Microsoft MSFT recently agreed to acquire Metaswitch Networks, a company specializing in 5G.
The acquisition will strengthen the company's cloud solutions by leveraging the Metaswitch cloud services portfolio, which includes 5G solutions for voice, data, and communications for telecommunications companies. However, the financial terms of the transaction remain secret.
Microsoft cloud platform - Azure - will be used to scale and implement Metaswitch software solutions. However, Microsoft said it will continue to support its hybrid and multi-cloud models, which indicates that Metaswitch solutions will be available on other cloud platforms.
Microsoft shares showed an annualized revenue of 14.5 percent, while the industry grew by 7 percent.
The acquisition of Metaswitch enabled Microsoft to benefit from accelerated 5G deployment and gain a strong position among telecom customers. Notably, Metaswitch boasts a strong customer base that includes major technology players such as Atos, Cisco, Dell, and others.
Moreover, the company stated that Metaswitch solutions complement Affirmed and thus provide Microsoft with cross-selling opportunities between the two acquired companies.
The company recently purchased Affirmed Networks to gain access to fully virtualized, cloud, and mobile 5G peripherals. The purchase is expected to strengthen Microsoft's position in the telecom-centric cloud computing market.
Microsoft also worked with AT&T to accelerate innovation for new 5G, cloud, and edge computing solutions. AT&T's internal 5G capabilities, combined with Azure's expertise in cloud computing, will help them develop reliable solutions for their mutual customers.
Also, the move to 5G is forcing service providers to move away from legacy systems to cloud solutions. As a result, the expansion of Microsoft's cloud portfolio bodes well for the future.
Besides, the trends in social distancing and remote work resulting from the COVID-19 outbreak are driving demand for high-speed connectivity and border networking. This is expected to help spread Microsoft solutions to service providers and other players in the network communications market.
Microsoft's peers in the cloud computing industry, including Amazon AMZN and IBM IBM, are not far behind when it comes to strengthening their presence in the growing frontier computing market supported by the 5G transition. According to Grand View Research, by 2027 the global computing space will reach $43.4 billion with a 37.4 percent CAGR.
IBM recently announced that it is using the Red Hat OpenShift platform to develop solutions such as IBM Telco Network Cloud Manager, which will help carriers upgrade their networks and increase their efficiency. Notably, IBM's solutions have already been adopted by Bharti Airtel to build an open cloud network to support 5G operations in India.
IBM is also working with Samsung and M1 to develop and test industry-specific 4.0 solutions using 5G and edge computing for Infocomm Media Development Authority (IMDA) Singapore.
Specifically, Amazon's Cloud Computing Division, Amazon Web Service (AWS), introduced AWS Wavelength, a solution that combines AWS computing and storage with a 5G network to improve infrastructure deployment efficiency. What's more, by placing resources at the edge of the network, the solution can significantly reduce latency.
In March, Alphabet's GOOGL Google Cloud announced a new strategy that will help telecom companies monetize their 5G network services by leveraging Google Cloud's computing capabilities at the border.
In partnership with AT&T, Google Cloud has created a portfolio of 5G solutions with low latency for companies operating in industries such as retail, manufacturing, and transportation.
However, Microsoft's deep focus on strengthening its cloud computing offerings is likely to strengthen its position in the border computing market with the latest developments in this area.