Telstra and Microsoft sign five-year strategic agreement to support Australia's digital growth

Empowering a nation: companies set out ambitious deal and plans

SYDNEY, Australia, July 26, 2022 /PRNewswire/ -- Today, Telstra and Microsoft have announced a major expansion of their strategic partnership to drive growth and value for customers and Australia as a nation. The five-year agreement is one of the largest partnerships Microsoft has established with a telecommunications provider globally.

The companies aim to help accelerate Australia's digital transformation by combining Microsoft's technology with Telstra's network reach and technological capabilities. The agreement will:

- Boost Microsoft's connectivity and growth in Australia, with Microsoft becoming an anchor tenant on Telstra's new ultra-fast intercity fibre network.
- Drive Telstra's ambition to have about 90 per cent of its applications on public cloud infrastructure by 2025, which includes Microsoft Azure as a preferred cloud partner as part of Telstra's multi-cloud approach.
- See Telstra launch a dedicated end-to-end Microsoft practice to unlock maximum value for the organisations' joint customers across their digital transformation journey by combining Microsoft's cloud, edge and modern work solutions with Telstra's network leadership and technology experts.
- Increase collaboration between Telstra and Microsoft to support hybrid ways of working and develop environmental, social and governance (ESG) initiatives.

Boosting connectivity and harnessing cloud capabilities

The strategic agreement sets the foundation for Telstra to become Microsoft's largest supplier of its network capacity requirements on terrestrial fibre in Australia, and for Microsoft to become an anchor tenant on Telstra's new ultra-fast intercity fibre network.

Microsoft will also explore boosting its capacity on Telstra's leading Asia-Pacific subsea cable network. Through these investments, Microsoft will be able to achieve unparalleled end-to-end connectivity across key telecommunications routes in Australia and across the Asia-Pacific region.

Boosting connectivity is vital as workforces become more distributed with remote working and as demand for online education, high-definition entertainment and online gaming grows. For Microsoft, more bandwidth and reduced latency will help provide the best possible experiences for customers connecting on Microsoft Teams, businesses that rely on the cloud, and its Xbox community.

In addition, the organisations will collaborate to accelerate Telstra's migration of its internal information technology (IT) workloads to the public cloud, which will include Microsoft Azure as a preferred cloud partner as part of Telstra's multi-cloud approach. Microsoft will bring in expertise to help Telstra scale to meet its ambition of its T25 growth strategy. It will also help Telstra maximise value and efficiencies from the migration and deliver products and services more quickly to customers.

Collaborating on new product offerings and future ways of working

To make it easier for customers to source comprehensive solutions to transform and grow their businesses, Telstra is looking to provide a new suite of digital offerings with Microsoft.

Using Microsoft technology like Azure, Microsoft 365 and Microsoft Teams, Telstra intends to bring to market a series of new industry-based solutions that will help transform the way businesses look at hybrid working and cloud migration. Initially focusing on manufacturing, retail, agriculture, utilities and finance, these new digital offerings will be delivered by dedicated end-to-end Microsoft practice within Telstra Purple, Telstra's managed services and technology consulting business.

The organisations will also continue to co-develop products that reimagine familiar experiences and merge the network and the cloud to create new offers. For example, Telstra and Microsoft recently co-developed Branch Offload, Australia's first 5G-enabled edge computing solution for enterprises. The solution blends Telstra's 5G and fixed connectivity with Microsoft Azure Stack Edge for edge computing, secure edge, SD-WAN and service orchestration, and is delivered by Telstra Purple.

This work will be designed to help more enterprise, government, and small and medium-sized business customers benefit from the combination of Microsoft's cloud solutions with Telstra's market-leading connectivity and the expertise of the Telstra Purple team.

Responsible business: tackling sustainability challenges

Telstra and Microsoft intend to collaborate on ESG areas to improve sustainability outcomes in Australia and enable Telstra to meet its own commitments.

The organisations plan to combine the secure data exchange capabilities of the Telstra Data Hub platform with Microsoft Cloud for Sustainability to help Telstra's enterprise, government and small business customers to accelerate their sustainability progress and business growth through data insights.

Microsoft will also support Telstra in achieving its own sustainability goals using Microsoft Cloud for Sustainability which will provide data insights into sustainability performance.

CEO comments

Telstra CEO Andrew Penn said the deal is aligned to Telstra's T25 growth strategy to deliver growth, exceptional customer experiences, and continued network and technology leadership.

"As the go-to partner for Microsoft in Australia, this expanded agreement will turbocharge how we deliver compelling, all-digital experiences," said Mr Penn.

"The pervasiveness of technology in businesses today and its ability to transform their operations, improve productivity, reduce their environmental impact and meet evolving customer needs means there's no one-size-fits all solution.

"Beyond our network, one of our biggest differentiators is our 2,000-strong Telstra Purple team of technology experts who partner with businesses to design, deliver and manage solutions across cloud, cybersecurity, software development, data and AI, and workplace technologies. 

"Our strategic partnership with Microsoft is on a scale not seen before in Australia, and it will be Australian businesses who will benefit at a time when the urgency to digitise and transform their operations has never been greater," said Mr Penn.

"Digital technology is foundational to the resilience and differentiation of every organisation," said Satya Nadella, Chairman and CEO, Microsoft. "Our partnership brings together Telstra's leadership in network connectivity with the breadth and depth of the Microsoft Cloud to address key challenges, including hybrid work and sustainability, and support Australia's growth."

Microsoft and Telstra will work together over the coming months to finalise the detailed scope of this expanded partnership.

About Telstra

Telstra (ASX: TLS) is one of Australia's leading telecommunications and technology companies, offering a range of communications services to millions of customers across the nation. It also has an international presence spanning over 20 countries.

About Microsoft

Microsoft (Nasdaq: MSFT; @microsoft) enables digital transformation for the era of an intelligent cloud and an intelligent edge. Its mission is to empower every person and every organisation on the planet to achieve more.