(Reuters) – Microsoft Corp and AT&T Inc on Wednesday said they reached a deal under which the telecommunications firm will tap Microsoft’s Azure cloud service for its computing needs and provide Office 365 software to much of its 268,000-strong workforce.
Under the deal, Microsoft and AT&T will also work together on so-called edge computing, which will see Microsoft technology deployed alongside AT&T’s coming 5G network for applications that need extremely small delays in passing data back and forth, such as air traffic control systems for drones. The multi-year deal is worth more than $2 billion, according to a person familiar with the matter.
Deal - Customer - Win - Microsoft - Market
The deal is a major customer win for Microsoft, which is fighting to gain market share against Amazon.com Inc’s Amazon Web Services, the biggest provider of public cloud services in which customers run their software applications in data centers managed by the cloud provider.
AT&T will continue to operate its own core networking operations for cell phones and other devices. But John Donovan, chief executive of AT&T Communications, told Reuters the deal is a fundamental shift for the telecommunications provider to become “public cloud first,” meaning that it will predominately rely on data centers built by others to power the rest of its business.
“This is one of the most far-reaching initiatives we have put together because of it being so comprehensive,” he said.
For Microsoft’s part, the company will also gain a partner...
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