Vodafone’s IoT connectivity unit is to become a standalone business by April of next year (2024) following a major 10-year deal with Microsoft that will see both firms invest in the business, and the UK-based operator also commit $1.5 billion over the period to develop cloud and AI services with the US firm. Microsoft has also committed to use Vodafone’s fixed and mobile connectivity services in some fashion in return.
Vodafone will join the Azure ecosystem, making its IoT platform available to Microsoft’s developer and third-party community via open APIs. It will also mainstream Microsoft’s generative AI (OpenAI) across “all Vodafone customer touchpoints”, and its Copilot system for internal processes. A statement said: “The new company will attract new partners and customers… to connect more devices, vehicles, and machines.”
The deal is described as “far-reaching”, focused on scaling Vodafone’s managed IoT platform to “300 million” private enterprises, government agencies, and consumers, as well as integrating generative AI mostly for “customer experience”. Curiously, the geographical remit is mainly “Europe and Africa”, and not more global, according to a joint statement. The pair will focus “particularly” on small and medium sized enterprises (SMEs) in these regions.
“Vodafone [will] grow enterprise business with new Microsoft services for SMEs”, they said. There is a reference in the press statement to “new digital and financial services for businesses”, and hooking up Vodafone’s data centres to Azure to “overhaul” its global cloud strategy, also. Use of generative AI in Vodafone will be “built on unbiased and ethical privacy and security policies under Vodafone’s established framework for responsible AI,” it said.
Besides scaling IoT, integrating generative AI, and its twin focuses on enterprise sales and cloud transformation, the major focus of the collaboration is Vodafone’s financial services platform, M-Pesa, in Africa. M-PESA will be moved onto Azure, and new cloud applications will be launched, said Vodafone. The duo will also launch a scheme to enhance digital skills and youth outreach, and develop digital services to the underserved SME market in Africa.
On its enterprise and cloud strategies, Vodafone said: “Vodafone will extend its commitment to distributing Microsoft services, including Microsoft Azure, security solutions, and modern work offerings… as part of its strategy to become Europe’s leading platform for business. This enables business customers to deploy Microsoft’s cloud services at pace with low adoption and running costs, [and] support… 24 million SMEs across Europe through… a managed platform.
“Vodafone will accelerate its cloud transformation by modernising its data centres on Microsoft Azure. This will improve its responsiveness to customers, while simplifying and reducing the operational costs of its IT estate… Vodafone will be able to replace multiple physical data centres with virtual ones across Europe, simplifying and reducing the operational costs of its IT estate, as well as reducing energy requirements.”
Margherita Della Valle, chief executive at Vodafone Group, said: “Today, Vodafone has made a bold commitment to the digital future of Europe and Africa. 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 chief executive at Microsoft, said: “We are delighted that 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.”
