Microsoft has agreed to acquire mobile core startup Affirmed Networks, a move the software giant said will allow it to sell virtualized mobile core network functions running on its Azure cloud computing offering.
Microsoft did not disclose the financial terms of the deal. Affirmed, founded in 2010, has so far raised $155 million in six rounds of venture funding from the likes of Centerview Capital, Qualcomm, Eastward Capital Partners and others. On its website, Affirmed boasts of more than 100 mobile network operator customers including behemoths like AT&T, Orange, Vodafone and Telus.
Microsoft's purchase of Affirmed appears to signal the company's intent to significantly expand its sales efforts among mobile network operators that are increasingly looking to replace their proprietary core network hardware with virtualized, software-powered capabilities: Such technologies are considered essential to 5G and edge computing.
After all, Affirmed itself argues that its approach to network operations is "open, cloud-native and capable of being webscale, all at 70% of the cost of traditional networks."
By acquiring Affirmed, Microsoft is setting itself up to more directly challenge mobile software vendors ranging from Ericsson to Cisco to Mavenir. And it will concurrently position itself against incursions by cloud computing companies like Amazon AWS into the mobile realm.
"We look forward to building on the great work by Affirmed Networks with its leadership in virtualized mobile networks," wrote Yousef Khalidi, corporate VP of Microsoft's Azure Networking business, in a blog Thursday announcing the acquisition. "Bringing this technology and team of experts into Microsoft allows us to extend our cloud offering to operators everywhere as they increasingly look to run their networks in a hybrid environment. We're excited about our future together where carriers will be able to better leverage Microsoft's cloud to improve overall profitability and create new revenue streams."
According to LinkedIn, Khalidi joined Microsoft in 2003 and since 2016 has been working on the networking side of the company's Azure cloud computing business. Indeed, late last year Khalidi offered extensive details on Microsoft's Multi-access Edge Compute (MEC) and Network Edge Compute (NEC) work with operator AT&T running on Azure.
Interestingly, Microsoft's announcement of its purchase of Affirmed comes less than 24 hours after Affirmed installed a new CEO. The company said Anand Krishnamurthy – who joined Affirmed in 2010 as VP of engineering – will replace Hassan Ahmed as the company's chief executive. Ahmed, who previously guided Sonus Networks to an initial public offering, has been Affirmed Network's CEO since 2010. Ahmed will continue as Affirmed's board chairman.
"I am really thrilled to see Anand leading our company forward," Ahmed said in a statement Wednesday, before the acquisition announcement. "As a co-founder of Affirmed, he is ideally equipped to lead the organization through its next phase of growth."