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July 17, 2019 02:49 pm

Microsoft, AT&T Sign Cloud Deal Worth More Than $2 Billion

Microsoft and AT&T on Wednesday said they reached a deal under which the telecommunications company will tap Microsoft's Azure cloud service for its computing needs and use Microsoft 365, which includes Office productivity software, for much of its 268,000-strong workforce. From a report: Under the deal, Microsoft and AT&T will also work together on so-called edge computing, which will see Microsoft technology deployed alongside AT&T's coming 5G network for applications that need extremely small delays in passing data back and forth, such as air traffic control systems for drones. The multi-year deal is worth more than $2 billion, according to a person familiar with the matter. The agreement is a major win for Microsoft, which will become AT&T's "preferred" cloud vendor and is fighting to gain market share from Amazon Web Services, the biggest provider of public cloud services. Cloud service customers run their software applications in data centers managed by the cloud provider. AT&T will remain responsible for its own core networking operations for cell phones and other devices. But John Donovan, chief executive of AT&T Communications, told Reuters the deal is a fundamental shift for the telecommunications provider to become "public cloud first," meaning that it will predominately rely on data centers built by others to power the rest of its business.

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