Microsoft Corporation (MSFT) has struck a deal with Verizon Communications Inc. (VZ) to put together a worldwide network to accelerate video delivery for its Azure cloud computing service customers.
Timeline
Late last year, Microsoft decided to discontinue the build out of its content delivery network (CDN) for the Azure cloud platform. Instead, it chose to enter into a deal with Verizon to white label Verizon's EdgeCast CDN.
No official partnership was announced then.
Microsoft has now confirmed the deal to Dan Rayburn of Seeking Alpha. The company said that Microsoft licenses technology from its partners to complement its offerings. It also stated that EdgeCast will be an integral component of the Azure Media Services workflow.
In the second half of 2013, Verizon had bought Edgecast for its media delivery expertise.
Why the Move?
At first look, it might seem odd for Microsoft to discontinue its in-house Azure CDN and rely on a third-party. However, if Microsoft's approach to the market is considered, it seems logical.
Many cloud providers like Amazon (AMZN) and Google (GOOGL) build everything in-house. However, Microsoft's approach with Azure has constantly been to provide customers more options and deeper functionality. In fact, last September, it had partnered with Telestream and Newtek to roll out live streaming and content protection offerings within the Azure Media Services group.
Recently, the announcement that GameStop will use the Azure cloud platform to stream video game content straight to consumers and to devices in-store indicates the kind of solution that Microsoft is building with its partners.
Microsoft aims at providing an end-to-end ecosystem for video instead of simply building cloud components.
This partner focused solution helps Azure differentiate its service offerings from the internally built solutions of rivals.
Azure’s largest competitor, Amazon, has been offering in-house CDN services to cloud users for years. According to Rayburn, as Microsoft was late to join the game, the Verizon deal, “gets them to market faster with a solution that has more capacity.”
Looking Forward
By providing a steady video delivery service, Microsoft might be eventually intending to make its way into content delivery for the entertainment industry.
As a partner to Verizon, this deal might help Microsoft to handle the most complex features of video creation, management and delivery from one easy-to-use terminus.
As Azure services get bigger in scope and scale, we might just see more such partnerships in the future, as Microsoft looks to become the top cloud service provider globally.
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