Cloud services

Microsoft expands relationship with SES

O3b mPOWER satellite hardware was presented at the Boeing high-bay floor in El Segundo, California, on 17 August Photo: Boeing

O3b mPOWER satellite hardware was presented at the Boeing high-bay floor in El Segundo, California, on 17 August Photo: Boeing

Luxembourg satellite operator SES has signed on Microsoft as the first cloud provider for its next-generation medium Earth orbit system, the company said on Wednesday after unveiling the first satellites of the constellation a day before.

SES is planning to launch the first three of its so-called O3b mPower satellites in December and on Tuesday unveiled the hardware at a Boeing factory in California. Two further launches are scheduled for next year.

Microsoft has signed up as the network’s first customer providing cloud services, SES said in a statement on 18 August. It will be using SES’ current medium Earth orbit connectivity before switching to O3b mPower next year, the company said.

"Utilising SES' medium earth orbit system enhances the power of Azure Orbital and enables us to deliver greater resiliency and comprehensive satellite connectivity solutions for our customers,” said William Chappell, vice president of Azure Global, Microsoft’s cloud computing service.

SES and Microsoft in September 2020 signed a multi-year agreement, with SES expanding the use of Azure across its operations. The Azure partnership also sees the satellite company locating and managing four O3b mPower ground stations next to Azure data centre locations.

“SES customers will enjoy improved network performance, speed-to-market, flexibility and scalability to route over Microsoft’s global network,” the Luxembourg-headquartered company said at the time.

Under the deal announced on Wednesday, Microsoft will be the customer to deliver flexibility and throughput speed and capacity to any of its Azure locations on Earth.

 “O3b mPOWER will introduce new levels of cloud-scale satellite connectivity, intelligent automation and managed services that extend the reach and unleash the capabilities of cloud players like never before,” said JP Hemingway, CEO of SES Networks. 

Networks revenue flat

While Microsoft is the first cloud provider to have signed up for the O3b mPower network, other customers include mobile network provider Orange and cruise operators such as Carnival and Virgin Voyages.

The launch will be decisive for SES as underlying revenue from its networks business was flat at €349m in results posted for the first half of this year compared to 2020 (-0.2%).

The company has accumulated a backlog of $770m from its SES-17 and O3b mPower networks.

Underlying revenue in the company’s video segment was at €526m, down 3.9% year-on-year for the first six months of 2021. Video accounts for 60% of the group’s income. Net profits of €152m were linked to a reduction of operating expenses by 4.6% year-on-year as part of a restructuring plan aimed at streamlining operations and improving efficiency.

The firm last year said it would close offices in Brussels, central London, the Isle of Man, Warsaw and Zurich, redistributing activities from these locations to other offices in Kiev, Stockholm, Stockley Park in London and the Hague, as well as to its headquarters in Luxembourg.