Microsoft buying Metaswitch, ‘setting the table’ for major 5G play

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Microsoft buying Metaswitch, ‘setting the table’ for major 5G play

Microsoft on Thursday revealed an agreement to purchase U.K.-based Metaswitch Networks, telegraphing with its second networking acquisition in rapid succession a major commitment to building out the Azure Cloud as an end-to-end platform that advantages its ecosystem for the coming 5G era.

The deal for Metaswitch makes clear Microsoft is looking down the road to the business realities of a world of fast-connectivity and pervasive coverage—a shift that Microsoft partners tell CRN will certainly drive opportunities for them to deliver cutting-edge solutions and reach new markets.

The extension of Azure’s networking layer from data center to device with Metaswitch technology “creates a whole new potential revenue stream for partners who will write applications to run on the 5G network,” said Ric Opal, principal and national GTM and strategic partnerships leader at BDO Digital.

“This is a platform play,” Opal said. “They’re setting the table.”

Microsoft did not disclose the price it agreed to pay for Metaswitch in a deal that comes on the heels of one reached in March for Affirmed Networks, an Acton, Mass.-based developer of wireless network virtualization software for telecoms. That acquisition was finalised three weeks ago.

Both networking software developers have telecommunications giants in their books of business, including AT&T as an Affirmed customer, and British Telecom as one with Metaswitch.

While both companies provide cloud-native software that enables 5G deployments across modern infrastructure, their portfolios are complementary, Microsoft’s Yousef Khalidi, corporate vice president for Azure networking, wrote in a Microsoft blog.

“Microsoft intends to leverage the talent and technology of these two organizations, extending the Azure platform to both deploy and grow these capabilities at scale in a way that is secure, efficient and creates a sustainable ecosystem,” Khalidi said.

Metaswitch sells specialized software that virtualizes core 5G network functions, along with an application catalog of voice, data and contact center solutions. That portfolio “will expand our range of offerings available for the telecommunications industry,” Khalidi said.

“The convergence of cloud and communication networks presents a unique opportunity for Microsoft to serve operators globally via continued investment in Azure,” he said.

Metaswitch’s significant set of proprietary technology and highly specialized skills will further enable Microsoft to seamlessly integrate Azure with the backbone networks of telecoms, said Ben Mead, chief information security officer at Credera, a Microsoft partner headquartered in Dallas, Texas.

“Every cloud provider in the game is looking for ways to be at the forefront of exploiting the possibilities of 5G and the edge computing opportunities that high-speed mobile communications will unlock,” Mead told CRN.

Those developments “will drive an incredible opportunity for technology and systems integration partners,” he added.

The accumulation and consolidation of networking technologies will also help Azure become a truly global platform, expanding its reach—and that of its partners—into nascent markets in Africa and Southeast Asia currently limited by network availability, Mead told CRN.

As 5G fuels an explosion of novel use cases, from autonomous vehicles to smart cities to virtual reality, cloud providers are hotly competing to win business from telecoms increasingly abandoning data center expansion plans and looking instead to move workloads to public cloud. Network virtualization technology allows them to scale traffic capacity with commodity computing resources, achieving more efficient deployments and maintenance of those workloads.

But Microsoft’s back-to-back networking plays are about more than expanding its roster of telecom customers. With Metaswitch and Affirmed under its roof, Microsoft is preparing to empower a larger ecosystem of application developers for the 5G era, Opal of BDO Digital, told CRN.

A pervasive coverage model, and a simultaneous increase in network speed, will make it possible for those Microsoft partners to develop, modernize, or just bring to market new IoT solutions, and to help enterprises launch digital transformation initiatives on Azure previously limited by bad connectivity, Opal said.

That translates to a unique opportunity to grow their businesses, he said.

“If they can use these two acquisitions now to ultimately create opportunities for partners to drive revenue, and to also improve a customer experience, I think it’s smart for them,” Opal said.

This article originally appeared at crn.com

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