Telstra and Microsoft deepen cloud and connectivity ties

Telstra and Microsoft have deepened ties in a wide-ranging deal that will boost connectivity in Asia-Pacific and speed up the telco’s cloud migration efforts, among other areas.

As part of the five-year agreement, Telstra will become the largest supplier of network capacity on terrestrial fibre in Australia for Microsoft, which will, in turn, become an anchor tenant on Telstra’s new intercity fibre network.

Microsoft said it will also explore boosting its capacity on Telstra’s Asia-Pacific subsea cable network. Through these investments, the tech giant expects to achieve full-fledged connectivity across key telecommunications routes in Australia and across Asia-Pacific.

This will provide more bandwidth and reduce latency for users of Microsoft services such as the Teams communications application and the Xbox gaming service, it added.

The pact, one of the largest of its kind between Microsoft and a telco globally, will help Telstra speed up migration of its internal IT workloads to public cloud. Telstra will designate Microsoft Azure as a preferred cloud partner as part of its multicloud strategy.

Telstra, which plans to have 90% of its applications on public cloud services by 2025, will also start a Microsoft practice at Telstra Purple, its managed services and technology consulting business, to serve joint customers by combining Microsoft’s cloud, edge and modern work offerings with its network services.

For a start, it will launch offerings to help organisations with hybrid working and cloud migration, initially focusing on those in manufacturing, retail, agriculture, utilities and finance.

Meanwhile, the two companies said they will continue to build products that marry cloud and network services. They recently co-developed Branch Offload, a 5G-enabled edge computing offering that blends Telstra’s 5G and fixed connectivity with Microsoft Azure Stack Edge.

Telstra CEO Andrew Penn noted that the deal with Microsoft will “turbocharge how we deliver compelling, all-digital experiences”.

“The pervasiveness of technology in businesses today and its ability to transform their operations, improve productivity, reduce their environmental impact and meet evolving customer needs means there’s no one-size-fits-all solution.

“Beyond our network, one of our biggest differentiators is our 2,000-strong Telstra Purple team of technology experts who partner with businesses to design, deliver and manage solutions across cloud, cyber security, software development, data and AI [artificial intelligence], and workplace technologies.

“Our strategic partnership with Microsoft is on a scale not seen before in Australia, and it will be Australian businesses who will benefit at a time when the urgency to digitise and transform their operations has never been greater,” he said.

Microsoft and Telstra will work together over the coming months to finalise the detailed scope of this expanded partnership.