Microsoft to acquire Metaswitch in telecom business push

Microsoft has agreed to acquire Metaswitch Networks, a telecom software company. Terms of the deal weren’t disclosed.
Microsoft India for televisionMicrosoft is becoming a telco network powerhouse with a relentless appetite for acquisitions. The acquisition of Metaswitch follows their recent acquisition of Affirmed Networks and extends Microsoft’s cloud expertise to the telecoms domain –  blurring the lines between webscale companies and telecom operators.

The move shows Microsoft’s efforts to target a single industry through inorganic deals rather than building expertise and technology in house. These efforts could help Microsoft gain further adoption of its Azure public cloud, which challenges market leader Amazon Web Services.

“The convergence of cloud and communication networks presents a unique opportunity for Microsoft to serve operators via investment in Azure, adding depth to our hyperscale cloud infrastructure with the specialized software required to run virtualized communication functions, applications and networks,” Yousef Khalidi, corporate vice president at Microsoft, wrote in a blog post.

Metaswitch has a 5G product for handling network traffic that can run on public cloud infrastructure. Customers could rely on the company’s software atop cloud infrastructure rather than adding capacity in their own data centers to support additional network use at higher speeds.

Microsoft three weeks ago closed its acquisition of Affirmed Networks, a technology start-up targeting mobile carriers. Last year Microsoft itself announced a multi-year cloud deal with US-based telecom giant AT&T.

Customers of Metaswitch include British Telecom, Sprint (which is now owned by T-Mobile), Swisscom, Telstra and Vodafone.

Metaswitch has nearly 700 employees, according to LinkedIn. The company was founded in 1981 and has headquarters in London and Los Altos, California. Investors of Metaswitch include Sequoia Capital.

Microsoft’s expertise in cloud infrastructure, and specialized cellular network technology, will likely create major competition to established vendors, Don Alusha, principal analyst at tech market advisory firm, ABI Research, said.