BMW and Volkswagen are relying on both Amazon and Microsoft, and it's proof that the cloud market is more complicated than you think (AMZN, MSFT)


Satya Nadella and Jeff Bezos

  • Last week, Microsoft announced a cloud partnership with BMW. The week before that, Amazon Web Services announced a partnership with Volkswagen.
  • Both companies are working to build services for automotive manufacturing.
  • The funny part: AWS previously partnered with BMW, and Microsoft had partnered with Volkswagen.
  • Analysts say it’s a sign that more companies are choosing to use multiple clouds.
  • Visit Business Insider’s homepage for more stories.

The cloud wars are starting to rumble into the automotive-manufacturing industry — a sign that even car companies view cloud computing as a critical part of their business.

Last week, Microsoft announced a partnership with BMW to create the Open Manufacturing Platform, built on Microsoft’s cloud, to help manufacturers with production and logistics by helping them manage robots and other industrial machinery.

And the week before that, Amazon Web Services said it was partnering with Volkswagen to build the Volkswagen Industrial Cloud, a bespoke platform to help with auto manufacturing and logistics.

Microsoft and AWS have partnered with automotive companies in the past, though those deals were more focused on connected car services like mapping or roadside assistance. These new announcements focus on manufacturing, a field that experts say is a big opportunity for the cloud providers.

“It’s really interesting to see all the big automotive providers heading in this direction, and all the cloud providers have compelling offerings to give them,” Paul Miller, a senior analyst at Forrester, told Business Insider. “We are seeing adoption across the board.”

It’s also a sign that the cloud market is starting to mature, because the products are becoming more industry-specific, said Ed Anderson, a research vice president and distinguished analyst at Gartner.

“It’s the combination of how do you instrument, automate, and manage, and build automation and intelligence into your thought processes and connect to the cloud?” Anderson told Business Insider. “That’s what I thought was interesting.”

A multi-cloud approach

Both analysts said these announcements also pointed to more companies using multiple clouds.

For example, AWS had partnered with BMW to give drivers updated map information, and Microsoft had partnered with Volkswagen to develop software for drivers to listen to music, make calls, and more from their vehicle. Now both car companies are choosing a different vendor to power their manufacturing platforms.

“It’s about a multi-cloud approach — not putting all your eggs in one basket,” Anderson said. “I do think that multi-cloud factor weights into these decisions on who they partner with.”

Anderson said that similar dynamics were at play in retail, and now that it’s hitting the auto industry, expect other players like Google and Alibaba to get in the game as well.

Read more: Here’s why Walmart is betting on Microsoft’s AI to challenge Amazon in online and physical retail

“You’re going to see more competition there and more tit-for-tat,” Anderson said.

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