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Microsoft, AT&T 5G Deal Gives Azure Telecom Cloud A Boost

The agreement will bring AT&T’s 5G workloads to Microsoft’s Azure for Operators carrier-grade cloud platform, and will ‘help the telecom industry deliver reliable and secure 5G services to consumers and enterprises around the world,’ Microsoft CEO Satya Nadella said in a tweet.

Microsoft and AT&T have reached a deal that brings the carrier’s 5G workloads to the Azure for Operators platform and gives AT&T access to Microsoft cloud, artificial intelligence and edge technology to assist with launching new 5G-enabled services.

As part of this deal Microsoft will acquire AT&T’s Network Cloud, bringing real-world production 5G workloads to Azure for Operators, Microsoft’s telecom cloud offering, according to a statement by both companies Wednesday. Microsoft also acquired AT&T’s engineering and lifecycle management software to develop and deploy a carrier-grade cloud running containerized or virtualized network services.

[RELATED: Microsoft Unveils 5G/Telco Playbook With ‘Azure For Operators’]

In a tweet on Wednesday, Microsoft CEO Satya Nadella said the deal demonstrates the company’s momentum with its Azure for Operators platform.

“With today’s announcement, we’re expanding Azure for Operators to help the telecom industry deliver reliable and secure 5G services to consumers and enterprises around the world,” Nadella said.

The companies did not disclose the financial terms of the deal, and did not immediately respond to requests for comment on Wednesday.

Microsoft will assume responsibility for software development and deployment of the Network Cloud immediately. It plans to bring the existing AT&T network cloud to Azure over the next three years.

Along with the acquisition, Microsoft Azure for Operators will host AT&T’s 5G mobile network, with the eventual goal of Microsoft Azure technologies managing all of AT&T’s mobile network traffic.

Microsoft will make its platform applicable to other carriers through Azure for Operators and invest in an ecosystem to speed up the migration of network workloads to the cloud.

AT&T’s 5G core, the software that connects mobile users and internet of things (IoT) devices with the internet, will be moved to Azure first. The move to Microsoft’s Azure for Operators cloud product will increase AT&T’s productivity and cost efficiency, according to the statement.

Michael Goldstein, CEO of Fort Lauderdale, Fla.-based Microsoft partner LAN Infotech, told CRN that the news helps prove the use case for Azure in the ongoing cloud industry battle. Azure ranks well behind Amazon Web Services in its share of the cloud infrastructure services market, though Azure has been gaining ground on AWS in recent years.

“This is a big win for Microsoft,” Goldstein said. “[This is] another large company moving major operations to the Azure cloud.”

The deal also shows “how the world will change with the higher available access and speeds” of 5G, Goldstein said.

Network Cloud platform engineering team members will receive offers to join Microsoft, expanding on the technology skills gained from the acquisitions last year of Affirmed Networks and Metaswitch Networks to create a secure telecom network in the cloud for operators.

Documents filed with the U.S. Securities and Exchange Commission show that Microsoft spent at least $270 million in stock to buy Metaswitch. Bloomberg reported last year that the Microsoft deal valued Affirmed Networks at $1.35 billion.

AT&T will continue to operate its network and retain customer relationships, according to the statement. Access to Microsoft’s cloud, artificial intelligence (AI) and edge technology will help AT&T with launching new 5G-enabled services.

In September, Microsoft unveiled its playbook to partner with communications service providers with Azure for Operators, building on established partnerships with operators such as AT&T and T-Mobile.

In the summer of 2019, Microsoft Azure and AT&T unveiled a multiyear deal reportedly worth more than $2 billion to leverage AI and 5G using AT&T’s network and the Azure cloud platform to market integrated solutions in areas including voice, collaboration, edge, IoT, public safety and cybersecurity.

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