Vodafone and Microsoft have announced a 10 year strategic partnership that will see them partner across different areas of their businesses.

One aspect of their partnership will see the Vodafone and Safaricom owned M-PESA platform being hosted on Microsoft Azure. M-PESA is a digital financial service that is popular in Kenya and is also live in Democratic Republic of Congo (DRC), Egypt, Ghana, Lesotho, Mozambique and Tanzania. It has been hosted on Huawei’s platforms since 2012.

Vodafone will invest $1.5 billion over the next 10 years in cloud and customer focused AI services developed in conjunction 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 attract new partners and customers, driving growth in applications and expanding the platform to connect more devices, vehicles and machines.

The two companies intend to collaborate in five key areas:

1. Generative AI

The companies will use Microsoft Azure OpenAI to deliver frictionless and hyperpersonalized experiences across all Vodafone customer touchpoints, including its digital assistant TOBi (available in 13 countries). Vodafone employees will also be able to leverage the AI capabilities of Microsoft Copilot to transform working practices and improve digital efficiency.

2. Scaling IoT

Microsoft will invest in Vodafone’s new, standalone global Internet of Things (IoT) managed connectivity platform, which connects 175 million devices and platforms worldwide. Vodafone will become part of the Azure ecosystem making the IoT platform available to a vast developer and third-party community using open APIs.

3. 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.

4. Enterprise growth

Vodafone will extend its commitment to distributing Microsoft services, including Microsoft Azure, security solutions and modern work offerings such as Microsoft Teams Phone Mobile.

5. Cloud transformation

Vodafone will accelerate its cloud transformation by modernizing its data centers on Microsoft Azure. This will 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 centers with virtual ones across Europe.