What does Microsoft's Metaswitch Purchase Mean for the Telecom Industry?

Microsoft is one of the biggest tech companies in the world. While most people know Microsoft for their computers and office programs, Microsoft produces a large variety of software in many different industries. Microsoft produces video games and consoles, social networks, POS software, and, of course, telecommunication software. Just this year, Microsoft acquired the British telecommunication software company Metaswitch. So what should those in the telecommunication industry know about this acquisition?

About Metaswitch

Metaswitch got started in 1981 as Data Connection Ltd and provided networking services and POS software for retail businesses. In 2000, Metaswitch was launched and the company started providing Voice over IP (VoIP) services for telephone service providers. This quickly became the main part of the business, and Metaswitch even made some acquisitions itself in the 2010s. Metaswitch still does much of their work in transitioning traditional phone services to VoIP, but the company has also been adapting to work with newer technologies such as 5G, United Communications and Collaboration (UC&C), and Voice over LTE and Wi-Fi (VoLTE/VoWiFi). Metaswitch's customers also included several big name telecommunication companies such as Sprint, Telstra, and Vodafone. Overall, Metaswitch is an established tech company that produces cutting-edge technology, so it makes sense that Microsoft would be interested in Metaswitch.

The Acquisition

The announcement of Microsoft's acquisition of Metaswitch came in May 2020, and was finalized in July. Both Microsoft and Metaswitch made announcements of this acquisition. In a post on the Metaswitch website, CEO Martin Lund stated that he was "more excited than ever to continue our journey with the added momentum, technology, services, and people that Microsoft can bring," and that the brand would continue its operations but with more resources to adapt to newer technologies and protocols. Microsoft's official statement mentioned that their acquisition of Metaswitch was part of a plan to grow the capabilities of Microsoft's Azure cloud computing services and integrate telecommunication and 5G services. The acquisition seems synergistic, and beneficial to both parties.

What does this mean for the industry?

It's clear that cloud computing is becoming more and more important for the telecommunication industry, and so is 5G technology. Microsoft's acquisition of Metaswitch is part of a trend in the tech industry — other giants like Amazon have been growing their cloud communication services. In fact, the success of Amazon Web Services (AWS) may have been motivation for Microsoft to step up its cloud computing game. Microsoft has been working with telecommunication companies who want cloud services more and more recently. Microsoft has a multi-year cloud services deal with AT&T, and has recently acquired other cloud software and 5G companies.

An important takeaway for the telecommunication industry is that the cloud and 5G are essential. While much of Metaswitch's business involved working closely with telecommunication companies and providing those services, Microsoft's interest in Metaswitch was most likely for the company's cloud infrastructure and software. AWS is a massive competitor for Microsoft, however, AWS is not heavily involved in telecommunication services yet. Cloud telecommunication represents a business sector that Microsoft can use to compete with Amazon. Additionally, this purchase may mean that Microsoft intends to own more of the growing 5G infrastructure and provide infrastructure as a service (IaaS) to telecommunication companies. This would give Microsoft a lot more say and power over service providers.

We can't know for sure what Microsoft's exact plans for 5G and the cloud are. But being able to work with these new technologies for your organization's communication and collaboration strategies is essential. If you want information or help in adapting your business to a changing telecommunication industry, CallTower is a resource for you. Our experts can help you implement and manage communication services so your business can run efficiently and effectively. To learn more about CallTower's Metaswitch solution, CT Cloud Voice, click on the link below: