VW Partners With Microsoft to Create ‘Volkswagen Automotive Cloud’

Microsoft will help create the German automaker's "Volkswagen Automotive Cloud," which will serve as the backbone for a number of future digital services VW is planning.

To facilitate this, the automaker will establish a new automotive cloud development office near Microsoft's headquarters in Washington state. About 300 engineers will be involved in the development work, Volkswagen said. The Microsoft collaboration will initially focus on the main Volkswagen brand, but will eventually expand to include VW's many other brands as well.

Car connectivity can help enable a variety of business opportunities for Volkswagen, from creating the infrastructure to coordinate ride-hailing and car-sharing services, to beaming advertisements and other content into car infotainment systems. The rise of sharing services and the anticipated arrival of self-driving car tech has left automakers like Volkswagen searching for ways to make money beyond simply selling cars; connectivity allows cars to continue generating revenue long after they leave the factory.

Whether all of this will be good for consumers remains to be seen. Connectivity could make life more convenient for VW customers, but it will also mean cars are no longer just cars. They'll become four-wheeled smartphones, performing a vital function, but also offering lots of distractions.