Digital marketplaces are now in vogue as a place to bring business buyers and sellers together to research and purchase physical goods.

But Volkswagen AG, Europe’s biggest automotive manufacturer and the maker of VW, Audi and other vehicles, also sees a digital marketplace as an ideal way to bring together buyers and sellers of software applications and move the entire process of digital manufacturing even further into the mainstream.

Volkswagen, in conjunction with Amazon Web Services, the cloud computing arm of Amazon.com Inc., is building what it bills as the “ultimate app store” for industrial software applications. The store will make available from multiple automotive industry suppliers software apps designed to increase speed and efficiency in developing parts and manufacturing vehicles at the car maker’s 61 production plants and factories around the world.

Gathering an international army of suppliers

Volkswagen envision its “industrial cloud” app store concept as a better and more digital way for its international army of parts suppliers to connect online with Volkswagen plants, contribute their own software applications, and expedite manufacturing. “We are creating a platform allowing partners to contribute their solutions and help the Volkswagen Group achieve global efficiencies at its plants,” says Volkswagen executive vice president of new business development Nihar Patel. “At the same time, we are creating the pathway for partners to scale their applications and optimize their own operations.”

Driving toward a new industrial marketplace

Ultimately, Volkswagen also sees its new industrial cloud app store spawning a digital marketplace where parts suppliers will interact directly with one other and with Volkswagen. “Volkswagen and AWS see the development of the industrial cloud into an open partner network as a key step and intend to further intensify the app store approach,” Volkswagen says. “In the long term, the partners aim to create a marketplace for industrial applications.”

Volkswagen, which does business with more than 8,500 primary, or tier one, parts suppliers, has yet to provide much detail on full plans for a rollout of its digital marketplace, including rollout in the U.S., where the company has a major manufacturing facility in Chattanooga, Tenn. “Development of the technological basis for this marketplace is already in progress,” Volkswagen says. “All participants would then be able to exchange their applications with each other, to acquire applications, and to use them irrespective of any links to Volkswagen.”

Under the first phase of its industrial cloud app store development process, Volkswagen will work with Amazon Web Services to develop the project’s technology infrastructure. In the process, VW will use Amazon’s cloud computing development platform to build applications using the Internet of Things (IoT), machine learning, data analytics, and computing services “specifically to meet the requirements of Volkswagen and the automotive industry,” Volkswagen says.

Volkswagen also announced that it and Amazon Web Services will work with Siemens AG on data systems integration and that 11 big international companies—ABB Group, ASCon Systems GmbH, BearingPoint Europe Holdings BV, Celonis GmbH, Dürr AG, GROB-WERKE GmbH, NavVis, SYNAOS GmbH, Teradata Corp., WAGO Kontakttechnik GmbH, and MHP, a unit of Porsche MHP—will serve as initial app developers.

Optimizing industrial production via the cloud

“New partner companies will be able to connect with Volkswagen plants and to contribute their own software applications for optimizing production processes to the industrial cloud,” Volkswagen says. “This way, a rapidly growing range of industrial software applications for Volkswagen’s plants will be created—each location will be able to obtain applications for its machinery, tools and equipment direct from the industrial cloud to optimize production.”

Volkswagen, which built and delivered 10,956 vehicles in 2019 and generated total annual sales of 252.60 billion euros (U.S. $297.48 billion),  has yet to say what the development timeline is for when its industrial app store and marketplace will be fully up and running—or what it will cost to build it.

But the automaker is clear on the results it wants: better manufacturing activity. “Volkswagen plants will be able to use a growing range of software applications, and this will boost the development of the industrial cloud as a whole,” the company says. “The Volkswagen Group will be able to take account of the diverse structure of its plants at the same time as avoiding the need for inefficient in-house development of specialized applications.”

This article will also appear in a forthcoming Digital Commerce 360 B2B special report on B2B marketplaces.

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