Recently, AT&T announced two cloud deals with tech giants, Microsoft and IBM. The telco considers Microsoft as its preferred cloud provider for non-network applications in the public cloud. Similarly, AT&T will let IBM migrate a few of its private cloud applications to its cloud platform.
Deal with IBM
IBM’s deal with AT&T is more straightforward and opaque than Microsoft’s. IBM will facilitate management of AT&T’s “hybrid” cloud infrastructure, which merges part of its private cloud with public cloud services. AT&T will also utilize IBM’s Red Hat open source platform to manage its internal applications.
Migrating to Public Cloud with the Help of Microsoft
By 2024, AT&T aims to migrate most of its non-network infrastructure applications to the public cloud. The migration, which Microsoft’s Azure will handle as a “preferred” (but not exclusive) cloud provider, could help AT&T to free up its resources and enable it focus more on expanding its core networks, streamlining its workforce, and cutting costs.
AT&T will also move most of its 280,000-employee workforce to Microsoft 365, the cloud-based suite. The suite bundles together Windows 10, Office 365, and Enterprise Mobility + Security. Additionally, Microsoft will design, test, and build new edge computing services on AT&T’s new 5G networks.
The companies didn’t disclose the terms of the deal, but according to reports, it may be valued at over $2 billion. That represents a significant benefit for the commercial cloud business of Microsoft. The business has grown from 41% year-over-year to $9.6 billion in the third quarter, or 31% of the tech giant’s top line.