Dive Brief:

• Amazon Web Services and Volkswagen Group (VW) entered a multi-year global agreement to create the Volkswagen Industrial Cloud, according to a company announcement Wednesday. The Volkswagen Industrial Cloud is "a cloud-based digital production platform" used to streamline VW's manufacturing and logistics processes.
• VW plans to use AWS' internet of things, machine learning, analytics and computing solutions for plant assembly efficiency, vehicle quality and production flexibility. Data will be pulled from 122 of Volkswagen's manufacturing plants.
• VW has a companywide data lake, available on Amazon S3, for data analysis, according to the announcement. The automotive company will also use Amazon SageMaker for data scientists to build, train and deploy ML models for plant machinery and operations.

Dive Insight:

It's common for companies to spread their cloud budgets among providers and prior to VW's cloud announcements, the company was using Microsoft and AWS for its production workloads, according to Paul Miller, senior analyst, Forrester, in an email to CIO Dive. 

The partnership with Microsoft is geared toward the driver experience from "the moment they enter, use, and leave their vehicles," according to the October announcement. Cloud computing is at the core of both partnerships, but the use cases vary.

"VW was also an early adopter of the open source OpenStack cloud, inside its own data centers," said Miller. Using multiple clouds for different workloads will remain a common practice for most companies.

But "the manufacturing and logistics processes to be addressed by the Industrial Cloud extend far beyond simply building and running the applications that might normally be hosted with a public cloud provider like AWS," said Miller.

The tools that exist inside these solutions providers, like IoT, ML and edge computing, are heating up the competition between companies like Microsoft and AWS.

Having effective industrial IoT platform offerings "that extend all the way from sensors on the factory floor to analytics, dashboards, and applications in the boardroom" will become the sweet spot for vendors and potential customers, said Miller.