Interview with Heiko Hüttel
With technology partners such as Microsoft, Volkswagen is developing the digital ecosystem for the connected mobility of the future. Heiko Hüttel of Volkswagen Automotive Cloud is convinced that Volkswagen will be able to use this to offer its customers an unbeatable range of services.
Mr. Hüttel, Volkswagen is building a digital ecosystem. What does this actually mean in concrete terms?
A classic example of a digital ecosystem is given by Apple. The iPhone, as a device, is an important component of it, but despite the revenue achieved by sales of the device, it is by no means the only component. There are subscription services which you can use to stream music, or to exchange messages. That sounds simple, doesn’t it? And that’s exactly what this is about: making the complexity behind it as simple as possible for customers.
Most people are now already registered in one or more of these ecosystems, whether they be Apple, Google, Amazon, or Microsoft. Does Volkswagen simply want to add another ecosystem?
The opportunity that we have to secure customer loyalty is by creating an integrative ecosystem. In the best case, this integrates itself both into the customers’ private life and into their professional life, because mobility is situated exactly at the point between these two areas. And it also actively integrates third-party providers who can offer their own services in this ecosystem, thereby providing a vibrant world of service and experience.
Which digital services are conceivable here?
We always think in terms of the time before one starts driving, during the drive and after the drive. We want to offer our customers a clear added value here. Looking at the area of productivity, the calendar function is a succinct example of this.
But almost everyone already has a digital calendar.
Exactly! It won’t work to just offer a Volkswagen calendar now and to say, “Dear customer, please enter your appointments here too.” People have a calendar for their business life, and a calendar for their private life. I have to manage to bring them together, so that I can then be automatically dialed up to a telephone conference in the car while driving on the highway. That is just one example. Our aim must be to provide real help for the driver while they are driving.
So you want to become a part of your customers’ digital everyday life. In other words, you want to get onto the start screen of their smartphones. How can you achieve that?
We will only be able to achieve that if we focus on the customers and their individual needs. Take the example of the electric car. I have to be able to charge the car and pay for the electricity, the car must be preheated before I start driving so that it will have a better range, and so forth. The more I can automate this, the greater the benefit for the customer. For example, if the calendar tells me that I have my next meeting in three hours’ time in Braunschweig and, based on the current traffic situation, it will take an hour to drive there, the car will then automatically begin heating up very slowly an hour and a half before my departure, while it is still being charged. This saves electricity. This means that I, the driver, can then get into a fully charged and preheated car and arrive at my appointment on time. These kinds of things are persuasive services that I can’t get anywhere else, because they are directly connected with the car.
As you said, there are very complex processes behind these very simple things. Will these processes be steered by artificial intelligence in the future?
Sometime in the future, a kind of digital assistant will take on this job. We haven’t reached that point yet though. For example, it is tremendously important that the user experience of the digital services and offers is standardized and designed the same way everywhere. The technology must serve the user experience! We still have to grasp that in some areas. The fact is that the maxim “technology seeks application” doesn’t help us anymore. Things have to happen the other way around. The changes that we have to make in order to achieve this in terms of our way of thinking and working methods are fundamental.
What role does the technology partnership between Volkswagen and Microsoft, which was announced at the end of 2018, play here?
This partnership is aimed at the question: How do I kick-start the technology? How do we get standardized software into the vehicle and into our Cloud applications so that we can work faster? How do we create a platform which includes the vehicle?
Do these questions already have answers?
A lot of brainwork and software expertise lies behind this. In addition, we have increased our strategic strength, for example through participation in Wireless Car. This is about the networking of cars. Finally, with diconium, we are building an e-commerce solution, the digital shopping center, so to speak, in which all the offers and services will be available. With this, we have laid the foundations for the worldwide expansion of the Automotive Cloud.
Is the automobile manufacturer turning into a software company?
We have founded a new company near Microsoft in Seattle that is working on this new platform together with Microsoft. We selected this location deliberately because, of course, we should, and also want to, learn from the work organization and models of the IT world. So we are concerned with technology, but also with digital culture.
So Volkswagen is becoming a start-up?
No, not that. That is not what we want to do. But in the software world, there is a simple maxim: We have to move from being product-centric to being customer-centric. Strictly speaking, the same now applies to cars. Software is being developed much faster today and is constantly being updated. This can also be significantly accelerated for cars, too, if we separate hardware, software and services. Then we can approach the customer with an update or a new service in a matter of a few weeks.
To ask a naive question: Why exactly is Volkswagen investing in digitalization? Why doesn’t Volkswagen leave the software to software companies and simply purchase innovations?
It has to do with a simple question: Do I want to be a hardware supplier in the future and build vehicles while others profit from the software and services? Or do I want to do it myself? If we were to concentrate only on building vehicles, it could turn out that someone comes around the corner who does it better. And that is not what we want. We have the resources to be able to provide both hardware and software. Our objective is, therefore, to develop, build and sell excellent vehicles – and to create a growing universe of digital services and offers for our customers.
A completely carefree world of mobility?
Someday, I – as a Volkswagen customer – will simply say where I would like to go and everything else will happen automatically. If I want to go to Munich, my car will drive me to the train station, where I will get on the train, and in Munich another Group vehicle will then be waiting for me. This is still a dream of the future, but we are in the process of laying the technological foundations for it with the Automotive Cloud.