Volkswagen plans to invest $4 billion to invest in digitalization by 2025, and it has named Microsoft as its partner for future endeavors.

VW announced Friday it has entered a strategic partnership with Microsoft for all future digital services and mobility efforts.

Microsoft will advise and work alongside VW as it implements its connected vehicle fleet and digital ecosystem called "Volkswagen We." The long-term goal is to implement We as the car's platform to become a hub for the Internet of Things (IoT). The platform branches out even further to VW's group-wide cloud platform called One Digital Platform. The ODP will be built upon Microsoft's own Azure and Azure IoT Edge cloud platforms, which VW said will "dramatically" streamline its technical landscape. 

Funneling back down to Volkswagen We, the platform will range from WePark for integrated parking billing, WeDeliver package delivery to VW vehicles, and WeShare car sharing. The latter will reach North America sometime in 2020, VW previously announced. And the digital services under We will only grow with a dedicated VW.os operating system connecting drivers and customers to a variety of future applications and services.

The automotive cloud-based system will also provide a secure connection between the car and data for the automaker. Eventually, VW will be able to push software updates and upgrades to millions of cars via the Microsoft-based technology that both will work to adapt for the automobile.

With the announcement, VW will establish a "new automotive cloud development office" in North America, near Microsoft's headquarters in Redmond, Washington. VW said the office will eventually grow to house 300 engineers working on the future connectivity technology.

Microsoft Azure will link all future VW vehicles to the IoT beginning in 2020.