Microsoft acquires AT&T networking tech to bolster its Azure for Operators strategy

Microsoft and AT&T are expanding their existing partnership around 5G and edge computing.
Written by Mary Jo Foley, Senior Contributing Editor
Credit: Microsoft

AT&T has been working with Microsoft for several years to test its 5G workloads on Azure. Today, June 30 -- the last day of Microsoft's fiscal 2021 -- the pair announced the renewal of their partnership, with Microsoft acquiring AT&T's carrier-grade Network Cloud platform technology.

Does this mean Microsoft is becoming a mobile operator? No. Nor is AT&T getting out of the telco business.

The Network Cloud Platform is what AT&T has used to run its 5G technology since 2018. Microsoft plans to take this Network Cloud platform, specifically the intellectual property and technical expertise around it -- and bring it to its Azure for Operators telco offering, the pair said.

"This move brings real-world production 5G workloads to Azure for Operators," said Microsoft via a press release. Microsoft will make offers to the AT&T Network Cloud platform engineering team to move to work for Microsoft.

Announced last year, Azure for Operators is about making Azure more appealing to telecommunication companies. Microsoft officials said at the time that it had no intentions to become a telco provider in its own right. Microsoft also bought a couple of 5G-centric companies in recent months -- Metaswitch Networks and Affirmed Networks -- to further bolster its ability to sell Azure to telcos.

Telecommunications is one of Microsoft's key vertical markets. The company already counts NTT, Vodafone, T-Mobile, Verizon Business, Deutsche Telekom, Telefonica, and Telstra, along with AT&T, as partners and/or customers in this space.

Today, AT&T officials said they are moving their 5G mobile network to Microsoft's cloud, which provides a path for all of its mobile network traffic to be managed using Azure technologies. The first piece to be moved will be AT&T's 5G core, which connects mobile users and IoT devices with Internet and other services.

In 2019, Microsoft and AT&T announced Azure technology would be woven into AT&T's 5G and edge networks, so that AT&T's virtualized 5G core Network Cloud will be able to deliver Azure services to customers. Today's announcement advances the original 2019 deal between the two companies.

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