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Vodafone looks to ‘hyperscale’ IoT through Microsoft strategic partnership

IT giant and telco unite with plan to transform customer experience using generative AI, looking to scale standalone IoT business and accelerate digital transformation

In a demonstration of the need to enhance customer experiences in the realm of internet of things (IoT) services, Vodafone and Microsoft have sealed a 10-year strategic partnership designed to take advantage of their respective strengths to offer scaled digital platforms to more than 300 million businesses, public sector organisations and consumers across Europe and Africa.

Through their collaboration partnership, the companies will aim to transform Vodafone’s customer experience using Microsoft’s generative AI (GenAI), “hyperscale” Vodafone’s managed IoT connectivity platform, develop digital and financial services for businesses – particularly small and medium-sized enterprises (SMEs) across Europe and Africa – and overhaul its global datacentre cloud strategy. The companies have identified five key areas of collaboration: GenAI; scaling IoT; African digital acceleration; enterprise growth; and cloud transformation.

The deal will see Vodafone invest $1.5bn over the next 10 years in cloud and customer-focused AI services developed in conjunction with Microsoft. Additionally, Microsoft will use Vodafone’s fixed and mobile connectivity services.

Microsoft also intends to invest in Vodafone’s managed IoT connectivity platform, connecting 175 million devices and platforms worldwide, which will become a separate, standalone business by April 2024.

The company will look to attract new partners and customers, driving growth in applications and expanding the platform to connect more devices, vehicles and machines.

Vodafone also plans to become part of the Azure ecosystem making the IoT platform available to a developer and third-party community using open application programming interfaces.

It will extend its commitment to distributing Microsoft services, including Microsoft Azure, security solutions and modern work offerings such as Microsoft Teams Phone Mobiles. This, said the firm, will enable business customers to deploy Microsoft’s cloud-based services as well as support the estimated 24 million SMEs across Europe through the provision of a managed platform that grows with their business.

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Vodafone will accelerate its cloud transformation by modernising its datacentres on Microsoft Azure.

The digital services generated by the partnership will use generative AI technology to provide a highly personalised and differentiated customer experience across multiple channels. To increase customer satisfaction, the companies will apply Microsoft Azure OpenAI to deliver real-time, hyper-personalised experiences across all Vodafone customer touchpoints, including its TOBi digital assistant.

“Vodafone has made a bold commitment to the digital future of Europe and Africa,” said Vodafone Group chief executive Margherita Della Valle. “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.”

“This new generation of AI will unlock massive new opportunities for every organisation and every industry around the world,” added Microsoft chairman and CEO Satya Nadella. “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.”

News of the partnership has already been welcomed by the connectivity industry. Offering his opinion into what he thought would be the impact of the deal, Luc Vidal, head of M2M/IoT business and mobility at international connectivity enabler BICS, said: “[This] shows the sustained growth we are seeing for IoT service, and will likely only fuel increased attention in ‘connectivity twins’. They’re the missing piece enterprises need to virtually clone IoT devices, including their connectivity components, for a single real-time view of their end-to-end IoT solutions, along with all device and application components. Digital twins turn device-centric information into a business visualisation allowing more efficient decisions.

“As the volume of IoT devices continues to ramp up, these connectivity twins will be essential for enterprises to troubleshoot problems faster, better predict downtime and maintenance, facilitate end-to-end security, and improve overall service quality. Without these, businesses deploying IoT will effectively be blind, lacking real control over their systems and devices.”

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