Vodafone and Microsoft have announced a ten-year partnership to offer scaled digital platforms to more than 300 million businesses, public sector organisations and consumers across Europe and Africa.

Through the partnership, the companies will collaborate to transform Vodafone’s customer experience using Microsoft’s generative AI; hyperscale Vodafone’s managed IoT connectivity platform; develop digital and financial services for businesses, particularly SMEs across Europe and Africa; and overhaul its global data centre cloud strategy.

Vodafone will invest $1.5bn over the next ten years in cloud and customer-focused AI services developed 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, which will become a separate, standalone business by April 2024. The new company will aim to attract partners and customers, driving growth in applications and expanding the platform to connect more devices, vehicles and machines.

The digital services generated by the partnership will use generative AI technology to provide a personalised and differentiated customer experience across multiple channels. They will be built on unbiased and ethical privacy and security policies under Vodafone’s established framework for responsible AI.  

“Today, Vodafone has made a bold commitment to the digital future of Europe and Africa,” said Margherita Della Valle, Vodafone (www.vodafone.com) chief executive. “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.”

The companies have identified five 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 Tobi digital assistant, 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 standalone global IoT-managed connectivity platform, which connects 175 million devices and platforms worldwide. Vodafone 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 launching a purpose-led programme that seeks to enrich the lives of 100 million consumers and a million SMEs across the African continent. The goal is to enhance digital literacy, skilling and youth outreach programmes, 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 Azure, security and modern work offerings such as Teams Phone Mobile, as part of its strategy for business. This lets businesses 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 Azure. This should 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.

“This new generation of AI will unlock massive new opportunities for every organisation and every industry around the world,” said Satya Nadella, Microsoft (www.microsoft.com) CEO. “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.”

Luc Vidal, head of the IoT business at BICS (www.bics.com), added: “Vodafone’s partnership with Microsoft 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, 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.”