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The $1.5 billion deal will see Vodafone replace its European data centres with virtual ones provided by Microsoft Azure
Vodafone and Microsoft have this week signed a ten-year strategic partnership to offer scaled digital platforms to over 300 million businesses, consumers, and public sector organisations across Europe and Africa.
Vodafone will invest $1.5 billion over the next decade in cloud and customer-focused AI services developed in collaboration with Microsoft. As part of the deal, Microsoft will use Vodafone’s fixed and mobile connectivity services, and Vodafone will move its cloud services over to the Microsoft Azure platform.
Microsoft is also set to invest in Vodafone’s managed IoT connectivity platform, which will become a separate business by April this year, as well as supporting Vodafone’s mobile money platform M-Pesa in Africa.
The deal will mainly incorporate five areas of collaboration:
- Generative AI: Incorporating Microsoft Azure’s OpenAI solutions across all Vodafone’s operations, increasing employee efficiencies and enhancing customer
- Scaling IoT: Microsoft will invest in Vodafone’s upcoming standalone IoT platform, which connects 175 million devices and platforms globally.
- Africa digital acceleration: Microsoft will help to scale up M-Pesa (the largest financial technology platform in Africa) by housing it on Azure, allowing the launch new cloud-native applications.
- Enterprise growth: Vodafone will continue to distribute Microsoft’s offerings as part of its aim to become Europe’s leading business platform.
- Cloud transformation: Vodafone’s data centres will be modernised to improve customer response times using Microsoft Azure, including, in some cases, replacing physical data centres with virtual ones.
“This unique strategic partnership with Microsoft will accelerate the digital transformation of our business customers, particularly small and medium-sized companies, and step up the quality of customer experience for consumers,” said Margherita Della Valle, Vodafone’s CEO in a press release.
“This new generation of AI will unlock massive new opportunities for every organisation and every industry around the world,” added Satya Nadella, chairman and CEO of Microsoft.
“We are delighted that together with Vodafone we will apply the latest cloud and AI technology to enhance the customer experience of hundreds of millions of people and businesses across Africa and Europe, build new products and services, and accelerate the company’s transition to the cloud,” he continued.
Upon the news, Vodafone shares rose 0.7%.
Back in October last year, the UK communications regulator Ofcom referred the UK’s public cloud infrastructure to the Competition and Markets Authority (CMA) over concerns that market leaders Amazon and Microsoft are too dominant, given their combined market share of 70–80%. The CMA are now conducting a market investigation, exploring concerns that the firms unfairly disincentivise customers from switching to smaller providers. See the full Ofcom report here.
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