Volkswagen drives the automotive industry cloud forward

For some enterprises, the road to industry cloud is an evolution from previously adopted solutions. A Microsoft shop, for instance, may find it easier to move to one of Microsoft’s wide range of industry-specific clouds. St. Luke’s Health Network, for example, opted to use Microsoft Cloud for Healthcare for its integration, given the nonprofit network’s existing use of several Microsoft products at its 300 locations in New Jersey and Pennsylvania.

For Autodesk customer Cube 3, the possibility of leveraging Forma, the CAD software maker’s first industry cloud, would enable it to simplify and customize its digital transformation specifically for its vertical needs.

“We pride ourselves on creative, intelligent designs that take our clients’ needs, budgets, and the environment into consideration,” says Cube 3 CIO Tony Fiorillo. “Solutions like Autodesk Construction Cloud and Forma are a huge value-add — giving us unprecedented access to data, which allows us to work smarter and go where our clients need us.”

As they evolve, industry clouds may become the de facto choice for many enterprises, analysts note. In one recent Gartner survey of enterprises in the US and Europe, almost 40% had begun to adopt industry cloud platforms, with another 15% in pilot mode. Gartner claims that by 2027, enterprises will employ industry clouds to “accelerate more than 50% of their critical business initiatives,” compared to fewer than 10% in 2021.

Going vertical

Still, enterprises that opt to build a more revolutionary industry cloud to reinvent or extend their core business model will benefit most from the model, Accenture’s Skyrme says.

“Industry cloud is about using the cloud to reinvent or disrupt industry business models and norms. It’s using the full power of cloud to differentiate — not just digitize,” she says, pointing to Volkswagen and Siam Commercial Bank as examples of enterprises that have taken the most aggressive approach.

Siam Commercial Bank’s industry cloud efforts have paved the way to expanding the 104-year-old bank’s business model “from a commercial bank to a leading fintech group in the region. It’s rewiring their value chain,” says Skyrme, who sees differentiation and driving growth as “the Holy Grail of industry cloud.”

“That’s when you’re starting to think about new products, new platforms, new experiences, your cloud-native strategy, or thinking about co-creating with [the cloud] hyperscaler as a partner and maybe even other people in your industry to create something new,” she says.

In Volkswagen’s case, partnering with AWS may very well drive new revenue streams as it reinvents core aspects of its business model. Goeller says that VW chose AWS for its automotive cloud but will work with all hypervisors as its multifaceted digital transformation evolves.

“There was definitely a beauty contest and in 2019 we saw AWS as the best selection for us,” says Goeller, who admits that co-creation has its challenges, one of the biggest of which has been melding the two quite different “mindsets” of an automobile manufacturer and a software company.

“The first challenge for us really was to bring the working cultures together,” he says. “AWS learned a lot from us, an older company, such as how to track your targets and measure your costs, and that was something they didn’t know in the beginning. And we learned to be much quicker and more agile.”

Other challenges remain, such as finding talent with an understanding of AI and advanced analytics. “We have to compete for that talent,” he notes.

To date, the two behemoths have made considerable progress in redesigning the automobile factories and expect to continue advancing the benefits as AI, computer vision, and robotics technologies advance.

“We have both learned a lot in the last three to four years and we have a plan for the next few years to understand what kinds of new solutions will be needed in out factories,” Goeller says.