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Volkswagen shares rise as it agrees cloud deal with Microsoft for connected cars

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Volkswagen shares are higher Monday, following news Friday the German car maker has agreed a deal with Microsoft, to support its in-car smart services. From 2020, Microsoft’s Azure cloud service will support the online connections of some 5 million vehicles made by the manufacturer, per year.

By 1115 BST, Volkswagen shares were 1.39% in the green at €153.70. The stock has been broadly positive in recent weeks.

Volkswagen select Microsoft Azure

Volkswagen has confirmed its selection of Microsoft Azure’s cloud services, to power its in-car smart systems. The deal is a firm step towards the digital transformation of the group’s vehicles and will see Microsoft Azure help create Automotive Cloud, for its future customers.

“The strategic partnership with Microsoft will turbocharge our digital transformation,” said Dr. Herbert Diess, CEO of Volkswagen AG. “Together, we will play a key role in shaping the future of auto-mobility,” Dr. Diess added.

Microsoft was equally upbeat on the strategic partnership between the two well-known businesses.

“Volkswagen is harnessing technology to digitally transform and deliver innovative new connected car services to its customers,” said Satya Nadella, CEO of Microsoft. “The world’s leading companies run on Azure, and we are thrilled that Volkswagen has chosen Microsoft.”

Fully connected to the cloud

Volkswagen said that in less than two years, this partnership will mean that most of its new vehicles will be fully connected to the cloud, supporting a range of IoT capabilities across its fleet.

That will be achieved as the two firms will together “develop the technological basis for a comprehensive industrial automotive cloud”. This will be done in a new digital headquarters which will be established in North America, close to Microsoft’s existing HQ, VW said.

The Automotive Cloud will then become an intrinsic part of the manufacturing process and afford the future VW fleet, a fully-supported and reliable connection to a variety of smart-car services.

Other VW brands will also benefit from this partnership, with much of the tech being rolled out to its other well-known vehicle manufacturers.

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