AT&T: Mobility, Network Capacity & Fun

Businesses are adopting technology more rapidly than ever before, says Ron Spears, president and CEO of AT&T Inc. (NYSE: T)'s Business Solutions group, and their interest in mobility, in particular, is helping to drive hosted and managed services, as well as more services that are specific to vertical industries.

Speaking to industry analysts at AT&T's Analyst Day event this week and later in an interview, Spears says these are the most volatile times he has seen in a career that began 32 years ago. Despite the economic downturn that produced major job cuts, which traditionally depresses telecom revenues, Spears is seeing brighter skies. AT&T Business saw a double-digit increase in growth last year and expects the same this year, he says.

"This is the most rapidly moving period that I've been involved in," Spears says. "It makes this a good place to be and a fun place to work."

AT&T is stressing its integration of wireline and wireless on the business side as a key advantage, Spears notes, having integrated its sales force so that customers see one AT&T solution, not multiple sales people selling multiple offers.

"We are the only fully integrated wireline-wireless service provider selling those integrated capabilities -- that is incredibly valuable. Mobile data is transforming the work in enterprises at a speed that I've not seen occur. As you see companies put in IP capabilities, some sort of applications capability, as they start to buy their compute and storage on an application basis -- that part of the market will want us to bring that technology to them and explain it. And we will do that."

Mobility also is helping drive AT&T into more high-value solutions that are specific to key verticals including retail, manufacturing, healthcare, financial services, government, and education, according to Spears.

"Mobile applications tend to take us into the vertical space -- like what we did with the Healthcare Exchange in Tennessee [where AT&T set up the first statewide eHealth Exchange Zone]. Now we have 20 bids out to do the same thing in other states."

Wireline solutions haven't proven as applicable across a vertical segment because many times individual companies have a different point of view on their infrastructure, Spears says, but "they don't have fixed ideas about what the solution looks like where mobility is concerned." AT&T is finding it's easier to take a solution created for one player and sell it across that vertical.

AT&T's approach has been to hire experts from each vertical and use that expertise both to help design solutions and to train sales to enable more consultative selling.

iPhone problems? Meh.
When wireless becomes a critical part of the business infrastructure, business customers do complain when it doesn't work as expected, and Spears admits AT&T's iPhone-inspired network congestion problems have prompted complaints from his customers. (See iPhone Troubles Might Go Beyond Signaling.)

"We explain to the issues and what we are doing about it," he says. "I personally spent time with some of our biggest customers, to say 'This is where we are, this is what we are doing.' We have been dealing with capacity generation problems. We are catching up. It is now largely a tale of two cities: New York and San Francisco. But we do hear about it."

Just as mobility is helping to sell vertical applications. Virtual private network (VPN) customers are proving fertile grounds for selling other types of virtualization, whether it's managed security services, network-based storage or computing-as-a-service.

"The network was the first thing to be virtualized. We started in the early part of this decade with MPLS and VPNs. Two thirds of our customers have transformed their networks since 2003, moving away from dedicated private lines and frame relay, and that is a relatively quick period for technology transformation."

Today, 70 percent of VPN customers are buying classes of service, an indication they are using their networks for latency-sensitive services such as voice and video, and not just data. Forty-percent are using multicast technology to reach out to multiple sites with video, as AT&T now does for communicating with its employees, according to Spears.

AT&T added storage-as-a-service and computing-as-a-service to its offerings in 2009, and will continue to add cloud computing services, as part of a "virtuous cycle of value creation" that builds flexible applications delivery and management capabilities on top of the VPN platform to add value to the cloud and support the growing mobile data applications. (See AT&T Joins Cloud Computing Set.)

But Spears also cautions that these are "early days" for cloud-computing, despite the hype, and that early users have mostly been developers.

"The key to cloud services is a tight coupling to virtual private networks. That is the bet we are making, because then we can attach virtual storage and virtual compute to that VPN, and we can do it at scale," Spears asserts. "We are delivering integrated content, and we can deliver it to any device, anywhere, anytime."

— Carol Wilson, Chief Editor, Events, Light Reading

DCITDave 12/5/2012 | 4:35:25 PM
re: AT&T: Mobility, Network Capacity & Fun

You can go ahead and include my region, too: DFW. All along I-30, west of Arlington. And all along 121-S between HEB and FW.

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