Microsoft chief executive Satya Nadella and Telstra boss Andy Penn have signed a partnership agreement for both companies to develop new products and services together, to take advantage of the growing capabilities of artificial intelligence, cloud computing and 5G technology.
The partnership will be a notable boost in a long-mooted plan at Telstra to become regarded as a broader technology company, alongside its telecommunications roots, and will serve as a feather in Microsoft’s cap in its ongoing cloud computing battle with fellow US tech giant Amazon Web Services.
The agreement will see Telstra officially adopt Microsoft’s Azure platform as its preferred cloud computing supplier on its own internal T22 digital transformation program, and use the technology to try out some of the ideas for internal use, which it will then sell to clients.
“This is particularly important for us as it follows on from a one-on-one catch-up I had with Satya back in February, where we were talking about the convergence between compute and telecommunications,” Mr Penn said.
“There are three technology areas that are maturing today at the same time, which are going to be transformational in terms of providing businesses and industries with opportunities for productivity and efficiency, and these are 5G, cloud, and AI.
“Microsoft is obviously world-leading in terms of cloud, AI, and solutions for customers, so combining its global scale with Telstra’s network solutions and reliability will help us drive new and unique solutions.”
One example of the technology being developed is in so-called digital twins, whereby a virtual version of real-world buildings and infrastructure can be created, in order for companies to run simulations and test out what may happen if different actions are taken.
Mr Nadella said the convergence of computing power and telecommunications infrastructure would incorporate the internet of things (IoT), whereby sensors are placed in all kinds of situations across industry sectors to provide real-time data on operations.
“The world having computing embedded in it is the next phase… In mobile the next 10 years is going to be about the rollout of 5G and embedding compute in the real world, whether it’s in a hospital, a mine or a construction site,” he said.
Telstra is initially creating a digital twin of its own buildings, including its 47-floor skyscraper headquarters in Exhibition Street, Melbourne, and the idea could be extended to some of its network infrastructure.
It will allow it to plan scenarios around workers returning to the office post-COVID lockdown, and also seek to make significant savings in energy usage in empty rooms.
It has already begun the commercial spin-out of the idea, working alongside Microsoft, through its technology services business Telstra Purple, to build a digital twin for Downer Group’s asphalt plants.
The company is planning to deploy it for 33 plants across Australia to monitor potential worker safety problems in real time.
“You digitise the physical world by putting sensors in physical objects, whether it’s a garbage bin, or a lamppost, or a vehicle, or agricultural equipment, then you can just capture all of the data,” Mr Penn said.
“5G is important because it’s the first network that’s designed for IoT, so you can put far more decisive sensors on the network. Then we now have the cloud compute and capacity to process all this data, with artificial intelligence engines that take the data and learn from it.”
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Both Mr Nadella and Mr Penn will appear at an Australian Financial Review Reshaping Australian Dialogues event on Friday morning, where they will take part in a panel discussion about the post-pandemic future of business, alongside National Australia Bank CEO Ross McEwan and CEO of The Australian Energy Market Operator Audrey Zibelman.
Paul Smith edits the technology section and has been a leading writer on the sector for almost 20 years. He covers big tech, how businesses are using technology, fast growing start-ups, telecommunications and national innovation policy. Connect with Paul on Twitter. Email Paul at email@example.com