5 Things Partners Need To Know About The Microsoft- AT&T 5G Deal

The trend of software-defined networking and the opportunity to join 5G and cloud technologies made the AT&T deal appealing and gives Microsoft’s telecom cloud a leap forward, Shawn Hakl, Microsoft’s vice president of 5G strategy, tells CRN.

Telecommunications operators are already “intensely interested” in working with Microsoft partners after the tech giant’s deal to acquire AT&T’s Network Cloud and software to improve its carrier-grade Azure for Operators cloud, Shawn Hakl, Microsoft’s vice president of 5G strategy, told CRN.

5G at the edge is still in its earliest days, Hakl said. Manufacturers, oil rigs, mines and agricultural business are some of the early adopters he’s seen, but the use of cloud technology for core networking “has skyrocketed in the last six months,” creating plenty of opportunity for channel partners.

“The operators that we work with are intensely interested in the ecosystem and the ecosystem participation from partners because they want the innovation,” Hakl said.

“Microsoft’s traditional strength is being able to leverage that broad partner ecosystem,” he continued. “That strategy hasn’t changed. We’re not changing what Microsoft does here. That playbook works pretty well everywhere else. We fully expected that partner approach to work very well with Azure for Operators.”

Zac Paulson, CEO of TrueIT, a Fargo, N.D.-based Microsoft partner and No. 496 on CRN’s 2021 Solution Provider 500 list, told CRN that the news helps prove the use case for Azure and should bring more companies in the Internet of Things space onto Microsoft’s cloud product.

“We are fully bought in on the Microsoft stack, so collaboration between two heavyweights in their respective classes always brings opportunity to the marketplace,” Paulson said.

Here’s what you need to know.

Microsoft Expands Telco Reach

The tech giant’s telecommunications presence has traditionally been back-office support for telecom IT departments and as a reseller, Hakl said. But the trend of software-defined networking and opportunity to join 5G and cloud technologies made the AT&T deal appealing and gives Microsoft’s telecom cloud a leap forward.

“What AT&T has made the decision to do is to allow us to take over their network cloud and transform them to Azure for Operators,” he said. “We’ve extended offers to AT&T employees that work on network cloud today to come join the team at Microsoft as well as we’ll be taking some of the IP.”

“When they [AT&T] first started network cloud a few years ago, it was because there wasn’t an option for a hybrid cloud to operate,” he continued. “They’ve got years of experience at learning what’s specific about telco, what it takes to support the tier-one scaling requirements, what it means to be carrier-grade.”

Beyond The Edge

In 2019, AT&T and Microsoft worked out the start of a multiyear partnership to support each other in cloud and 5G, a pact valued at more than $2 billion.

The two giants initially unveiled plans to design, test and build edge computing capabilities by combining the global reach of Microsoft Azure with AT&T’s domestic 5G capabilities. But this week’s news goes beyond the edge, Hakl said. Here, Microsoft will supply the technology for core network operations.

“Keep in mind AT&T still runs their network,” he said. “We’re a platform company, so that hasn’t changed.”

Azure has become an integral part of Microsoft’s sales growth strategy. In April, the No. 2 cloud provider reported Azure sales were up 50 percent year over year as the COVID-19 pandemic continued to force organizations into digital transformation mode. “We are building Azure to address organizations’ needs in a multi-cloud, multi-edge world,” Microsoft CEO Satya Nadella (pictured) said in a call with analysts at the time.

Microsoft Partners Key For Go-To-Market

Hakl said a key attraction for AT&T in the deal was the vast ecosystem of partners that comes with Microsoft.

“Telcos are a big ecosystem. We’re bringing the whole ecosystem with us as we do this and that’s an important part of this. That’s what makes it distinct,” he said.

“We already have a very large B2B partner ecosystem and a very large application ecosystem,” he said. “We feel that we’ve got a unique perspective on how to bring that to the table and help the operators.”

Hakl said software-based technology should make integration easier and create an open, interoperable ecosystem for telecom operators.

He also hopes that a programmable interface with the network gives Microsoft developer partners access and helps carriers monetize their networks.

“As the carrier gets a more software-driven, programmable network, they can expose that upward through APIs,” he said. “And that lets people build services on top of that, which allows them both to monetize the 5G. It creates a whole new set of applications and ecosystems for people to manage and deploy and bring their own intellectual property to the table.”

Some Partner Opportunities Already Available

For Microsoft partners already involved in edge applications, Hakl said they can look at Microsoft’s private multi-access edge compute (MEC) offer.

Introduced in June, Azure MEC is a partner initiative to empower operators, system operators and ISVs to develop Microsoft-validated Azure private MEC customer solutions. The goal is to simplify network connectivity and applications on-boarding to get more value out of edge assets in remote locations with minimal disruption to the business model, according to a Microsoft statement last month.

“They have the ability to define how their software comes together better leveraging 5G or private 4G networking technology along with edge compute,” Hakl told CRN. “We’re happy to work with them to prove that out to customers, so bring it on. That’s an area of intense interest for our customers.”

More Capabilities In ‘Next Few Months’

Microsoft plans to roll out new Azure for Operators capabilities in the next few months. “The operators that we work with are intensely interested in the ecosystem and the ecosystem participation from partners because they want the innovation,” he said.

Microsoft partners can also engage operators on more transitions to the cloud, from core networking to software and other areas. “For folks that are experienced at helping with that, there’s a lot of opportunity there,” Hakl said. “There’s a strong recognition that the skill sets there are going to be unique and that there’s a lot of transformation taking place and people are looking for assistance with that. So it’s a good chance for them to come along at every level.”

Certification, particularly for the core networking cloud, will roll out in “a matter of months,” he said.