Microsoft has agreed to buy Metaswitch Networks, a provider of virtualized network software and voice, data and communications services aimed at network operators. No financial details were provided. Microsoft revealed the deal in this blog post.

This acquisition builds on Microsoft’s buy out of Affirmed Networks, which was completed on April 23rd. Metaswitch’s cloud-native communications software is expected to expand the range of offerings available for the telecom industry, especially as it moves to 5G.

Both newly-acquired companies will be used to extend Microsoft’s Azure cloud platform to both deploy and grow these capabilities at scale. The focus will be on interoperability, with radio access networks (RAN), next-generation core, virtualized services, orchestration and operations support system/business support system (OSS/BSS) modernization.

Evidently, Microsoft wants to position its Azure cloud platform as a key foundation for mobile operators’ 5G plans, providing a cloud-native and flexible platform upon which CSPs can run their network elements. That will particularly come into play as edge computing starts to play a role in distributed telco cloud platform strategies and as more and more operators strike partnerships with the cloud giants.

“As cloud and communication networks converge, Microsoft intends to leverage the talent and technology of these two organizations and extend the Azure platform to deploy and grow these capabilities at scale in a way that is secure, efficient and creates a sustainable ecosystem,” noted Microsoft in its announcement.

In acquiring Affirmed and Metaswitch, Microsoft has dramatically increased its telecoms know-how. Metaswitch in particular has a long history of innovation in the telecoms market and, as its case study pages on its website show, it works with most of the top telcos around the world. Microsoft will get a lot of ready-made relationships with this acquisition too.

In his statement on the deal, Metaswitch CEO Martin Lund stressed that heritage and deep set of telecoms industry relationships:

Throughout its history, Metaswitch has been recognized as a trusted, independent developer of critical networking software, delivering products and solutions worldwide to more than 1,000 communications service providers and network equipment providers.  We built a continuously innovative, growing, well-respected and profitable business.  We have fueled the telecommunications industry through multiple technology eras and evolutions, most recently pioneering the development of ultra-high-performance cloud native communications software.  This software is underpinning modern cloud-based communication networks, in the core and at the edge, and has driven today’s announcement with Microsoft.

I have been honored by the customers who have put their trust in us, aware that we are only as successful as those we serve and committed to delivering products and solutions that meet their needs and add real business value. We have innovated, disrupted, and delivered together.  And now, I am more excited than ever to continue our journey with the added momentum, technology, services, and people that Microsoft can bring.  We will continue to meet customers where they are, working together as communication service providers evolve their own operations.  And we’ll be ideally placed to aid those operators keen to transition to cloud native deployments, to 5G networks and to the era of compelling applications that are served from the core and edge of new network architectures.  I look forward to working with all our existing customers and new prospects alike, as we embark on the next leg of our mutual growth and evolution.

It’s hard to argue with that assessment. Metaswitch, as well as supplying telcos around the world with technology that enables key functionality such as VoIP, VoLTE, VoWiFi, session border control, robocall blocking, converged voice and data messaging and many more, it has been a leading player in developing cloud-native core network functionality that will be vital to next-generation networks and service enablement.   Metaswitch is also a big proponent of O-RAN as noted in this blog post.

But the move may also cause some unease amongst the network operators, which will want assurance from Microsoft that their relationships with Metaswitch and Affirmed will not be steered down routes they don’t necessarily prefer and, particularly in the case of Metaswitch, they will want to know that a range of traditional telecom products and services won’t suddenly get an ‘end of life’ stamp because they are not cloud-friendly.

That may not happen immediately, but the writing may be on the wall. Microsoft notes in its blog about the deal:

We have a long history of working with operators as they increasingly embrace software-based solutions and continue to support the advancement of cloud-based networking while helping create new partnership opportunities for existing network equipment providers. Our intention over time is to create modern alternatives to network infrastructure, enabling operators to deliver existing and value-added services – with greater cost efficiency and lower capital investment than they’ve faced in the past.

These two Microsoft additions to bolster Azure begs the question of what Amazon AWS and Google Cloud do to be the cloud platform partner of choice for the telcos?

References:

https://blogs.microsoft.com/blog/2020/05/14/microsoft-announces-definitive-agreement-to-acquire-metaswitch-networks-expanding-approach-to-empower-operators-and-partner-with-network-equipment-providers-to-deliver-on-promise-of-5g/

https://www.metaswitch.com/blog/metaswitch-announcement?hsCtaTracking=48fda072-ea3f-4712-8ef5-7e86b5e15ed9%7C00489af9-82b6-4491-8e58-b256ea54c7af

https://www.telecomtv.com/content/news/microsoft-affirms-its-telecom-intentions-with-metaswitch-acquisition-38670/

https://www.metaswitch.com/knowledge-center/reference/what-is-an-open-radio-access-network-o-ran