As telecom companies develop networks to support 5G, there has always been a question of how this next generation of mobile communications will support other technologies, such as the cloud and artificial intelligence (AI). A new deal announced this week means we are one step closer to finding this out.

What Did Microsoft And AT&T Announce This Week?

On Wednesday, AT&T reached a multi-year agreement with Microsoft for a deal that impacts both its internal users and external customers. According to Reuters, the deal is reportedly worth more than $2 billon.

Under the terms of the agreement, AT&T’s workforce will get access to Microsoft Azure and Office 365 for productivity. Many of AT&T’s current internal applications run on-premises, so the move allows the organization to migrate its systems to the cloud. The deal is also non-exclusive, meaning that AT&T can still use cloud services from other providers.

Externally, Microsoft and AT&T will partner on projects that combine Microsoft’s edge computing devices and AI features with AT&T’s 5G network. By 2020, AT&T’s nationwide 5G network is expected to be in operation, and the deal could bolster Microsoft’s edge computing offerings.

“Our general heritage of being a developer tools company, combined with the network capabilities of AT&T, is unique,” Microsoft Chief Executive Sayta Nadella told Reuters.

The day before the Microsoft deal was announced, AT&T revealed a multi-year strategy with IBM to modernize its software for the cloud. That deal is also rumored to be worth billions of dollars.

What Does This Mean For The Enterprise?

For the enterprise, the Microsoft/AT&T deal foreshadows the opportunities of combining 5G with edge computing. The partnership between a carrier with high speed network and a vendor with cloud computing services opens the door for new possibilities in the enterprise.

There’s no denying the growing demand for AI, cloud, and edge. By including the next generation of mobile communications (which offers faster speeds and lower latency) with these technologies, enterprises will be able to benefit in a big way. Smart factories, which have seen a rapid increase in Internet of Things (IoT) devices and sensors in recent years, will benefit from the added capabilities to collect data. This unique combination will also help field service workers remotely access applications with new features.

For Microsoft, this is a chance to expand its already robust services by including access to AT&T’s fast 5G network. This should result in new opportunities in the enterprise, with potential benefits for augmented reality (AR) devices, drones, and autonomous vehicles.

This deal should also enhance AT&T’s offerings for the enterprise. AT&T already has a fast 5G network, but it lacked the cloud computing infrastructure. The new deal should allow them to offer expanded and specialized services to business users. The connected device space is one area to watch, especially since telecom companies are spending $275 billion over seven years to support these devices.

From manufacturing and medicine to smart cities and transportation, the era of edge computing and 5G is upon us. As both technologies mature, this combination will become more common in the enterprise.

Read last week's industry on the move: Cisco Acquisition Signals Rise Of 5G