Operator will close European data centres, promises AI-enabled services to more than 300 million EMEA businesses and consumers
Vodafone and Microsoft announced a 10-year strategic partnership. Their plan is to leverage AI and digital platforms to offer digital services to more than 300 million businesses, public sector organisations and consumers in Europe and Africa.
Vodafone will invest $1.5 billion (€1.37 billion) over the next 10 years in cloud and customer-focused AI services developed in conjunction with Microsoft. For its part, Microsoft is to use Vodafone’s fixed and mobile connectivity services. For what and where is not stated.
The companies’ aim is to “transform” customer experience using Microsoft’s generative AI. More specifically, they intend to hyperscale Vodafone’s managed IoT platform and develop new digital and financial services for businesses, particularly SMEs across Europe and Africa.
They will also overhaul Vodafone’s global data centre cloud strategy, meaning Vodafone will modernise its data centres on Microsoft Azure, replacing “multiple physical data centres with virtual ones across Europe”. This is to improve responsiveness to customers while reducing the operational costs of a simplified IT estate.
It is expected the cloud native data centres will consume less energy, in line with Vodafone’s sustainability policy.
Hiving off IoT
Microsoft will invest in Vodafone’s managed IoT connectivity platform, which will become a separate, standalone business by April 2024. The new entity will work to attract new partners and customers. If this goes to plan, it should drive growth in applications and the platform will be expanded to connect more devices, vehicles, and machines.
Currently, Vodafone’s IoT service connects 175 million devices and platforms worldwide. By becoming part of the Azure ecosystem, Vodafone’s IoT platform will be available to a community of developers and third-parties via open APIs.
Given IoT’s stubborn resistance to achieving forecast growth since its inception, this will be a real test of appetite for it, tough economic conditions notwithstanding.
More digital services
The partners plan unspecified new digital services to which GenAI promises unprecedented levels of “personalised and differentiated customer experience across multiple channels”. The services “will be built on unbiased and ethical privacy and security policies under Vodafone’s established framework for responsible AI,” the press release states.
This includes Vodafone’s digital assistant TOBI which is available in 13 countries. Vodafone’s employees will have access to Microsoft’s Copilot “to transform working practices, boost productivity and improve digital efficiency”.
Accelerating digital in Africa
Microsoft intends to help scale up M-Pesa, which is already the largest financial technology platform in Africa. This will be achieved by moving it to reside on Azure and enabling the launch of new cloud-native applications.
M-Pesa’s dominance in Kenya was highlighted earlier this month. An unexplained outage stopped most transactions for two hours in the public sector as well as for private businesses and individuals.
The companies are also launching programme intended to enrich the lives of 100 million consumers and 1 million SMEs across Africa, improving digital literacy and skills, and providing youth outreach programmes. The partners will also offer more digital services to underserved SMEs in market, boosting “financial services innovation, building a community of certified developers”.
Appealing to enterprises
Vodafone will double down on its commitment to selling Microsoft services to enterprises, from Microsoft Azure, to security solutions and applications like Microsoft Teams Phone Mobile. The operator’s aim is “to become Europe’s leading platform for business”.
Through its renewed efforts, it will enable “business customers to deploy Microsoft’s cloud-based services at pace with low adoption and running costs, as well as support the estimated 24 million SMEs across Europe through the provision of a managed platform that grows with their business”.
Margherita Della Valle, Vodafone Group CEO (pictured above left), stated “Today, Vodafone has made a bold commitment to the digital future of Europe and Africa.”
Satya Nadella, chairman and CEO, Microsoft (pictured above right), upped the ante, saying, “This new generation of AI will unlock massive new opportunities for every organisation and every industry around the world”.