internet of Things (IoT) in the cloud. The two companies will lay the foundation for combining the global cloud expertise of Microsoft with the experience of Volkswagen as an automaker with a global market presence. The two companies will develop the technological basis for a comprehensive industrial automotive cloud. In the future, all in-car services for vehicles of the core Volkswagen brand as well as the Group-wide cloud-based platform (also known as One Digital Platform, ODP) will be built on Microsoft’s Azure cloud platform and services as well as Azure IoT Edge. This will streamline the technical landscape. Through the Volkswagen Automotive Cloud, Volkswagen will considerably optimise the interconnection of vehicle, cloud-based platform and customer-centric services for all brands, such as the ‘Volkswagen We’ ecosystem. Furthermore, through the dedicated cloud solution, Volkswagen will be able to leverage consistent mobility services across its entire portfolio and provide new services and solutions such as in-car consumer experiences, telematics, and securely connect data between the car and the cloud.

As part of the new entity, Volkswagen will establish a new automotive cloud development office in North America near Microsoft’s headquarters. Microsoft will provide hands-on support to Volkswagen as it ramps up its new automotive cloud development office, including resources to help drive hiring, human resources management and consulting services. The workforce is expected to grow to about 300 engineers in the near future.

Volkswagen will build all in-car services for vehicles of the core Volkswagen brand as well as the Group-wide cloud-based platform (also known as One Digital Platform, ODP) on Microsoft technology. 

Beyond the technological rationale of the partnership, Microsoft will provide access to cloud expertise across Volkswagen. This way the German automotive giant could nurture developers and engineers can benefit and learn from Microsoft’s strong culture of collaboration and agility and can transfer those experiences into the core Volkswagen organisation. It is being claimed that in the future, Volkswagen’s fleet of cars will become mobile ‘internet of things’ hubs linked by Microsoft Azure.