AT&T and Microsoft sign $2 billion cloud deal

DALLAS and REDMOND, Wash. – In its bid to becoming a “public cloud first” company, AT&T has signed “multi-year alliance” with Microsoft Corp. estimated to be worth more than $2 billion.

As part of the deal, the telecommunications giant will get to piggyback on Microsoft’s Azure cloud service for its computing needs. It will also use Microsoft 365, which includes Office productivity software, for its workforce.

In turn, Microsoft will get to tap into AT&T’s coming 5G network to build edge-computing capabilities, such as tracking and detection system for drones.

“The companies will bring to market integrated industry solutions including in the areas of voice, collaboration and conferencing, intelligent edge and networking, IoT, public safety, and cyber security,” the firms said in its release.

The deal is a major coup for Microsoft, which will become AT&T’s “preferred” cloud vendor as it competes for market share against big guns like Amazon.com Inc’s Amazon Web Services, which is currently the biggest provider.

However, the deal isn’t exclusive.

Earlier this week, AT&T announced a separate alliance with IBM, which recently finalized its $34 billion purchase of open source company Red Hat.

As part of that arrangement, AT&T will utilize Red Hat’s open source platform to manage workloads and applications.

In turn, IBM will make AT&T Business its “primary provider of software defined networking.”