AT&T Goes Deeper Into the Cloud With Microsoft Azure Deal
July 17 2019 - 9:07PM
Dow Jones News
By Agam Shah
AT&T Inc. said Wednesday that it is shifting most internal
business applications used by its biggest unit to Microsoft Corp.'s
Azure cloud, an effort to cut costs and free up resources for
network development. Terms of the deal weren't disclosed.
Microsoft's deal with AT&T Communications, which had revenue
of $144.6 billion in 2018, involves moving data-center
infrastructure and applications to the Azure cloud. As part of the
agreement, AT&T Communications will have its employees use
Microsoft's cloud-based productivity tools and services.
The AT&T Communications unit includes mobile, broadband,
entertainment and enterprise consulting services. The
communications division generated nearly 85% of the company's
revenue in 2018.
The deal comes one day after International Business Machines
Corp. said that AT&T would move internal applications used by
its $37 billion-a year-business services unit to IBM's cloud.
Like many companies, AT&T is moving away from owning and
operating its own IT infrastructure so it can derive benefits of
renting software and computing resources over the internet. That
arrangement, known as cloud computing, can include the advantages
of greater scale and up-to-date tools, providers maintain.
Some large companies build their own clouds for private use.
Microsoft Azure is known as a public cloud because it sells its
services to others. AT&T said it wants to move a majority of
its non-network applications to public clouds by 2024.
The deal with Microsoft will help the company innovate,
according to Steve Stine, senior vice president of business
transformation at AT&T.
Management of applications will be faster in the cloud, and the
company will benefit from being able to focus more resources on
higher-priority investments such as building network capacity, Mr.
Stine said. "That is fundamental to our success and serving our
customers going forward," he told CIO Journal.
From 2014 to 2018, AT&T invested more than $130 billion in
wireless and wireline networks.
Those investments include next-generation 5G wireless
technology, which provides faster mobile connections and supports a
proliferation of new internet-connected sensors in objects and
machines.
AT&T already is working with Microsoft to test and deploy 5G
applications that take advantage of the Azure cloud, Mr. Stine
said. So-called edge computing devices such as sensors and drones
are expected to make use of 5G. To facilitate these 5G
applications, the companies are exploring ways to bring computing
power and services closer to the edge of the network, Mr. Stine
said.
Last month, AT&T and Microsoft announced a pilot program
that applies artificial intelligence and the Internet of Things to
real-time safety monitoring of drones, according to Mr. Stine.
"They can rapidly deliver value-added services over their 5G
network -- that's the transformational value AT&T gains," said
Deepak Mohan, research director at International Data Corp.'s
enterprise infrastructure practice.
Write to Agam Shah at agam.shah@wsj.com
(END) Dow Jones Newswires
July 17, 2019 20:52 ET (00:52 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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