AT&T & Microsoft Ink 'Extensive' Deal for Cloud, 5G, AI & Edge

In an 'extensive, multiyear alliance,' AT&T is moving its non-network applications to Microsoft Azure and its employees to Microsoft 365, while Microsoft gets access to AT&T's network for emerging 5G, AI and edge applications.

Mitch Wagner, Executive Editor, Light Reading

July 17, 2019

4 Min Read
AT&T & Microsoft Ink 'Extensive' Deal for Cloud, 5G, AI & Edge

AT&T and Microsoft "are embarking on an extensive, multiyear alliance" encompassing the cloud, AI, 5G and the edge, the two companies said Wednesday. This follows a broad cloud deal that AT&T announced with IBM Tuesday.

Terms of the AT&T and Microsoft deal were not disclosed, but Reuters and CNBC both put the value at $2 billion.

As part of the Microsoft deal, AT&T names Microsoft as the "preferred cloud provider for non-network applications." Additionally, Microsoft will support AT&T consolidation of data center infrastructure and operations, the two companies said in a joint statement Wednesday.

AT&T is becoming a "public cloud first" company and plans to migrate most non-network infrastructure applications to the Microsoft Azure cloud platform by 2024, the companies said. Over that time, AT&T will focus on "core network capabilities," customer innovation and "empower[ing] its workforce while optimizing costs."

AT&T will also deploy Microsoft 365 to its employees. Microsoft 365 is a bundle of Microsoft products and services, including Windows 10, Office 365, mobile device management and security.

The deal goes two ways
As AT&T consumes Microsoft technologies, Microsoft gets access to the AT&T network, particularly 5G, AT&T CEO John Donovan said in a statement on Microsoft-owned LinkedIn.

Additionally, AT&T and Microsoft will collaborate on 5G and edge computing to enable low-latency connections that will allow devices to process data closer to where decisions are made.

AT&T and Microsoft will work on integrated solutions for a number of areas: voice-based collaboration and conferencing; intelligent edge and networking; IoT; public safety; and cybersecurity. "The companies already have joint enterprise solutions for networking, IoT, and blockchain in market, and expect to announce additional services later in 2019," according to the AT&T/Microsoft statement.

Additional applications will be "aimed at social good," the companies said. Both companies have been focused on such issues as improving sustainability, accessibility and homelessness. Additionally, AT&T is working on addressing violence and unemployment.

AT&T and Microsoft previously announced a deal in February. The two companies then said they'd test deploying Microsoft Azure compute on AT&T's 5G edge network to reduce latency for both enterprise and consumer applications. As part of that deal, AT&T and Microsoft are working with Israeli startup Vorpal on a public safety application to detect drones in flight in restricted locations such as around aircraft and airports.

AT&T's Microsoft deal isn't exclusive.
On Tuesday, AT&T and IBM announced a deal where IBM will provide cloud resources and Red Hat Kubernetes to support AT&T Business applications, while AT&T helps bring software-defined networking to IBM, part of a 20-year relationship between those two companies.

AT&T is "playing the field," says Heavy Reading analyst James Crawshaw, noting an earlier deal that AT&T did with Mirantis to provide Kubernetes and OpenStack as a cloud foundation for AT&T's 5G network. Mirantis described the agreement as an "eight-figure" multi-year deal when the companies announced it in February.

Crawshaw says he expects AT&T is also working with Amazon Web Services and Google Cloud Platform.

AT&T sees strategic importance in integrating edge and centralized cloud capabilities to improve responsiveness for emerging applications, such as the Internet of Things. The cloud is "fragmenting again," moving workloads out to the edge, and AT&T sees taking advantage of that trend as crucial, Roman Pacewicz, AT&T Business chief product officer, told Light Reading at Mobile World Congress in Barcelona earlier this year.

"Public cloud first" for non-network applications is not a new priority for AT&T, says Heavy Reading analyst Gabriel Brown. "I interviewed John Donovan on stage at MWC 2016 and asked him about his propensity to use public cloud for AT&T applications, half expecting him to dismiss it in favor of in-house. To my surprise, three and a half years ago, he was open to the idea, in the right circumstances, and had clearly already been giving it serious thought," Brown says.

The AT&T deal is a big win for Microsoft, which is the second-largest cloud provider by market share and is hustling to catch up with first-ranked Amazon Web Services, says Ovum analyst Roy Illsley. Winning "big name accounts" like AT&T is part of that initiative. Retailers are already moving to Azure, and now a big telco makes a prominent endorsement.

— Mitch Wagner Visit my LinkedIn profileFollow me on TwitterJoin my Facebook GroupRead my blog: Things Mitch Wagner Saw Executive Editor, Light Reading

About the Author(s)

Mitch Wagner

Executive Editor, Light Reading

San Diego-based Mitch Wagner is many things. As well as being "our guy" on the West Coast (of the US, not Scotland, or anywhere else with indifferent meteorological conditions), he's a husband (to his wife), dissatisfied Democrat, American (so he could be President some day), nonobservant Jew, and science fiction fan. Not necessarily in that order.

He's also one half of a special duo, along with Minnie, who is the co-habitor of the West Coast Bureau and Light Reading's primary chewer of sticks, though she is not the only one on the team who regularly munches on bark.

Wagner, whose previous positions include Editor-in-Chief at Internet Evolution and Executive Editor at InformationWeek, will be responsible for tracking and reporting on developments in Silicon Valley and other US West Coast hotspots of communications technology innovation.

Beats: Software-defined networking (SDN), network functions virtualization (NFV), IP networking, and colored foods (such as 'green rice').

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