Microsoft paid at least $270 million in stock to acquire Metaswitch Networks, a London-based company that provides software for telecommunications companies.
The company in a recent filing disclosed it paid the stock as a "portion" of the transaction price, but declined to disclose additional financial terms in response to a Business Insider inquiry.
The acquisition comes just months after Microsoft likely paid more than $1 billion for 5G software company Affirmed Networks.
Microsoft is competing with rival Amazon Web Services to establish dominance in the lucrative telecom sector, which is seen as a ripe market for cloud computing services amid the transition to 5G.
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Microsoft paid at least $270 million in stock to acquire cloud-based communications software company Metaswitch Networks, according to a recent filing — showing the company's strategy to compete with cloud rival Amazon Web Services by luring telecom customers as they build out their 5G networks.
Microsoft disclosed the company paid $270,255,106 in stock as part of the deal to buy Metaswitch, which provides software for telecommunications companies. It's unclear if, or how much, cash was involved. Microsoft declined to comment on financial terms of the deal, which closed July 14.
Microsoft's Metaswitch acquisition came just a few months after the company acquired 5G software company Affirmed Networks. Microsoft didn't disclose the acquisition price, but Bloomberg reported the company paid $1.35 billion, citing unnamed sources. An Affirm Networks investor also tweeted the deal was a "unicorn" acquisition, seeming to imply it was valued at more than $1 billion, as CNBC noted.
Futurum Research analyst Ron Westfall, according to research notes in recent months, views the acquisitions as a strategy to compete in cloud computing with AWS, which he has said has a "vast foothold in the telecom sector."
The Affirmed Networks acquisition will help Microsoft "boost its Azure competitive arsenal in order to better target the operator space," while both acquisitions together are "a clear signal to the entire 5G ecosystem that it is doubling down on its Azure cloud platform to drive more 5G-[Internet of Things] and networking edge computing services."
Westfall told Business Insider $270 million seems like a "reasonable amount" for Microsoft to pay for Metaswitch. "I don't think Microsoft really needed to sweeten the deal beyond that," he said.
Microsoft has a new approach to tailor its products and services to specific industries. For example, the company in May introduced its first industry-specific cloud, for health care customers, and recent notable hires suggest other industries could come next.
5G could also be key to Microsoft's strategy around so-called "edge computing." Edge computing basically means processing data on the devices themselves, instead of offsite in the cloud. Microsoft CEO Satya Nadella has said the company designed its entire cloud business around this concept of an ever-expanding set of connected devices that process data locally and work in tandem with the cloud.
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