Vodafone Bringing Microsoft’s AI and Cloud to UK Customers

Mobile operator Vodafone has today signed a major 10-year strategic partnership with Microsoft, which aims to benefit more than 300 million businesses, public sector and consumer customers across Europe, the UK and Africa by harnessing various technologies (e.g. generative AI, digital services and the cloud).

Under the deal, Vodafone intends to invest $1.5 billion (£1.18bn) over the next 10 years in cloud and customer-focused AI services developed as part of their collaboration with Microsoft to help “transform [the operator’s] customer experience.”

At the same time Microsoft aims to harness Vodafone’s fixed (broadband etc.) and mobile connectivity services, not least by investing in the operator’s managed IoT (Internet of Things) connectivity platform, which will become a separate, standalone business by April 2024. The new company aims to attract new partners and customers, driving growth in applications and expanding the platform to connect more devices, vehicles, and machines.

The Five Key Areas of Collaboration:

· Generative AI: To increase customer satisfaction, the companies will apply the power of Microsoft Azure OpenAI to deliver frictionless, real-time, proactive, and hyper-personalised experiences across all Vodafone customer touchpoints, including its digital assistant TOBi (available in 13 countries). Vodafone employees will also be able to leverage the AI capabilities of Microsoft Copilot to transform working practices, boost productivity and improve digital efficiency.

· Scaling IoT: Microsoft intends to invest in Vodafone’s new, standalone global Internet of Things (IoT)-managed connectivity platform, which connects 175 million devices and platforms worldwide. Vodafone also plans to become part of the Azure ecosystem making the IoT platform available to a vast developer and third-party community using open APIs.

· Africa digital acceleration: Microsoft intends to help further scale M-Pesa, already the largest financial technology platform in Africa, by housing it on Azure and enabling the launch of new cloud-native applications. The companies are also launching a purpose-led program that seeks to enrich the lives of 100 million consumers and 1 million SMEs across the African continent. The goal is to enhance digital literacy, skilling and youth outreach programs, as well as offer digital services to the underserved SME market. The partnership aims to boost financial services innovation, building a community of certified developers.

· Enterprise growth: Vodafone will extend its commitment to distributing Microsoft services, including Microsoft Azure, security solutions and modern work offerings such as Microsoft Teams Phone Mobile, as part of its strategy to become Europe’s leading platform for business. This enables 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.

· Cloud transformation: 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. As a result, 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 and helping deliver against its sustainable business strategy.

Margherita Della Valle, Vodafone Group CEO, 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, Microsoft’s Chairman and CEO, said:

“This new generation of AI will unlock massive new opportunities for every organisation and every industry around the world. 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.”

The question of whether or not Vodafone’s adoption of Generative AI and Cloud, in particular, will really “increase customer satisfaction” is something we’ll only be able to judge over a longer period of time, although most of the improvements being talked about seem to be more focused on their internal processes.

Often companies will talk a big game about the benefits to customers of such collaborations (our focus in this is more on consumers), when in reality it ends up being more about cost savings and consumers may thus struggle to notice much of a positive difference. Time will tell.