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Here's what Microsoft's deal with AT&T could mean for its bottom line

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Microsoft logo (Image credit: Daniel Rubino / Windows Central)

What you need to know

  • Microsoft recently announced Azure will be handling AT&T's mobility network.
  • The contract could result in over $1 billion per year in Azure revenues, according to analyst insights.

Microsoft is hard at work injecting the power of Azure into anything and everything it can. Just recently, we saw the company figure out how to meld Azure with chocolate via its enhanced partnership with Mars, and now we're seeing its cloud service's presence boom with AT&T via a new strategic alliance.

Here's a quick excerpt from Microsoft's press writeup (opens in new tab) to get you up to speed on the deal: "AT&T will move its 5G mobile network to the Microsoft cloud. This strategic alliance provides a path for all of AT&T's mobile network traffic to be managed using Microsoft Azure technologies."

The benefits for Microsoft are access to AT&T's IP, and the growth of Azure for Operators (opens in new tab). There's also the monetary aspect to consider.

According to Rosenblatt Securities analyst John McPeake, Microsoft's AT&T alliance could net the tech giant's Azure service over $1 billion per annum as the years go on (via Benzinga). The deal is predicted to hold "measurable impact" as an easily financially defineable boon for Microsoft.

This financial analysis is noteworthy given that Microsoft and AT&T did not disclose the specific monetary details of their strategic teamup. "Microsoft will assume responsibility for both software development and deployment of AT&T's Network Cloud immediately and bring AT&T's existing network cloud to Azure over the next three years," the Microsoft presser reads. "The companies are not disclosing details on financial terms."

McPeake's insights on the deal's financial optics help give an idea of its scope alongside other major Microsoft deals (such as its $10 billion JEDI Pentagon contract).

Robert Carnevale is the News Editor for Windows Central. He's a big fan of Kinect (it lives on in his heart), Sonic the Hedgehog, and the legendary intersection of those two titans, Sonic Free Riders. He is the author of Cold War 2395. Have a useful tip? Send it to robert.carnevale@futurenet.com.

4 Comments
  • "The benefits for Microsoft are access to AT&T's IP, ..."
    ... and the return of telephony capabilities to Windows, perhaps? ;-)
  • Probably not. It's really a one way move. AT&T is looking to upgrade on the cheap and MS is looking for even more new revenue streams. 😲
    This is more of an extension of Microsoft's systems management tools and datacenter expertise. And moving AT&T to Azure tech. Not too different from JEDI.
  • 😮 Azure is really eating everything isn't it?
  • Not *everything*. AWS still has more customers.
    But MS has the bigger more profitable ones. Even with all the tomfoolery over JEDI getting it cancelled. They're cherry picking mergers, alliances, and customers.
    Two big coups were picking up NUANCE and signing up to STARLINK first. Google followed them to STARLINK but AWS can't.
    Once STARLINK kicks in it'll open even more business to AZURE.
    That market is quickly becoming two thoroughbreds sprinting followed by a bunch of nags huffing and puffing. If you want to taste real fear, consider that as fast as MS is spending their cash hoard, they're making even more cash. To make a real dent in the hoard, they'd have to buy a controlling interest (at least) In Warner Bros Discovery. It would open a big new client for Azure plus bring in a bunch of more game studios and IP. And a movie studio and another subscription service on on tbe side. :D Hmm, the AT&T connection would be useful for that.
    They'd still have more money left over than anybody this side of Apple.