Where to now for Affirmed?

A man walks into a bar with a newt on his shoulder. He asks for a coke and a mango juice for his newt, Tiny. The bartender asks, ‘Why is it called Tiny?’ And the man replies. ‘Because it’s my newt!’. Sorry. But in my defence this joke has generated a mirthful chuckle on more than one occasion. Possibly exactly two occasions.

Microsoft announced the acquisition of 5G core software maker Affirmed Networks Inc on March 26th 2020. The deal valued Affirmed at $1.35 Billion. Affirmed has designed a range of NFV (network function virtualisation) solutions, including a virtualised EPC (evolved packet core). Reading Affirmed’s web site the business has developed all the software for a 5G core. Whether the solutions from Affirmed can truly yet compete with a Nokia, Ericsson or Huawei in the full and total provision of service to a national carrier such Vodafone or AT&T is I believe currently untested. No CTO has quite been prepared to give their network the green light to being the 1st major network to totally step away from the incumbents and into darkest terra incognito. However Affirmed is often included on procurement bid lists and has some great track record in 5G most certainly making a credible stalking horse. Stalking horse today may be stallion tomorrow?

Where Affirmed’s NFV software is already attractive is as a 5G core for private 5G networks, a growing market segment and sweet spot in 5G. Whether building a private network to flood a logistic centre with 5G coverage or in other industrial settings where low latency and high bandwidth will be advantageous the Affirmed core has been used in the build out of sophisticated private networks. These highly complex, important mission critical networks will increasingly underpin our society and the Affirmed software has already found a place in these solutions.

 A Microsoft backed Affirmed looks on the surface to bring very powerful enhancements to the offering. Affirmed along with special hooks into Microsoft Azure’s cloud computing platform is a good story, before we even mention Microsoft’s acquisition of Metaswitch, which has a portfolio of 5G offerings as well as Cyber X with it’s software portfolio in the IOT space. From the outside this looks like a coherent strategy on Microsoft’s part to build a capability in 5G ahead of major deployments in 2021, 2022. And better still a strategy to focus in at the enterprise space, through IOT, 5G for enterprise and private networks.

CIO’s of major industrial enterprises must be exhaustingly familiar with Microsoft. Even if their company uses another vendor of cloud computing the worlds laptop’s are mostly running the Microsoft suite on subscription, and is crucial IT infrastructure (most especially Microsoft Teams in these days of lockdown). So perhaps the burgeoning portfolio of 5G capability, most especially solutions for complex industrial solutions is a great entrée for Microsoft. However it’s really a newt based question. To any other company multiple billion dollar acquisitions represent a meaningful investment. Microsoft has more than $100billion in cash and over 140,000 people in a global organisation. Affirmed, Metaswitch, Github and 5G don’t represent a fly on the back of an elephant, rather a bacteria floating in the gut of the fly – they are minute investments given the momentum of Microsoft’s mainline business. That’s not to say Microsoft as a corporation isn’t without an ambition in 5G, but I wonder if Microsoft can amend it’s way of working to suit the demands of 5G to the enterprise sector let alone to the requirements of large network providers?

 Any 5G implementation be it at an enterprise level for private networks or part of a national network will require sophisticated project management, implementation and unique builds. Imagine a 5G private network implementation for liquified gas processing and storage facility with mega ships unloading mega quantities of gas and mega swarms of lorries and pipes distributing fuel ceaselessly day and night. It’s not going to be amenable to a hands off delivery where a half dozen 5g hotspots can be delivered by post and the software is downloaded and automatically installed. Not least a click yes to ‘you bought it so it’s all your fault anyways and we take no liability whatsoever’ contract might not entirely appeal to the CIO running this mission critical network. And if regulating a liquified gas plant isn’t mission critical, running the nation’s telephony and data services surely is.

Perhaps an easier imagining for the future is Microsoft, via the Affirmed acquisition, reaching out to corporate users on mobile platforms through small off the shelf private networks fitting small and medium sized enterprises? In this scenario Microsoft is offering a value added alternative to that oh so nearly dead office desk phone. This thought came from a senior industry insider who also likes the combination of Azure, IOT, private networks and AI giving us some clever flexible yet engineered solutions for the future.

Another point to consider is the need for global procurement to rebalance purchasing choices away from suppliers in embargoed countries. Many national carriers will be seeking new options and Microsoft (as well as Amazon and Google), so long as it learns to give project discounts and understands that a strategic deal is often a synonym for low-to- no-margin business, could easily be added to bid lists.

Lastly we might gaze in our collective crystal balls and imagine what other acquisitions Microsoft intend to make so as to have full capability in the telco sphere. Vmware perhaps?

Microsoft has made intelligent and coherent acquisitions toward establishing a bridgehead in 5G. The road from the bridgehead depends on figuring out how to surround those services with skills, resources and processes that go to meeting their customers needs which may be very different from existing ways of working. Minute and in detail, yes, but nevertheless very complicated.

In Azenby we have expertise in solution specification, architecture and technical strategies for 5G NFV and experience of working with Affirm solutions and through the issues raised in this blog piece. Please contact us if you would like to discuss how we can support you in this space.

Interesting places to read more

https://www.bloomberg.com/news/articles/2020-03-27/microsoft-deal-said-to-value-affirmed-networks-at-1-35-billion

 https://www.owler.com/company/affirmednetworks

https://www.affirmednetworks.com

https://www.thestreet.com/technology/microsoft-to-buy-metaswitch-its-second-telecom-acquisition-this-year

https://www.metaswitch.com/blog/metaswitch-announcement

https://blogs.microsoft.com/blog/2020/06/22/microsoft-acquires-cyberx-to-accelerate-and-secure-customers-iot-deployments

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