Nokia lands five-year extension on Microsoft Azure datacentre networking deal

Nokia has secured a five-year extension of its long-standing agreement to supply routers and switches to Microsoft Azure datacentres worldwide.

The contract will see the Finnish networking company roll out its open source SONiC-based datacentre switches to new and existing Microsoft Azure datacentres.

This is in support of the public cloud giant’s push to upgrade all its facilities from 100GE to 400GE connectivity capabilities so that it can future-proof its datacentres so they are equipped to cope with increasing amounts of data traffic in the years to come.

Nokia will also, from February 2025, start deploying the Nokia 7250 IXR-10e routes throughout Azure datacentres to enable large-scale interconnectivity.

As well as contributing to an uptick in data transfer speeds, the contract will help to improve the scalability and reliability of Azure datacentres, Nokia claimed. This is important because Microsoft has ambitious plans to grow its datacentre footprint over the coming years, as it rushes to meet the growing demand for artificial intelligence (AI) technologies from its customer base.

“The partnership will [also] grow Nokia’s global footprint to over 30 countries and strengthen its role as a strategic supplier for Microsoft’s worldwide cloud infrastructure,” the company said, in a statement.

Vach Kompella, senior vice-president and general manager of the IP networks business at Nokia, said the company is looking forward to progressing its relationship with Microsoft into a new phase, adding: “We are pleased to move to the next phase of our relationship with Microsoft by expanding the agreement’s product scope, geographical reach and time commitment to five years.

“As a result of this new deal, Nokia will further increase the scalability and reliability of Microsoft Azure datacenters around the world. This win affirms Nokia's commitment to being a strategic supplier for tier-one hyperscaler companies, and highlights that our multi-year strategic investments and approach have put us on the right trajectory.”

David Maltz, technical fellow and corporate vice-president at Microsoft Azure Networking, said the new deal will expand on the work the two firms have collaborated on together over the past six years, which has focused on developing routers running SONiC to sustainably accelerate the expansion of its datacentres.  

 “As leaders in the advancement of cloud compute, we are continuously expanding our global footprint to support the massive growth in compute workloads. Over the past six years, we have worked with Nokia’s engineers to develop their routers running SONiC to rapidly advance our expansion at the quality our customers demand,” added Maltz.

News of the deal follows on from an admission in Nokia’s most recent financial results that it is gunning for growth by targeting the datacentre market with its networking kit, with the company’s CEO Pekka Lundmark stating there exists “significant” growth opportunities in both the hyperscale and smaller ends of the market for Nokia.