Microsoft and AT&T Try to Make the Internet of Things Easier

The Internet of Things (IoT), that catch-all phrase describing the tens of billions of new devices that hook up to the internet, is still a work in progress. Microsoft (NASDAQ: MSFT) and AT&T (NYSE: T) recently announced that they're teaming up on a new service for large enterprises that want to deploy network-connected devices. AT&T is running point, making use of Microsoft's tech know-how to make it easier for enterprises to get devices connected to a network.

A city skyline with illustrated bubbles filled with electronic device and 5G symbols in them.

Image source: Getty Images.

Microsoft and AT&T's announcement is actually a continuation of the partnership they unveiled in 2019, in which AT&T migrated its non-network operations (i.e., those not specifically related to its mobile communications network) to Microsoft's cloud computing service, Azure. AT&T is now building the new service using Azure Sphere, a cloud-based IoT ecosystem that includes chips and related hardware, software, and security.

The idea is for companies to easily deploy and manage their connected products on AT&T's mobile network at scale. Use-case examples include healthcare providers (connected medical equipment), manufacturers (industrial equipment), retailers (surveillance cameras and point-of-sale terminals), and commercial real estate and apartment owners (elevators and lights).  

On its own, this IoT announcement isn't going to generate massive growth at either Microsoft or AT&T. For the telecom operator, the new initiative is part of an ongoing evolution of its network, which is no longer limited to voice and text. AT&T is expanding the reach of the internet so that all devices can access the cloud directly without wires -- and it's not alone. Verizon also recently announced the planned expansion of its 5G network integrated with Amazon's AWS Wavelength to bring edge computing to additional cities. T-Mobile started its 5G Open Innovation Lab to foster use of its next-gen network.

But these initiatives aren't going to send companies like AT&T back into high-growth mode. The era of mobility expansion was 2010. For public cloud operators like Microsoft's Azure and Amazon's AWS, picking up myriad partners -- including network operators like AT&T -- is simply further testament to the fact that the era of cloud computing is the investing megatrend of the moment.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool's board of directors. Nicholas Rossolillo owns shares of Microsoft and Verizon Communications. His clienst may own shares of the companies mentioned. The Motley Fool owns shares of and recommends Amazon and Microsoft. The Motley Fool recommends T-Mobile US and Verizon Communications and recommends the following options: long January 2021 $85 calls on Microsoft, short January 2021 $115 calls on Microsoft, short January 2022 $1940 calls on Amazon, and long January 2022 $1920 calls on Amazon. The Motley Fool has a disclosure policy.

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