Microsoft sells Metaswitch to Alianza

The acquisition will give Alianza a combined customer base of more than 1,000 communications service providers, including 19 of the top 20 global operators, claims the release, and the combined portfolio of services will “streamline the path to a cloud-orchestrated, AI powered communications future,” no less.

“Over the past decade, service providers have been placing a multi-trillion dollar bet that improving network capacity would result in revenue growth, but the bet hasn't yet paid off,” states the release, asserting that revenues for operators have stagnated and service providers have “neglected their patchwork of legacy infrastructure, technology, and systems, creating a massive gap in their ability to maintain, let alone grow services revenue.”

You’d certainly get a lot of agreement from operators on that front – many of whom have been vocalizing for years the inability to recoup the huge investments in rolling out 5G networks with meaningfully higher contract revenues.

What Alianza is pitching in this regard, freshly armed with Metaswitch in its back pocket, is things like on-premises, public, private, or hybrid cloud, and consolidation of complex voice operations onto a single operating platform.

"The acquisition of Metaswitch is about resetting the playing field and enabling service providers to reassert their market leadership," said Brian Beutler, founder and CEO, Alianza. "The Alianza cloud communications platform empowers operators to monetize network investments through improved customer experiences and the delivery of modern, high-margin communications service offerings."

Rohit Mehra, group vice president, Worldwide Network and Telecommunications, IDC was drafted in to give comment on the combined businesses: "Today, global operators face increasing competitive threats from OTT communications companies, whose services are gradually eroding their long-held position as market leader in the delivery of voice and collaboration services.

“The combination of the Metaswitch business with Alianza brings together a deep portfolio of services and expertise with proven cloud technology and product innovation to deliver end-to-end capabilities for service providers to modernize at their own pace."

Microsoft acquired Metaswitch back in 2020, hot on the heels of acquiring Affirmed Networks, seemingly signalling its serious intentions towards the telco cloud. Later that year it’s intentions were firmed up by the creation of its Azure for Operators offering and in a blog post by Jason Zander, Azure EVP, which said: “We’re building a carrier-grade cloud and bringing more Microsoft technology to the operator’s edge.”

However there seems to have been a subsequent decision to scale back this ambition somewhat – earlier this year Telecoms.com sister site Light Reading described a ‘telecoms retreat’ at the firm, quoting CEO of Award Consulting, who previously worked for Metaswitch, as saying: "They are saying we are shifting our focus from the network function layer to partnerships with industry leaders of these capabilities."

"They talk about still being committed to telecom. As you read what that means, it becomes clear that they still want to provide the infrastructure – they want Azure to be used for telecoms, and they want to drive AI services as well to the telecom operators – but they don't want to provide these network functions, basically the applications. They don't want to be in the business of providing the applications, just the infrastructure. So that's a big shift."

Yousef Khalidi, Microsoft Corporate Vice President, insisted telecoms remains a priority for the firm in today’s release: "Alianza's commitment to innovation and customer experience sets a strong foundation for Metaswitch customers to continue to grow their business. The telecommunications industry remains a priority for Microsoft, and we will continue to empower telecom operators to modernize, monetize, and innovate through our secure AI platform. As we advance our cloud platform and AI capabilities, partners like Alianza are crucial for providing support to our mutual customers."