AT&T teams up with Microsoft on cloud, edge, AI, 5G

On the heels of a cloud announcement with IBM a day ago, AT&T announced a broad cloud alliance with Microsoft on Wednesday that includes AI and 5G.

As two industry heavyweights, Microsoft and AT&T's partnership will ripple across the telecom industry by benefiting both companies' customer bases and vendor partners. Citing an unnamed source, CNBC reported that the deal is worth more than $2 billion.

The two companies' multi-year alliance includes Microsoft being named as AT&T's preferred cloud provider for non-network applications as part of the telco's broader "public cloud first" strategy. Microsoft also will throw its support behind AT&T's efforts to consolidate its data center infrastructure and operations.

"AT&T and Microsoft are among the most committed companies to fostering technology that serves people," said John Donovan, CEO, AT&T Communications, in a statement. "By working together on common efforts around 5G, the cloud, and AI, we will accelerate the speed of innovation and impact for our customers and our communities."

AT&T is on the home stretch for having 75% of its network virtualized by 2020, and it's also working toward being a public cloud-first company by moving most of its non-network workloads to the public cloud by 2024. AT&T said moving those workloads to the cloud will allow it to focus on its core network capabilities, accelerate innovation for its customers, and "empower its workforces while optimizing costs."

As part of its agreement with Microsoft, AT&T will equip most of its workforce with cloud-based tools that are available in Microsoft 365, while also migrating the non-network infrastructure applications to Microsoft Azure.

There's also a large 5G element to the alliance with Microsoft slated to design, test and build edge-computing capabilities on AT&T's 5G network. Microsoft and AT&T will work on use cases for 5G such as enabling near-instantaneous communications for first responders who are using AI-based live voice translations to communicate with a person in need who speaks a different language.

The global scale of Microsoft Azure's cloud combined with AT&T's domestic 5G network capabilities will allow them to develop solutions for their mutual customers. Areas of collaboration will include voice, conferencing, intelligent edge and networking, IoT, public safety and cybersecurity. AT&T has said that it expects to have nationwide 5G deployed by the first half of next year.

At Mobile World Congress earlier this year, AT&T announced a pilot of network edge compute (NEC) capabilities on its 5G network with Microsoft Azure. Last month the two companies said they had worked together to test an edge-computing-based tracking detection system for drones.

AT&T and Microsoft already have joint enterprise solutions for networking, IoT and blockchain available in the market and expect to announce more services later this year.

"AT&T is at the forefront of defining how advances in technology, including 5G and edge computing, will transform every aspect of work and life," said Microsoft CEO Satya Nadella, CEO, in a statement. "The world's leading companies run on our cloud, and we are delighted that AT&T chose Microsoft to accelerate its innovation. Together, we will apply the power of Azure and Microsoft 365 to transform the way AT&T's workforce collaborates, and to shape the future of media and communications for people everywhere."

In addition to their technology efforts, AT&T and Microsoft also said they would work together on technology-enabled approaches and solutions aimed at social good.

RELATED: AT&T Business and IBM forge closer cloud relationship

On Tuesday, AT&T Business announced it would modernize its internal software apps to enable migrations to the IBM Cloud. IBM will be the primary developer and cloud provider for AT&T Business’ operational applications, and will also help manage the AT&T Communications IT infrastructure, on and off premises and across different clouds, both private and public.

Cloud partnerships have become increasingly important for service providers such as AT&T and Verizon as they deploy their 5G services, and offer more cloud-based enterprise services and applications.

In December, AT&T announced it was teaming up Sungard Availability Services and Amazon Web Services (AWS) to offer its business customers cloud recovery support. In 2017, AT&T announced it had expanded its business cloud network partnership with AWS.

Last year Verizon announced that AWS was its preferred public cloud provider.