AT&T Puts SDN/NFV in Driver's Seat

The new Supplier Domain 2.0 initiative requires new vendors to incorporate virtualization and cloud-based solutions to help AT&T reduce its capex.

September 24, 2013

2 Min Read
AT&T Puts SDN/NFV in Driver's Seat

AT&T sent a shot across the telecom industry's bow late Monday when it announced its Supplier Domain Program 2.0. The initiative is designed to accelerate the carrier's move to software-defined networking (SDN) and network functions virtualization (NFV), help it adopt a more cloud-based approach, and enable it to reduce capital expenses. (See: AT&T Revamps Supplier Program for SDN/NFV.)

With this initiative, AT&T Inc. (NYSE: T) is making it clear to its suppliers (and anyone hoping to gain that status) that support for SDN and NFV is crucial. The operator is looking to move away from the tightly linked software and purpose-built hardware model that has long dominated telecom purchasing and deployments. AT&T says that move will help it cut its capital expenditure outlay.

It's likely a positive sign for new players that have been more aggressive in pushing SDN and NFV toward commercial capabilities, as well as for some more established players -- I'm thinking specifically of Alcatel-Lucent (NYSE: ALU) -- that have also moved aggressively to cloud-based approaches.

Michael Genovese, managing director of MKM Partners , told us the new initiative will give new vendors an opportunity to break into the AT&T account as soon as late this year and throughout 2014. Companies such as Arista Networks Inc. , Big Switch Networks , and Plexxi may be in position to challenge the IP/Ethernet vendors that gained status in AT&T's Original Domain 1.0 initiative in 2009 -- namely Cisco Systems Inc. (Nasdaq: CSCO), Juniper Networks Inc. (NYSE: JNPR), and Alcatel-Lucent.

MKM sees less impact on the optical transport domain, where Ciena Corp. (NYSE: CIEN) and Fujitsu Ltd. (Tokyo: 6702; London: FUJ; OTC: FJTSY) were chosen earlier, and it doesn't expect AT&T to move away from its core access suppliers -- namely Alcatel-Lucent and Ericsson AB (Nasdaq: ERIC) in wireline and wireless access.

AT&T's move to define its Supplier Domain Program 2.0 by the ability to reduce capex and support virtualization will have ripples throughout the vendor community and the telecom world at large. Any planned efforts to slow down the virtualization train, in the way some previous industry efforts were slowed by the standardization process or other operations challenges, now look increasingly futile at best.

When one of the world's biggest telecom spenders sends a message to the vendor community to get on board the train or be left at the station, it's time to buy a ticket.

— Carol Wilson, Editor-at-Large, Light Reading

Subscribe and receive the latest news from the industry.
Join 62,000+ members. Yes it's completely free.

You May Also Like