Microsoft to acquire Metaswitch Networks, ramping up Azure 5G push

Microsoft is to acquire , a provider of virtualised network software, as the company’s strategy towards binding cloud and communications continues.

The rationale is straightforward: leading cloud vendors are looking to enable telecom operators in deploying and maintaining 5G networks more efficiently. Technologies such as those which Metaswitch builds will be invested into Azure to provide its infrastructure with ‘specialised software required to run virtualised communication functions, applications and networks’, as Microsoft puts it.

With this acquisition, Microsoft is doubling down having announced its intent to buy Affirmed Networks back in March – a deal which closed three weeks ago.

“By enabling advancements in enhanced mobile broadband, ultra-reliable low latency communications and massive machine-type communication to enable IoT at scale, 5G offers significant potential for enterprises and governments and in turn creates new opportunities for operators,” wrote Yousef Khalidi, corporate vice president for Azure networking in a blog post.

“Our intention over time is to create modern alternatives to network infrastructure, enabling operators to deliver existing and value-added services with greater cost efficiency and lower capital investment than they’ve faced in the past,” Khalidi added.

Analysis

The roadmap for telecom and cloud providers is converging at a rapid pace.

Partnerships are one of the more obvious paths for both. Take Verizon, who at re:Invent in December outlined details of its deal with Amazon Web Services (AWS) to deliver 5G-connected cloud and edge computing. The latter, through AWS Wavelength, is important: embedding compute and storage services on the edge of operators’ 5G networks, enabling the delivery of ultra-low latency applications.

This is all a far cry from when Verizon, who has been an all-in AWS customer for the past two years, tried to gatecrash Amazon’s market share in public cloud infrastructure. Verizon’s acquisition of Terremark at the beginning of 2011, a relative behemoth when cloud was nascent, was at the time praised as a good move and showed their intent. Yet having neither the developer pull nor the speed to match AWS and, in time, Microsoft and Google, the original ‘telco cloud’ died out, with Verizon eventually selling its business to IBM.

Microsoft, alongside acquiring companies with specific networking and virtualisation expertise, is also pushing into partnerships, such as its work with AT&T, who is also working with IBM. The two companies will explore various use cases which combine 5G and edge computing, such as mobile gaming, as well as drones for augmented and virtual reality, while AT&T will become a Microsoft cloud customer of sorts, as a preferred technology partner for non-network applications.

Another way is being advocated by Google Cloud. In March, the company launched its Global Mobile Edge Cloud (GMEC) strategy, building an open cloud platform to deliver services in conjunction with telecoms companies. Vodafone and Italian operator Wind Tre were cited as part of this operation. Targeting industries such as retail, manufacturing and transportation, Google is seeing itself as a cloud provider which, alongside providing the usual efficiencies, will help telcos monetise 5G as a business services platform.

If this can be seen as a revamped telco cloud model, it is certainly one which makes increasing sense, to get infrastructure, network and, crucially, developers building applications, in the right place. “We will continue to support hybrid and multi-cloud models to create a more diverse telecom ecosystem and spur faster innovation, an expanded set of unique offerings and greater opportunities for differentiation,” added Khalidi.

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