The venture will allow Vodafone to access all of IBM's cloud services, while the London-based telecommunications conglomerate will provide mobile infrastructure like 5G to Big Blue.
"Bringing together this end-to-end idea from Vodafone and IBM is going to be a game-changer for our customers," Michael Valoochi, general manager at IBM, told CNBC in a phone interview Thursday.
The announcement comes as Europe lags behind the U.S. and China in many so-called next-generation technologies like 5G. CCS Insight, a technology research company, estimates Europe will only capture 9 percent of the world's 5G subscribers by 2023.
Partnerships between companies like IBM and Vodafone could help accelerate Europe's foothold in new markets like cloud computing and 5G. U.S. companies are currently the biggest players in Europe's cloud market.