Microsoft-AT&T partnership is a preemptive strike in 5G

AT&T and Microsoft introduced a multiyear partnership that may see AT&T transfer its non-network infrastructure computing must the Microsoft Azure cloud because it turns into a “cloud first” firm. Apart from the 270Ok workers at AT&T that may now migrate to the Workplace 365 platform for workplace and collaboration wants, and the assorted apps and databases that AT&T must run its different companies that may transfer to Microsoft Azure, there may be far more right here than simply Microsoft getting plenty of new O365 and Azure clients. And there may be far more at stake right here for AT&T as effectively.
From AT&T’s perspective, it’s clearly necessary that they transfer to a extra trendy infrastructure for inside wants. However equally, if no more importantly, is the necessity for AT&T to create an surroundings that permits it so as to add new companies for resale to clients. 5G will likely be an progressive know-how that may create main alternatives for community operators to not solely present sooner connectivity and decrease latency but in addition to supply community companies they by no means might have created earlier than. 5G is revolutionary in its skill to “slice and cube” networks to create a lot of potential companies – some at a really premium worth, and a few at very low value. If the community operators don’t leverage this to supply new companies and income streams, others absolutely will.
The entire community operators are eyeing having the ability to cost not just for community connectivity but in addition for excessive companies like specialised safety companies, distant monitoring and diagnostics, distant healthcare, sensible cities companies, autonomous autos, and new leisure choices like AR/VR (additionally necessary in enterprise), and many others. This requires a distributed computing infrastructure that features edge servers and distributed information networks. This needs to be constructed on a microservices structure on cloud enabled and distributed computing sources. This can be a main benefit that cloud permits.
AT&T can construct out 5G networking simply superb. However they aren’t a cloud service supplier and may actually leverage Microsoft on this house. After all, this implies AT&T will supply Microsoft Azure as the popular service, to the aggressive benefit of Microsoft. Nevertheless it’s unlikely AT&T will flip away purchasers who insist on working on prime of competing clouds (e.g., AWS and Google). Nonetheless, having “most popular” standing offers Microsoft a serious benefit in gaining clients, or at the least in gaining revenues for companies AT&T gives to clients.
Apart from the above benefits, Microsoft is aware of that because it strikes to a extra distributed cloud surroundings, it has to create excessive pace and low latency information lanes to allow most of the companies it hopes to supply on prime of Azure. Many of those information lanes will likely be wi-fi, and 5G is the longer term in wi-fi extensive space networks, particularly in enterprise conditions the place units — which could be autos, robots, autonomous devices, AR/VR headsets, and different IoT capabilities — will seemingly be untethered and/or roaming.
Microsoft is spending quite a lot of time and sources constructing out a distributed/hybrid cloud surroundings and has targeted on creating an edge primarily based IoT infrastructure. Who higher than a community operator like AT&T, that is aware of the place its clients will most use 5G connectivity, to inform Microsoft the place to station these edge cloud servers (probably even collocated with AT&T gear). Is it doable we could even see edge servers in lots of cell towers? Sure. And as talked about earlier, being a most popular cloud vendor means Microsoft may have a aggressive benefit in opposition to AWS, Google, and others in any cloud primarily based companies delivered or procured thorough AT&T.
This partnership gives some key advantages for each firms as outlined above. However there are additionally some potential downsides. First, if Microsoft is intently aligned with AT&T, what’s going to it imply for potential partnerships with different community operators who could not wish to associate so intently with an organization working with the “enemy.” This may occasionally really pressure different community operators to maneuver in direction of an AWS or Google as a countermove. Subsequent, from AT&T’s perspective, if they’re intently tied to Azure, what does that imply, notably for his or her future enterprise clients, who don’t want to be beholden to Microsoft? I don’t anticipate this to be a problem with most client companies (e.g., gaming, leisure, autonomous autos) as most customers don’t care who the underlying know-how supplier is.
Backside line: We must always anticipate to see much more partnering between cloud infrastructure suppliers and community operators as 5G turns into extra obtainable within the subsequent 1-2 years. There are some nice advantages for each in tying a excessive pace, low latency community to a cloud infrastructure that may deliver alive quite a few new and compelling companies for customers and companies. This will likely be key to having community operators change into extra than simply “dumb pipes.” However what was as soon as a “decide a service primarily based on their sign availability and worth” could flip right into a “decide a mixture community/cloud supplier,” which can make it harder in some conditions to decide on. Nonetheless, I see this as a win for each AT&T and Microsoft long run, and an instance of how community operations and companies will change sooner or later.
Jack Gold is the founder and principal analyst at J.Gold Associates, LLC., an info know-how analyst agency primarily based in Northborough, MA., protecting the various facets of enterprise and client computing and rising applied sciences. Observe him on Twitter @jckgld or LinkedIn at

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