AT&T Clouds Up Microsoft Deal: “We are not outsourcing our core network function”

AT&T Clouds Up Microsoft Deal: “We are not outsourcing our core network function”

When AT&T announced recently that Microsoft was buying its 5G Network Cloud core software and moving it to Microsoft’s cloud, there were a few in the tech press who concluded that AT&T was throwing in the towel and admitting it did not have the scale or resources to compete with the hyperscale cloud providers. Now in a plot twist, Jeff McElfresh, AT&T Communication’s CEO has used his company’s second-quarter 2021 earnings call to say more or less the opposite.

“What this deal essentially does is it brings Microsoft to the edge of our network and supporting our network workloads, at a scale level for efficiency,” McElfresh said on the call. “One thing that we’re not doing, and I’ve kind of read this in the trade, in the press a bit, is we’re not outsourcing our core network function,” he continued.

“We’re relying upon Microsoft to develop a scaled compute and storage capabilities at the edge while we retain control of our network stack and the kinds of services and products that we’re going to offer to the market,” McElfresh explained.

AT&T’s press release explicitly said the company’s 5G mobile network will be moved to Azure and that the alliance provides a path for all of AT&T’s network traffic to be managed using Microsoft Azure technologies.  Of course, vendor press releases should always be treated with skepticism, especially when they concern deals with desirable customers like AT&T, but this release went out with AT&T’s blessing. Perhaps AT&T wanted to say something on the lines ‘We own and operate the network, but Microsoft has everything above Layer 2.’ It’s a plausible and understandable message but a confusing way of putting it out to the market.

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