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AT&T Business Solutions: betting on the smart pipe
June 2, 2010 | Chris Payatagool
From: Evan Kirchheimer via Ovum
Last week, AT&T Business Solutions held its annual industry analyst conference at its global network operations center in Bedminster, New Jersey. Together with a flurry of press releases announcing customer wins and service extensions, AT&T sent a clear message that its strategy of basing growth on its own intelligent network has paid off, and will continue to do so.
Owned network infrastructure as the differentiator, but with implications
In his keynote address, AT&T's head of Business Solutions, Ron Spears, laid his cards on the table succinctly when he stated that "the importance of owned network infrastructure, wired and wireless, and an owned wireless asset in which there are completely integrated sales, marketing, and product teams is an incredible differentiator in this market". Spears' statement is evidence of a strategy both less exuberant and more realistic than those adopted by other operators that aspire to global services greatness. Some emphasized business solutions as their primary differentiators, and thus ended up competing head-to-head with global SIs.
But there are implications to an owned-network approach. Today's operator must walk a thin line: networks, even intelligent ones, can become easily commoditized. Yet it is exactly the network - and the technical, applications, and service management expertise that comes with it - that gives operators their advantage. AT&T should focus on these; so far, we believe it largely has.
"The economics of access" mean AT&T will remain selective
Spears' message and emphasis on owned network assets is consistent with the approach that AT&T has taken since 2006: to be more selective with its international customers. Since then, AT&T has focused its efforts among MNCs on customers and prospects with business on at least three continents and a quarter of their requirements in the US, which it says covers approximately 1,800 companies.
It intends to continue to select opportunities based on these criteria, with Spears noting that AT&T Business has benefited from double-digit revenue growth from business originating outside the US in 2009. Spears held firm when questioned about international expansion to the mid-market, emphasizing that "the economics of access" dictated that margins were not attractive in the international mid-market, as it would not be able to leverage its advantage in US local access in such deals.
Network centricity means that AT&T views IP transformation as the driver for applications
In a market where attention tends to be drawn to business solutions, AT&T has taken a bottom-up approach, building a series of network-centric solutions which bring business value but remain clearly within an operator's purview. The operator highlighted three key applications: telepresence, network-based firewalls, and unified communications (UC).
Most notable among the applications are strides made in telepresence and UC. AT&T presented its latest telepresence solution and elaborated on its plans for offering a federated UC service which would enable collaboration between enterprises that have invested in different UC platforms. AT&T has backed up its investment in these areas with deals. Marriott is in the process of installing 25 telepresence rooms in sites across the globe as part of its new "GoThere Virtual Meetings" service (six rooms are currently available). And in a $90 million engagement, AT&T will UC-enable 150,000 Shell employees in what is by any standards one of the largest UC rollouts to date. The deal with Shell has the potential to give AT&T a scale and depth of experience in UC which is rare among operators.
"We're going to mobilize everything", and "M2M is a wholesale business"
Citing the transformational nature of mobile computing, Spears' final component in his network-centric strategy is enterprise mobility. AT&T announced the creation of its Advanced Enterprise Mobility Solutions group, headed by Michael Antieri, within the Business Solutions unit. Antieri's team is intended to complement the Emerging Devices organization, focusing on mobile application development, sales, and deployment. This news, along with AT&T's announcement that its managed mobility service would now be available in 60 countries (up from 40), has sent a clear signal that AT&T plans heavy investment in the managed mobilization of data and applications.
However, in our opinion, questions remain over the readiness of MNCs to adopt global managed mobility, and over the success of AT&T's M2M strategy. Spears has cited the significant opportunity which M2M offers (alluding to reasonable margins), and at the same time has stated that "M2M is a wholesale business". We will look for evidence of international managed mobility contracts and insight into M2M revenues and volumes in the coming months.
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About:
This article is an extract taken from Ovum's Straight Talk service.
Last week, AT&T Business Solutions held its annual industry analyst conference at its global network operations center in Bedminster, New Jersey. Together with a flurry of press releases announcing customer wins and service extensions, AT&T sent a clear message that its strategy of basing growth on its own intelligent network has paid off, and will continue to do so.Owned network infrastructure as the differentiator, but with implications
In his keynote address, AT&T's head of Business Solutions, Ron Spears, laid his cards on the table succinctly when he stated that "the importance of owned network infrastructure, wired and wireless, and an owned wireless asset in which there are completely integrated sales, marketing, and product teams is an incredible differentiator in this market". Spears' statement is evidence of a strategy both less exuberant and more realistic than those adopted by other operators that aspire to global services greatness. Some emphasized business solutions as their primary differentiators, and thus ended up competing head-to-head with global SIs.
But there are implications to an owned-network approach. Today's operator must walk a thin line: networks, even intelligent ones, can become easily commoditized. Yet it is exactly the network - and the technical, applications, and service management expertise that comes with it - that gives operators their advantage. AT&T should focus on these; so far, we believe it largely has.
"The economics of access" mean AT&T will remain selective
Spears' message and emphasis on owned network assets is consistent with the approach that AT&T has taken since 2006: to be more selective with its international customers. Since then, AT&T has focused its efforts among MNCs on customers and prospects with business on at least three continents and a quarter of their requirements in the US, which it says covers approximately 1,800 companies.
It intends to continue to select opportunities based on these criteria, with Spears noting that AT&T Business has benefited from double-digit revenue growth from business originating outside the US in 2009. Spears held firm when questioned about international expansion to the mid-market, emphasizing that "the economics of access" dictated that margins were not attractive in the international mid-market, as it would not be able to leverage its advantage in US local access in such deals.
Network centricity means that AT&T views IP transformation as the driver for applications
In a market where attention tends to be drawn to business solutions, AT&T has taken a bottom-up approach, building a series of network-centric solutions which bring business value but remain clearly within an operator's purview. The operator highlighted three key applications: telepresence, network-based firewalls, and unified communications (UC).
Most notable among the applications are strides made in telepresence and UC. AT&T presented its latest telepresence solution and elaborated on its plans for offering a federated UC service which would enable collaboration between enterprises that have invested in different UC platforms. AT&T has backed up its investment in these areas with deals. Marriott is in the process of installing 25 telepresence rooms in sites across the globe as part of its new "GoThere Virtual Meetings" service (six rooms are currently available). And in a $90 million engagement, AT&T will UC-enable 150,000 Shell employees in what is by any standards one of the largest UC rollouts to date. The deal with Shell has the potential to give AT&T a scale and depth of experience in UC which is rare among operators.
"We're going to mobilize everything", and "M2M is a wholesale business"
Citing the transformational nature of mobile computing, Spears' final component in his network-centric strategy is enterprise mobility. AT&T announced the creation of its Advanced Enterprise Mobility Solutions group, headed by Michael Antieri, within the Business Solutions unit. Antieri's team is intended to complement the Emerging Devices organization, focusing on mobile application development, sales, and deployment. This news, along with AT&T's announcement that its managed mobility service would now be available in 60 countries (up from 40), has sent a clear signal that AT&T plans heavy investment in the managed mobilization of data and applications.
However, in our opinion, questions remain over the readiness of MNCs to adopt global managed mobility, and over the success of AT&T's M2M strategy. Spears has cited the significant opportunity which M2M offers (alluding to reasonable margins), and at the same time has stated that "M2M is a wholesale business". We will look for evidence of international managed mobility contracts and insight into M2M revenues and volumes in the coming months.
----------------------------------------------------------------------------------------------------------------------------
About:
This article is an extract taken from Ovum's Straight Talk service.
