Microsoft is acquiring Metaswitch Networks to expand its Azure 5G strategy
Just weeks after announcing an agreement to acquire 5G specialist Affirmed Networks, Microsoft is making another acquisition to strengthen its cloud-based telecommunications offering. You are acquiring Metaswitch Networks, a UK provider of cloud-based communications products used by network operators and providers (customers include people like BT in the UK, Sprint and the virtual network consortium RINA.
The terms of the deal were not disclosed in today’s announcement. Metaswitch investors included physical education companies Northgate and WRV, Francisco Partners and Sequoia, but it is unclear how much it had raised or its latest valuation. (The company has been around since 1981.)
The deal speaks to a growing focus of technology companies leveraging cloud architectures and adopting new network technologies, specifically 5G, to capitalize on a larger role in becoming service providers for both operators and those who They want to build similar services to operators (potentially bypassing telecoms companies in the process), through the offering of virtualized products delivered from their cloud.
It comes just a day after Rakuten, the Japanese e-commerce and streaming services giant, announced that it would acquire Innoeye, another specialist in cloud-based communications services. Others, like Amazon, have also been developing their offerings on AWS serving the same market.
Microsoft describes Metaswitch’s cloud-native portfolio of services, which includes 5G data, voice and unified communications (contact center) products as “complementary” to Affirmed.
“Microsoft intends to leverage the talent and technology of these two organizations by extending the Azure platform to deploy and scale-up these capabilities in a safe, efficient, and sustainable way to create a sustainable ecosystem,” the company said.
Migration to 5G represents a window of opportunity for companies that provide services to operators. The latter have long been loaded with expensive and outdated equipment and now have the potential to replace some or all of that with software-based services, delivered via the cloud, that can be more easily updated and modified with market demand. That is hope, at least. The reality may be that many carriers deplete their assets and upgrade in small increments, since operating expenses still represent a large investment and cost.
Microsoft is well aware of that reality and also of the possibility of appearing as a threat, not as a savior.
“We will continue to support hybrid and multiple cloud models to create a more diverse telecommunications ecosystem and drive faster innovation, an expanded set of unique offerings, and greater opportunities for differentiation,” he says. “We will continue to partner with existing providers, emerging innovators and network team 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 / modernization of the business support system (OSS / BSS). An interoperable future has never been more important in ensuring customer and partner success. ”
In fact, Microsoft has been providing services and selling its own IT through carriers for years before this. However, these latest acquisitions represent a growing focus on the role it can play in that business vertical for years to come.