Roughly six months into their groundbreaking agreement, Microsoft reported that it is making progress in transferring AT&T's 5G cloud and core into Microsoft's Azure operations.

Microsoft also reported that it has received interest in the effort "from many operators, partners and customers." That's noteworthy considering Microsoft is using its work with AT&T to improve its new Azure for Operators offering, which the company ultimately plans to sell back to AT&T and potentially other network operator customers as well.

"We're taking the AT&T Network Cloud technology, building it into Microsoft's standard hybrid cloud product, and then delivering a carrier-grade hybrid cloud solution back to the market and AT&T itself, where it can run at AT&T on-premises or on Azure public cloud," Microsoft's Shawn Hakl, VP of 5G strategy in Azure for Operators, explained in a blog post on the company's website. Before joining Microsoft in 2020, Hakl was a longtime Verizon executive.

Hakl went on to point out that Microsoft's ultimate goal is to leverage its learnings in the enterprise cloud space as it enters the telecommunications market. "Telecommunication services are highly distributed and will likely become more so over time," he explained. "As a result, the value of creating a carrier-grade hybrid cloud model lives in its ability to meet customers where they are – at the edge of the cloud, the edge of the network, or the edge of the enterprise."

However, Hakl argued that Microsoft's work with AT&T is unique in the telecom world. For example, he said Microsoft is working to consume the Network Cloud that AT&T started building in 2013 as part of its much-touted shift toward software defined networking (SDN) and network function virtualization (NFV) technologies. Today, AT&T's mobile core network spans more than 60 cloud-native network functions (CNFs) and virtual network functions (VNFs) from 15 different vendors, Hakl wrote.

Figure 1: Microsoft said it's working to integrate AT&T's operations into its hybrid cloud.
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(Source: Microsoft)

But Hakl said AT&T – and presumably Microsoft's other customers – will remain in charge of their networking efforts even after they sign on to Azure for Operators. "Microsoft develops the carrier-grade hybrid cloud technology that supports the AT&T mobility core network workloads. AT&T continues to select and manage the network applications (VNFs and CNFs) and their configurations to deliver mobility services to AT&T customers," he wrote. "In terms of security, it's important to note that Microsoft does not access AT&T customer data – AT&T continues to hold access to that data, and Microsoft cannot see it."

Hakl argued that the end result will be a product that will give AT&T better resiliency, lower costs and the ability to scale more quickly.

James Crawshaw, a principal analyst of service provider operations and IT for research and consulting firm Omdia (a sister business to Light Reading), wrote on LinkedIn that Microsoft will have a lot of work to do to fully support AT&T's complex core and cloud operations.

He also wrote that AT&T has a history of offloading networking systems. For example, the company in 2016 offloaded its ECOMP orchestration/automation system to the Linux Foundation open source community. However, "I don't think that was a huge success," Crawshaw wrote, as he believes AT&T has replaced ECOMP (subsequently dubbed ONAP) elements with commercial orchestration systems in a number of areas.

"Offloading its OpenStack-based cloud platform to Microsoft is a similar strategy," he wrote of AT&T. "But if Microsoft struggles to turn a managed service into a repeatable product that they can sell to other operators around the world they may end up offloading it onto an IT services company whose business model is a better fit."

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— Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano