AT&T Enters $2 Billion Deal to Shift Operations to Microsoft Azure

AT&T has entered into a $2 billion agreement with Microsoft, in which the telecom company will use the enterprise technology company’s Azure cloud infrastructure to, among other things, shift most of its 250,000 employees to the Microsoft Office 365 suite of productivity and security tools.

Beyond providing internal software tools, the pact with Microsoft includes the joint development of artificial intelligence tools and applications for 5G wireless.

The non-exclusive deal still allows AT&T to see other clouds—AT&T for example, just announced yesterday a separate multi-billion deal with IBM for cloud-based services.

“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.”

According to research firm Canalys, Amazon Web Services remained the dominant cloud services provider in the fourth quarter, controlling 32% of a global cloud business worth $23 billion during the period. Azure controlled just 16% of the market, vs. 14% in the fourth quarter of 2017.

Microsoft has recently pulled off big deals for Azure with retailers including Gap, Kroger, Albertsons and Walmart, companies who have no interest in seeing competitor Amazon enjoy any further prosperity.

Added Microsoft CEO Satya Nadella: “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. 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.”

Daniel Frankel

Daniel Frankel is the managing editor of Next TV, an internet publishing vertical focused on the business of video streaming. A Los Angeles-based writer and editor who has covered the media and technology industries for more than two decades, Daniel has worked on staff for publications including E! Online, Electronic Media, Mediaweek, Variety, paidContent and GigaOm. You can start living a healthier life with greater wealth and prosperity by following Daniel on Twitter today!