Microsoft has just announced that it is acquiring AT&T’s carrier-grade Network Cloud platform technology, establishing an alliance that provides a path for all of AT&T’s mobile network traffic to be managed using Microsoft Azure technologies.

Starting with the 5G core network which runs on AT&T’s Network Cloud platform, AT&T will move its mobile network to the Microsoft cloud, bringing existing and future network workloads to “Azure for Operators” – Microsoft’s telecom flagship offering.

“AT&T has one of the world’s most powerful global backbone networks serving hundreds of millions of subscribers. Our Network Cloud team has proved that running a network in the cloud drives speed, security, cost improvements and innovation. Microsoft’s decision to acquire these assets is a testament to AT&T’s leadership in network virtualization, culture of innovation, and realization of a telco-grade cloud stack,” said Andre Fuetsch, executive vice president and chief technology officer, AT&T.

Through this acquisition, Microsoft will gain access to AT&T’s intellectual property and technical expertise as AT&T’s Network Cloud platform engineering team will receive offers to join Microsoft. While AT&T will continue to operate its network and retain its customer relationships, its intellectual contribution will complement the technology skills Microsoft obtained from the 2020 acquisitions of Affirmed Networks and Metaswitch Networks to enable the delivery of its new telecom network offering.

“With Azure, operators can provide a more flexible and scalable service model, save infrastructure cost, and use AI to automate operations and differentiate customer offerings,” said Jason Zander, executive vice president Azure, Microsoft.

“Through our collaboration with AT&T, Microsoft will expand its telecom portfolio to support operators with a carrier-grade cloud that provides seamless experiences across Microsoft’s cloud and the operator’s network.”

Furthermore, Microsoft will acquire AT&T engineering and lifecycle management software used to develop and deploy a carrier-grade cloud that runs containerized or virtualized network services.