Microsoft announced that it had acquired privately-held Affirmed Networks today. This isn’t the first software/services based telecom acquisition it has made, with the 2011 acquisition of Skype being the most prominent one. Other competitors to Microsoft have made forays into the telecom market, including Facebook’s 2014 purchase of WhatsApp, Oracle’s 2013 acquisitions of Tekelec and Acme Packet.
Microsoft’s acquisition can be viewed as both collaborative with mobile network operators or competitive with them, and it certain pits the giant against telecom equipment vendors like Ericsson, Nokia and Huawei. Let me explain.
- Since Affirmed has many mobile operators as vEPC customers, Microsoft will be their software partner. In addition, as operators look to build surge capacity, they could use the Azure cloud service to run more EPC sessions over Azure without the need to purchase servers and vEPC licenses. This is what we mean by collaborative.
- However, if you take into account that mobile network operators plan to enter the enterprise market as they roll out 5G, it is possible that Microsoft may pose something of a threat. Microsoft will be able to offer EPC services to enterprises that want to operate CBRS networks, for instance.
- Since Affirmed is a relatively small market share player, in revenue terms, compared to other EPC vendors like Huawei, Ericsson, Nokia, ZTE, Cisco, Mavenir, Metaswitch and others, it turns itself into a competitor to these telecom-mainly focused vendors.
Microsoft has been making moves to serve the cellular needs of enterprises. In February, 2020, its Azure unit announced a selling deal with CBRS managed service provider, Federated Wireless. It seems that Affirmed software and/or services would match neatly with the Federated offering, as well as many others.