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Microsoft's latest acquisition to modernise network infrastructure

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Microsoft has signed a definitive agreement to acquire Metaswitch Networks as it looks to create “modern alternatives” to network infrastructure as operators roll out 5G.

The transaction, which is currently awaiting approval, will allow Microsoft to leverage a rare opportunity to converge cloud and communication networks.

According to Microsoft’s official announcement, the draw was Metaswitch’s portfolio of ultra-high-performance, cloud-native communications software, however, Azure will also be extended to deploy and grow capabilities at scale.

Microsoft wrote: “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.”

Metaswitch, which provides virtualised network software and voice, data and communications solutions for operators, is actively developing 5G core control and data plane elements it said are “redefining performance throughput expectations for what is thought possible” for off the shelf servers running public cloud stacks.           

In April, Vodafone became the first operator to test Metaswitch’s Access Gateway Function (AGF), marking the industry’s first implementation of the 5G Wireless Wireline Convergence (WWC) AGF standard.

Microsoft believes that as networks transition to 5G, operators have the opportunity to advance virtualisation of their core networks and move forward on a path to an increasingly cloud-native future.

Aiming to capture this market, Microsoft said its focus will fall on hybrid and multi-cloud models, through continued partnerships with existing suppliers, emerging innovators and network equipment partners that will work on radio access networks (RAN), next-generation core, virtualised services, orchestration and operations support system/business support system (OSS/BSS) modernisation.

“A future that is interoperable has never been more important to ensure the success of customers and partners,” Microsoft added.

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In a letter to Metaswitch employees, CEO Martin Lund wrote: “I have been honoured 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.”

Microsoft said the announcement builds on its earlier acquisition of Affirmed Networks, which closed on April 23, 2020.

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