German telecommunications company Deutsche Telekom AG (OTC: DTEGY) and Microsoft Corporation (NASDAQ: MSFT) have inked a seven-year deal to accelerate the digitalization of midmarket businesses and enterprise customers.
What Happened: An official news release on Microsoft’s website explains that the strategic collaboration hopes to speed up cloud adoption and promote Microsoft 365 and Azure as the preferred cloud platform for Deutsche Telekom IT subsidiary, T-Systems.
The efforts will combine Microsoft’s Cloud and AI solutions with Deutsche Telekom’s cloud migration framework and telecommunication services.
Deutsche Telekom has also agreed to offer the Microsoft Teams communication platform and the Office 365 tools to educational institutes to enhance remote interactions.
Deutsche Telekom also plans to use Azure ExpressRoute for bypassing the public internet and speed up customer connectivity.
Both companies will collectively address the regulatory needs and compliance standards set by the European authorities.
Why Does It Matter: Introducing the concept of cloud-based mainframes could enhance the energy efficiency, scalability of operations, and business continuity without the need for additional operational expenses or hardware costs.
Deutsche Telekom is already relying on Azure to achieve its 2025 public cloud migration targets, and its employees are being engaged in training programs for Microsoft’s cloud services platform.
Microsoft anticipates small and mid-sized businesses to benefit by adopting these cloud initiatives.
The current agreement is an expansion of the partnership originally started in 2018 between Microsoft and T-Systems. At the time, the focus was on the Internet of Things and networking using connected devices.
Price Action: In the pre-market session on the last check Thursday, MSFT shares are up by 0.38% at $212.6.
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