Cloud Services

AT&T & AWS: A Powerful Combo

AT&T and Amazon Web Services are forging a tighter partnership to develop joint cloud, Internet of Things and security solutions, targeting enterprises and combining AT&T's network with the AWS cloud. AT&T said the pair are targeting enterprise cloud, threat management and scaling of Internet of Things offerings. (See AT&T, AWS Forge Strategic Partnership.)

Today's announcement is the latest in a series by AT&T Inc. (NYSE: T), including one on AT&T building tighter ties to IBM Corp. (NYSE: IBM)'s Softlayer cloud, made yesterday, and one on the AT&T SD-WAN service launch. But the AWS news packs the biggest punch, as it signals an aggressive push on multiple fronts to develop the new services AT&T has been promising to offer over its increasingly virtualized network infrastructure. (See IBM to Use AT&T Flexware.)

"This is confirmation of a clear trend of the communications service provider community aligning and partnering with the web-scale Internet companies," says Patrick Donegan, Heavy Reading lead analyst. "We are seeing more and more evidence in our surveys of the CSPs taking Amazon and its ilk increasingly seriously as a partner." (See Google, Facebook Gaining Network Equipment Clout and The Impact of the Web-Scale Giants.)

Amazon Web Services Inc. was already part of AT&T's NetBond, its direct cloud connection service, but this new initiative is intended to make it easier for enterprises to combine networking and cloud -- and consume more of both, presumably -- and to provide performance, security and mobility features as well. The NetBond ecosystem is already growing, as AT&T reports a fourfold increase in connections and an eightfold increase in traffic this year over last, but integrated services with performance and security guarantees are likely to increase that growth. (See AT&T NetBond Getting Amazon Ties.)

Combining forces on threat management makes tremendous sense, says Donegan, who actually predicted such a combination between a network operator and web-scale company in a June 2016 report on managed security services.

Want to know more about security strategies? Check out our Service Provider and Enterprise Security Strategies event scheduled for December 1.

Amazon, Google and other cloud companies have been building up the security expertise within their data centers by necessity, he notes, and they have started offering security services to their data center customers, including firewalls and intrusion prevention services.

"They have developed tremendous security within the data center but what they don't have is WAN visibility and capability -- they don't know what is going on in the WAN, whereas AT&T has developed that capability," Donegan says. "Together they can offer a comprehensive security solution and it makes absolute and total sense that they would do that, which is why we predicted it some time ago."

On the IoT front, AT&T's IoT-connected sensors and devices will be preconfigured to securely send data into the AWS Cloud, for storage and analytics, thus creating a managed cloud platform service to support the current explosion of connected devices. More importantly, that solution is able to rapidly scale to billions of devices, given the cloud footprint of AWS and AT&T's global network.

CSPs such as AT&T are viewed as being out in front in developing IoT capabilities and services, Donegan says, but what Amazon brings is "data analytics -- it's what they excel at."

The Heavy Reading analyst credits AT&T with being smart enough to recognize the power of a partnership with Amazon on the IoT side, instead of attempting to do that piece on its own.

More analysis on the intersection of web-scale and telecom companies can be found in the 60-page Heavy Reading report, Webscale Internet Companies: New Drivers Of The Network Equipment Market.

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

inkstainedwretch 10/6/2016 | 6:48:26 PM
Re: Verizon? The advent of the IoT has some potential to change the dynamic of the cloud market. Azure performance averages out well across several measures (bandwidth, throughput, latency, etc.), but the network doesn't excel consistently when it comes to any particular metric. (Nobody's cloud does).

Some applications, like autonomous vehicles, are going to require very, very strict guaranteed minimum latencies. A company that can guarantee those low latencies will have an advantage in specific applications categories.

That could very well be Azure, but it seems more likely it might be one of its competitors. It seems to me there's more incentive for an also-ran in the cloud market to tool its entire network for a set of narrowly defined (shall we even say "niche"?) applications. 

In short, the size/reach of any particular cloud might not be the key measure by which an IoT services company would evaluate a potential cloud partner. Or set of partners, given that nobody of size who's been in the cloud market for long relies on a single cloud provider anyway.  

-- Brian Santo

Carol Wilson 10/6/2016 | 3:32:09 PM
Re: Verizon? Good question. Verizon is also providing secure direct connections to cloud operators. They could hook up with someone else but no one has AWS' market power. They could try to work with AWS in areas where they have local footprint but the idea for a lot of this stuff is global reach. 
msilbey 10/6/2016 | 3:07:59 PM
Verizon? So what does Verizon do now? Form a deal with Google? Microsoft?
HK1960 10/6/2016 | 1:42:30 PM
A The tempo of their growth is insane. Great fusion!
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