Editor's corner—Microsoft 'friends' the telecom industry

Microsoft CEO Satya Nadella, left, is posing for a lot of pictures with Microsoft's new partners. Here he is with AT&T Communications CEO John Donovan. (AT&T/Microsoft)

Prior to current CEO Satya Nadella taking the helm in 2014, Microsoft wasn't known for its willingness to partner with other companies.

Instead of insisting that the rest of the world subscribe to its products and services, Microsoft has been branching out under Nadella's reign.

RELATED: India's Reliance teams up with Microsoft Azure on 10-year alliance

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Microsoft is now striking up partnerships at a fast clip. Yesterday's 10-year alliance with Reliance Industry, which is the owner of telecom Jio, is the latest example of Microsoft's willingness to team up with other companies.

The Reliance partnership will disrupt the cloud market in India by putting Amazon Web Services and Google on notice that Microsoft Azure means business. And Microsoft is willing to do so by offering low prices that the other two large cloud providers will have to beat or match. In a country brimming with startups, Microsoft Azure is on hand to help India's companies develop and store new apps and services in their own language that are accessible via its cloud.

Microsoft also a struck a deal reportedly worth billions with AT&T last month that will allow the telco to continue to improve its cost efficiencies by putting the rest of its functions into the cloud once it has reached its goal of 75% network virtualization by next year. That deal is reportedly worth billions, and it also allows AT&T to be the selling conduit for Microsoft Azure's applications and services. 

Microsoft was named as AT&T's preferred cloud provider for non-network applications as part of the telco's broader "public cloud first" strategy. Microsoft also will throw its support behind AT&T's efforts to consolidate its data center infrastructure and operations.

Also in July, Microsoft announced it was investing $1 billon with San Francisco-based research firm OpenAI to develop large-scale AI solutions for Microsoft Azure as well as a Microsoft partnership with IT services vendor DXC Technology.

In May, South Korea's SK Telecom and Microsoft announced they had signed a memorandum of understanding (MOU) to jointly develop 5G, artificial intelligence (AI) and cloud solutions for SK Telecom's customers.

Among those announcements, Nadella can be seen in the press releases posing with AT&T Communications CEO John Donovan, OpenAI CEO Sam Altman and SK Telecom CEO Park Jung Ho.

While those announcements came on the Azure side of the house, Microsoft announced last week that the Samsung Galaxy Note 10 would come with Windows 10 apps installed directly on the phones. Microsoft has also benefitted from making Minecraft available on Sony’s PlayStation, which competes with Microsoft’s Xbox gaming consoles. 

Despite the heated rivalry, earlier this year Microsoft and Sony announced they were teaming up on cloud-based gaming and AI solutions.

RELATED: Microsoft’s cloud business is kicking it

The results of Microsoft's collaborative efforts are showing up several ways. Last month, Microsoft reported revenue of $33.72 billion for its fiscal fourth quarter 2019, an increase of 12% compared to the same quarter the previous year, beating Wall Street estimates. Microsoft said its cloud revenue, which includes Azure and other elements, grew 64% in the latest quarter compared to the previous year.

While Azure still trails Amazon Web Services in the cloud space, it's closing the gap in the infrastructure-as-a-service (IaaS) sector, according to Alan Weckel, founding analyst for 650 Group. John Dinsdale, a chief analyst at Synergy Research Group, said last month that Microsoft was less than a quarter the size of Amazon in the cloud market in early 2016, but today it's close to being half the size.

At my first telecommunication journalism job we featured Bill Gates on the cover as "BillGatus of Borg" because "resistance was futile," but those days are long over.  Maybe the cover for today, if we actually had a magazine, would be a picture of Nadella with his hand extended and a headline of  "Why can't we be friends?"

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