Microsoft has scored a major cloud deal, thanks to an acquisition.

The company will acquire AT&T’s Network Cloud technology and intellectual property, as well as making job offers to several hundred AT&T engineers.

In return, AT&T will move its 5G mobile network to Azure. The companies will start with AT&T’s 5G core, and expand from there.

AT&T Dallas
– Sebastian Moss

The partnership builds on an existing $2bn deal where AT&T moved its back-end office to Microsoft Azure. The tech company became AT&T's preferred cloud provider for "non-network applications," many of which will move to Azure.

The two companies also teamed up to offer 5G-enabled applications and Edge applications to mutual customers, but the project was limited in scope.

At the same time, AT&T kept its options open. It entered into a "multi-year strategic partnership" with IBM to shift a number of AT&T Business workloads to its cloud. Using IBM Red Hat software, the deal also appeared to put IBM in charge of managing its multicloud strategy.

AT&T also partnered with Amazon Web Services in 2016 on IoT, cybersecurity, and cloud technology. It reaffirmed the partnership in 2017.

Google, too, has been in the mix. When it announced its Anthos for Telecom product, it said that it would partner with AT&T to test a portfolio of 5G Edge computing solutions for industries like retail, manufacturing, transportation.

Now, it looks like AT&T will run the majority of its IT and 5G on Microsoft Azure - via the division it is selling to Microsoft.

“AT&T has one of the world’s most powerful global backbone networks serving hundreds of millions of subscribers," the telco's CTO Andre Fuetsch said.

"Our Network Cloud team has proved that running a network in the cloud drives speed, security, cost improvements, and innovation. Microsoft’s decision to acquire these assets is a testament to AT&T’s leadership in network virtualization, culture of innovation, and realization of a telco-grade cloud stack."

Microsoft plans to make the team and IP part of its wider Azure for Operators division, and offer the technology to other telecoms companies.

“With Azure, operators can provide a more flexible and scalable service model, save infrastructure cost, and use AI to automate operations and differentiate customer offerings,” Jason Zander, Azure EVP at Microsoft, said.

"Through our collaboration with AT&T, Microsoft will expand its telecom portfolio to support operators with a carrier-grade cloud that provides seamless experiences across Microsoft’s cloud and the operator’s network.”

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