Why Microsoft Purchased Metaswitch

In 2013, Metaswitch asked carriers if they were ready to be a software telco. NFV or network function virtualization became all the rage and the company was at the forefront. The idea was to get away from proprietary hardware and have the telco be more like the cloud-based competitors they were fighting against.

This is what we wrote seven years ago:

In a recent conversation with Steve Gleave and Carol Daniels of Metaswith at Mobile World Congress 2013, I learned the company is taking the move to virtualization seriously and their recent product launch of 19 months ago – the SBC, was developed to run in a such an environment.

The benefits of this evolution are obvious – carriers will be able to utilize the same virtualized technology they use in their data centers in their networks and purchase in a far more flexible way. Moreover, their services will run on bare-metal servers and will scale far more rapidly. This means they can take advantage of public clouds, virtual private clouds, private clouds and hybrid clouds – all the amazing choices a typical enterprise has today. Security, cost and CAPEX versus OPEX decisions will likely drive their decisions – again, just like an enterprise or data center decision-maker.

Later in 2013, the company rolled out Project Clearwater – their open-source SBC and NFV solution which helped allowed Metaswitch to get larger carrier customers.

Metaswitch has always been at the forefront of working with carriers to ward off the competition from the OTT solution providers like WhatsApp and a host of others. At Metaswitch Forum in 2011 – the company made a big push to wake carriers up and warn them of the continuing threat.

It was the following comment made at the event that seems to resonate with us most as we take a walk down Metaswitch memory lane:

Apple is the biggest competitor to the carriers.

Metaswitch rolled out Max UC to help carriers compete with social networks and other OTT providers. The idea is integrating the UC experience into the device far more deeply than an OTT solution can accomplish. For example, in the dialer. The idea is a better quality of experience and voice will cause businesses to buy the service and give the carrier recurring revenue.

TMC’s Rich Tehrani speaks with Chris Carabello, Sr. Dir Product Marketing with Metaswitch at the #TechSuperShow 2020 in Ft. Lauderdale FL.

At the recent TECHSUPERSHOW in Fort Lauderdale, Florida, Metaswith’s Chris Carabello discussed the success of the company’s Max UC solution.

Microsoft is acquiring Metaswitch. There are so many reasons this makes sense. Getting deep telecom experience is one. Amazon has been working hard to ensure AWS is the premiere telecom cloud. Oracle has made many telecom purchases over the years meaning they too have solid experience in the space.

As telcos move more network functions to the cloud, Microsoft is now in a better position than ever to get this recurring revenue.

In addition, there is Max UC and Teams integration potential. Carriers can now sell Teams as their business UC solution.

In 2017, Mark Straton with Broadsoft made the following prediction on the ITEXPO keynote stage:

The future will be Broadsoft versus Microsoft – ostensibly – everyone else will be gone.

Soon thereafter, Cisco purchased Broadsoft. Now Microsoft is purchasing Broadsoft competitor Metaswitch.

Ribbon is a remaining big player – no doubt, Amazon or Google may be thinking about acquiring them to keep pace.

We will see.

In the meantime, the march towards the pure software telco continues… Pandemic be dammed.

The following is an excerpt from the blog of Yousef Khalidi – Corporate Vice President, Azure Networking discussing the deal:

As the industry moves to 5G, operators will have opportunities to advance the virtualization of their core networks and move forward on a path to an increasingly cloud-native future. Microsoft will continue to meet customers where they are, working together with the industry as operators and network equipment providers evolve their own operations.

We will continue to support hybrid and multi-cloud models to create a more diverse telecom ecosystem and spur faster innovation, an expanded set of unique offerings and greater opportunities for differentiation. We will continue to partner with existing suppliers, emerging innovators and network equipment partners to share roadmaps and explore expanded opportunities to work together, including in the areas of radio access networks (RAN), next-generation core, virtualized services, orchestration and operations support system/business support system (OSS/BSS) modernization. A future that is interoperable has never been more important to ensure the success of customers and partners.

By enabling advancements in enhanced mobile broadband, ultra-reliable low latency communications and massive machine-type communication to enable IoT at scale, 5G offers significant potential for enterprises and governments and in turn creates new opportunities for operators. 5G will ultimately give operators a path to accelerate service innovation and deliver new transformative experiences that are faster, more resilient and more secure, spurred on by software advances to drive transformation at scale.

As the industry moves to 5G, operators will have opportunities to advance the virtualization of their core networks and move forward on a path to an increasingly cloud-native future. Microsoft will continue to meet customers where they are, working together with the industry as operators and network equipment providers evolve their own operations.

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