Vodafone (NASDAQ: VOD) and Microsoft (NASDAQ: MSFT) announced a 10-year strategic partnership that leverages their respective strengths in offering scaled digital platforms to more than 300 million businesses, public sector organizations, and consumers across Europe and Africa. Vodafone will invest $1.5 billion over the next 10 years in cloud and customer-focused AI services developed in conjunction with Microsoft. At the same time, Microsoft will use Vodafone’s fixed and mobile connectivity services.
Microsoft also intends to invest in Vodafone’s managed IoT connectivity platform, which will become a separate, standalone business by April 2024. The new company expects to attract new partners and customers, and drive applications growth and connectivity to more devices, vehicles, and machines.
Margherita Della Valle, Vodafone Group chief executive, comments, “This unique strategic partnership with Microsoft will accelerate the digital transformation of our business customers, particularly small and medium-sized companies, and step up the quality of customer experience for consumers.”
Satya Nadella, chairman and CEO, Microsoft adds, “Together with Vodafone we will apply the latest cloud and AI technology to enhance the customer experience of hundreds of millions of people and businesses across Africa and Europe, build new products and services, and accelerate the company’s transition to the cloud.”
The companies point out that key aspects of the partnership include:
- Transforming the customer experience using Microsoft Azure OpenAI to deliver real-time, proactive, and highly-personalized experiences to customers. The company says that Vodafone employees will also be able to leverage the AI capabilities of Microsoft Copilot to transform working practices, boost productivity and improve digital efficiency.
- Scaling its new standalone IoT business with Microsoft which connects 175 million devices and platforms worldwide. As part of the Azure ecosystem, Vodafone will make its IoT platform available to a vast developer and third-party community using open APIs.
- Expanding Vodacom’s M-Pesa financial technology service to improve financial inclusion for 100 million consumers and one million SMEs across Africa.
- Growing enterprise business with new Microsoft services for small and medium-sized businesses (SMEs), including Microsoft Azure, security solutions and modern work offerings such as Microsoft Teams Phone Mobile.
- Accelerating Vodafone’s cloud transformation by replacing multiple physical data centers across Europe with virtual ones using Microsoft Azure to simplify and reduce IT operating costs as well as reducing energy requirements and implementing its sustainable business strategy.
On the data center transition, Vodafone told The Register: “This is about moving tens of thousands of servers from our on-prem data centers to the cloud. This is a multi-year program. Our core network workloads stay on-prem.”
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