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

Chip Somodevilla / Staff

Microsoft CEO Satya Nadella and Amazon CEO 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 just the week before, Amazon Web Services partnered with Volkswagen to build the Volkswagen Industrial Cloud, a bespoke platform to help with the automobile manufacturing and logistics processes.

Microsoft and AWS have partnered with automotive companies in the past, although those deals were more focused on connected car services like mapping or roadside assistance. These new announcements are more focused 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, 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 their products are starting to become more industry-specific, says Ed Anderson, 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 cloud," Anderson told Business Insider. "That's what I thought was interesting."

A multi-cloud approach

Both analysts note that these announcements also point to more companies using multiple clouds.

For example, AWS had previously partnered with BMW to give drivers updated map information, and Microsoft had partnered with Volkswagen to develop the 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 says there are similar dynamics at play in the retail space, 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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