AT&T and Microsoft have announced a partnership worth billions that would let the communications giant use Microsoft’s Azure cloud system for its computing purposes, according to a report by Reuters.
At&T will also be able to use Microsoft 365 for its workers. Under the terms of the deal, the two companies will collaborate on what’s called edge computing, which means that Microsoft technology will be incorporated in AT&T’s forthcoming 5G network.
They will collaborate on speeding up data passage for certain applications, like air traffic for drones. Microsoft will become AT&T’s “preferred” cloud company, and the move will help it gain ground on rivals like Amazon, which is currently the largest cloud provider.
Customers of cloud services run software managed by the providers, in data centers. John Donovan, chief executive of AT&T Communications, said the deal represents a total shift in how the company used to operate, and that it will be “public cloud first,” and rely on data centers to power the business.
“This is one of the most far-reaching initiatives we have put together because of it being so comprehensive,” he said.
As for Microsoft, it gains a buyer for its edge computing sector, and the tech will aid developers in the creation of programs for specific situations, like when factory machines get sensors for data collection or cameras for inventory control.
“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.
Ed Anderson, an analyst with research firm Gartner, said it’s still too soon to know how pivotal the 5G and edge computing parts of the deal will turn out to be.
“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.”