VW relies on Telekom: T-Systems builds global cloud for Volkswagen

Volkswagen is breaking new ground in its digital transformation and relying on European sovereignty for its IT infrastructure. In a major, financially undisclosed deal, the Wolfsburg-based automotive giant has commissioned Deutsche Telekom subsidiary T-Systems to build and operate the so-called “Group Private Cloud 2.0” worldwide. This IT infrastructure is intended to serve as the central nervous system for applications of all group brands – from Audi and Porsche to Skoda and the core VW brand. New IT applications will run directly in this new environment from now on. In the long term, the plan is to migrate a large part of the classic IT landscape to this cloud environment under its own operation.

According to VW IT Director Hauke Stars, the goal behind this step is: to strengthen the automaker's digital resilience through a combination of technology partnerships and its own infrastructure. By processing more data in-house within the European legal sphere, Volkswagen aims to position itself as more economically and technologically independent.

T-Systems CEO Ferri Abolhassan emphasized that digital sovereignty does not have to be expensive. According to the IT service provider, the product base used is not only intended to guarantee independence and high security standards, but is even priced to undercut many public cloud offerings from major US hyperscalers such as AWS, Microsoft Azure, or Google Cloud. In addition, VW will gain direct access to T-Systems' AI infrastructure in Munich to drive industrial AI applications.

Focus on data security and European law

From a technological and strategic perspective, the project offers distinct advantages for the automotive group. A private cloud combines the flexibility, scalability, and automation of modern computing clouds with control over the underlying infrastructure. As business-critical applications and sensitive vehicle and customer data are processed in a dedicated, closed environment, European regulations such as the General Data Protection Regulation (GDPR) and regulatory requirements can be implemented more effectively than in a shared public cloud infrastructure. Protection against cyberattacks and economic espionage can also theoretically be better managed in an exclusive environment.

However, the system change also raises questions. Although both companies emphasize the newly gained independence, in reality, Volkswagen is merely exchanging one dependency for another. Instead of a “vendor lock-in” with non-European cloud giants, VW is entering into a long-term interdependence with T-Systems as the sole operator of this business-critical infrastructure. A failure or delay of the project could paralyze the automaker's digital strategy, which has already been struggling with software problems in vehicle development for years.

Price and innovation question

Furthermore, T-Systems' promise to beat the hyperscalers' prices has yet to be fulfilled. The US giants benefit from enormous economies of scale and global data center capacities that a European service provider can hardly match. Private cloud infrastructures often tend to have higher maintenance and update costs compared to public clouds when operated globally.

Finally, the challenge of migration remains: transferring thousands of legacy systems from all group brands, which have grown historically, into the new cloud is an IT project performed “on an open heart,” which, based on experience, consumes large resources and is prone to errors.

(nen)