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Microsoft acquires Metaswitch, affirming investment in telcos

Microsoft has today announced it has signed a definitive agreement to acquire Metaswitch Networks, a UK provider of cloud-based communications products.

The acquisition affirms Microsoft’s significant investment in 5G technology – the announcement comes only weeks after the tech giant revealed its plans to buy Affirmed Networks, a company with a focus on 5G and edge computing.

Microsoft says Metaswitch’s portfolio of cloud-native communications software will expand its range of offerings for the telco industry, building on the gains it made by absorbing Affirmed.

“The convergence of cloud and communication networks presents a unique opportunity for Microsoft to serve operators globally via continued investment in Azure, adding additional depth to our hyperscale cloud infrastructure,” says Azure Networking corporate vice president Yousef Khalidi in a blog post on Microsoft’s website.

The company says its two recent acquisitions will bolster its efforts to provide expanded services to mobile carriers.

“Microsoft intends to leverage the talent and technology of these two organisations, extending the Azure platform to both deploy and grow these capabilities at scale in a way that is secure, efficient and creates a sustainable ecosystem,” says Khalidi.

ABI Research principal analyst Don Alusha says Microsoft's latest move is sending a message loud and clear to other cloud vendors.

"Microsoft is becoming a telco network powerhouse with a relentless appetite for acquisitions," says Alusha. 

"[This] acquisition extends Microsoft's cloud expertise to the telecoms domain -  blurring the lines between webscale companies and telecom operators.

"Microsoft's expertise in cloud infrastructure, and now specialized cellular network technology, will likely create major competition to established vendors."

While the industry moves at speed towards 5G, some operators may fully embrace the newer, software-based services delivered through the cloud, while others may see rapid migration as being too costly and prefer to upgrade gradually.

Microsoft says its investment in 5G will provide opportunities to operators to advance the virtualization of their core networks and move forward on a path to an increasingly cloud-native future. 

“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,” says Khalidi.

“We will continue to partner with existing suppliers, emerging innovators and network equipment partners to share roadmaps and explore expanded opportunities to work together, including in the areas of radio access networks (RAN), next-generation core, virtualized services, orchestration and operations support system/business support system (OSS/BSS) modernization. 

“A future that is interoperable has never been more important to ensure the success of customers and partners.”

The tech giant argues that investment in emerging technology, especially 5G, will enable operators to deliver newer, innovative experiences at scale.

“We have a long history of working with operators as they increasingly embrace software-based solutions and continue to support the advancement of cloud-based networking while helping create new partnership opportunities for existing network equipment providers,” says Khalidi.

“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.”

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