Volkswagen and Microsoft have announced a partnership that promises a connected, seamless transition from home to vehicle.
The future of transportation by road is electric and autonomous, but there’s a third, less-discussed facet: connectivity, and the possibilities it unlocks.
Volkwagen is looking to transform the company into a digital services-driven business. Microsoft’s Azure cloud and IoT Edge platform will form the technology foundation for this remodelling.
As a starting point, this includes cloud services such as Azure IoT, PowerBI and Skype to create in-car consumer experiences, telematics, and productivity solutions. This dedicated automotive cloud will be rolled out across Volkswagen’s entire portfolio of brands.
However, the partnership goes beyond the use of Microsoft’s cloud products. Volkswagen will also set up shop close to Microsoft’s headquarters in Redmond, Washington, as it builds its new automotive cloud. Microsoft will provide hands-on support and engineering consulting, as well as contributing business and technical leaders to the new entity.
Commenting on the partnership, Heiko Huettel, head of connected car for the Volkswagen Group, said, “I think this is an industry benchmark in terms of joining forces and putting the best of each company at the table and building the business together.”
The automotive cloud
In Huettel’s view, the collaboration is pivotal; software and associated services will be key to differentiating automakers in the future.
“Simply building great cars will not be enough, and that’s why the Volkswagen Group — and especially its core brand of Volkswagen passenger cars — is investing heavily in electric and autonomous technology,” he said.
But even more, Volkswagen is also speeding up the development of its ecosystem with its own software know-how and the strength of external partners. We envision the automobile evolving into a central hub in the Internet of Things, enabling customers to take their world into their vehicles.
By integrating with Microsoft’s services, VW will be able to allows its customers to seamlessly pick up any music they were listening to, manage their online calendar, or carry out a conference call. While these are seemingly simple tasks, the lack of support between third-party applications makes in-car interactions problematic.
The automaker claims that from 2020 onwards, more than five million new Volkswagen-brand vehicles per year will be fully connected and will be part of the Internet of Things (IoT) in the cloud.
Internet of Business says
VW has revamped its digital strategy in recent months, integrating some operations and acquiring several software companies.
Ultimately, the creation of an automotive cloud is all about gaining greater customer engagement and insight in an industry that typically experiences little post-purchase interaction with its customers.
For the automotive giant to get the most out of the initiative, it will need to offer tools that are of real value to users, and go beyond cool, but short-lived, gimmicks.
VW recognises this. Future applications of predictive maintenance, OTA updates, and other services, will offer genuine benefits and return vital data. As will personalising the experience depending on the driver, using biometrics or personal assistants.
And when the owner’s thoughts turn to home, the ability to easily control IoT-enabled devices such as heating and lighting will appeal to many. The car will become an intuitive extension of our increasingly digital selves.
The value of connected cars becomes clearer when one considers how fully autonomous, level five, vehicles will free motorists up to carry out other activities.
Blockchain could also play a significant part in enabling and securing connected transportation in the future, including payments and data sharing. Its potential was reflected in last week’s expansion of the MOBI blockchain consortium.
Elsewhere, Volkswagen’s digital transformation has recently seen it employ advancements in 3D printing to produce small vehicle parts.