Volkswagen partners with Microsoft on connected car platform

Your next Bug might have Windows as a feature — Volkswagen and Microsoft are partnering to create cloud services for VW’s entire fleet, the companies announced on Friday, .

VW anticipates that starting in 2020, more than 5 million new Volkswagen-brand vehicles per year “will be fully connected and will be part of the Internet of Things (IoT).”

VW’s board of directors approved the agreement between the two companies to create the Volkswagen Automotive Cloud, which will be based on Microsoft’s Azure enterprise-grade cloud platform and Azure IoT Edge.

The Volkswagen Automotive Cloud will facilitate the development of new in-car consumer services, telematics, and secure data connections between cars and the cloud, the announcement said. It will power all of VW’s brands, including Audi, Porsche, Lamborghini, Bentley, Seat, Skoda, Bugatti, and Ducati.

The work of creating what VW describes as “one of the largest dedicated automotive industry clouds” will largely take place at a new office VW plans to establish near Microsoft’s Redmond, Washington, headquarters. VW expects that the workforce of its North American cloud development office will grow to about 300 engineers “in the near future.” Proximity to the Redmond campus will allow Microsoft to provide assistance for hiring, human resources, and consulting as well as access to its expertise in cloud services and team collaboration.

VW becomes the latest major automaker to announce connected car plans based on Microsoft’s Azure technology. Ford has partnered with Microsoft for several years on technology that delivers over-the-air updates to its Sync in-car entertainment/information systems.

Two years ago, BMW announced its BMW Connected app, which runs on the Azure-based BMW Open Mobility Cloud and delivers driving conditions (e.g. weather, traffic, etc.) and other info to cars in 29 countries. Since then, BMW announced models that enable Office and Exchange services.

The Renault-Nissan Alliance also announced a partnership with Microsoft to create Azure-based connected and self-driving car services.

However, Gartner analyst Michael Ramsey says the VW partnership is more ambitious than these other deals in several respects. Most notably, it’s the first that involves worldwide support: Others do not involve vehicles in every single market. “Microsoft is leveraging its global footprint in data centers to offer a single solution,” Ramsey wrote.

Also, VW’s presence in Redmond means “it’s going to work more closely with Microsoft on software development, learning how to do continuous updates of software,” Ramsey said.

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