A deal has been reached between Microsoft Corp and AT&T Inc worth a total of $2 billion, according to sources quoted in reports, which would give access to the United States telecommunications company to the Azure cloud service of Microsoft to for its computing needs as well as the Microsoft 365 with the opportunity of using Microsoft’s Office productivity software for its 268,000 employees.

While announcing the deal, the two companies also said that they would jointly participate in the so-called edge computing. This would see the use of Microsoft technology side by side of the forthcoming 5G network technology of AT&T to execute applications that require very little delays in passing data back and forth. Such service applications would include air traffic control systems for drones.

The deal is a multi-year one.

According to analysts, in the highly competitive cloud computing market, Microsoft’s Azure and Amazon.com Inc’s Amazon Web Services are very close rivals with Amazon leading the market and this deal can be considered to be a major win for Microsoft in its fight for market share in the global cloud computing industry. Microsoft would be recognized as the “preferred” cloud vendor for AT&T.

Cloud service customers run their software applications in data centers managed by the cloud provider.

The responsibility of maintaining and running its own core networking operations for cell phones and other devices would rest with AT&T even after the deal.

But the deal also marks a fundamental shift for the US telecommunications service providing giant to become “public cloud first” which would mean that the company will primarily depend on cloud computing centres and data centers that are developed, operated and maintained by other companies for the computing needs of its business, said John Donovan, chief executive of AT&T Communications, in an interview to the news agency Reuters.

“This is one of the most far-reaching initiatives we have put together because of it being so comprehensive,” he said.

The deal also gives the opportunity for Microsoft to make AT&T as a partner for selling its edge computing services. This service is aimed to assist software developers to write programs for situations such as factories in which the machines are fitted with sensors for data collection or in retail stores that have sensors and cameras fitted to record and maintain up to date records of inventories.

“Our general heritage of being a developer tools company, combined with the network capabilities of AT&T, is unique,” Microsoft Chief Executive Sayta Nadella said in another interview to Reuters.

A day ago, AT&T had said that it will take the help of International Business Machines Corp for its AT&T Business Solutions unit for modernization of the software for the cloud and allow the company to shift it between data centres.

There is too little information about the deal for one to comment on the role and importance of the deal in terms of the 5G and edge computing aspects, said Ed Anderson, an analyst with research firm Gartner.

“In addition to (AT&T) being an important customer, you’ve got two big important technology companies starting to come together to think about what some other possibilities are,” Anderson said. “But at this point, it’s really kind of left to the imagination to kind of figure out what those possibilities are.”

(Adapted from Reuters.com)

Categories: Creativity, Economy & Finance, Strategy, Sustainability, Uncategorized