AT&T signs content mega-deal with Bad Robot Productions

US telecoms and media giant AT&T has doubled-down on its Time Warner acquisition by committing to spend hundreds of millions of dollars more.

The deal is with Bad Robot Productions, which is run by Hollywood figure JJ Abrams and his wife Katie McGrath. The total value of the deal hasn’t been revealed, but media speculation ranges between $250-$500 million. Bad Robot gets involved in movies, TV, games and digital platforms and it looks like it will devote itself entirely to AT&T subsidiary Warner Media for the duration of the deal.

“WarnerMedia and AT&T are delighted to launch a long-term collaboration with our world-class partners and colleagues JJ Abrams and Katie McGrath,” said AT&T COO and CEO of WanrerMedia John Stankey. “We are extremely excited about the potential to deliver remarkable and memorable stories and characters across multiple platforms to audiences around the world.

“JJ, Katie and all of Bad Robot bring extraordinary vision, exquisite filmmaking, and exemplary industry leadership to this endeavour and our company. Across all forms of content, we are uniquely positioned to offer our creative partners a multitude of platforms to realize their artistic goals and ambitions, and to ensure that their stories have the best possible opportunity to connect with the right audience.”

“It is a thrill for Katie, Brian (Weinstein) and me and the rest of our team at Bad Robot to call WarnerMedia our company’s new home,” said Abrams. “John Stankey has a powerful vision for the future of WarnerMedia and is committed to storytelling that connects people around the world. We are excited and gratified to be a part of this new chapter under his and Ann Sarnoff’s thoughtful leadership.

“I could go on for hours, and probably will, about the extraordinary Peter Roth and the entire Warner’s television group, with whom we’ve worked for over a decade, and I’ve wanted to collaborate with Toby Emmerich and his team for as long as I can remember. I am grateful for the chance to write, produce and direct work for this incredible company, and to help create films and series with a diverse and vast collection of inspiring storytellers. We can’t wait to get started.”

With the launch of Apple + and Disney + in addition to the deep pockets of Netflix and Amazon the content world has never been more competitive. There’s an arms race underway regarding investment in premium content so AT&T needs to at least keep up if hopes to make its massive Time Warner acquisition a success.

Elliott’s vultures are circling AT&T

Activist investor Elliott Management has set its eyes on AT&T, suggesting the firm is bloated and undervalued, with ambitions to cut staff, clear out the leadership team and sell-off non-core assets.

In a letter sent to AT&T investors, Partner Jesse Cohn and Associate Portfolio Manager Marc Steinberg have attacked the firm and suggested a drastic turnaround strategy which includes divestments, retail location closures, job cuts and a change in mentality. It does appear shareholders are intrigued by the idea, with share price increasing 6% in pre-market trading.

“The purpose of today’s letter is to share our thoughts on how AT&T can improve its business and realize a historic increase in value for its shareholders,” the letter states.

“Elliott believes that through readily achievable initiatives – increased strategic focus, improved operational efficiency, a formal capital allocation framework, and enhanced leadership and oversight – AT&T can achieve $60+ per share of value by the end of 2021. This represents 65%+ upside to today’s share price – a rare opportunity for any company, let alone one of the world’s largest.”

For those who aren’t familiar with Elliott Management, this is not necessarily a move which is out of character.

Known as a ‘vulture fund’, the team search for businesses which it deems are undervalued and effectively enter to cause chaos. More often than not, the team suggests a complete overhaul of senior managers and a new strategy. This strategy often involves job cuts and asset stripping. Shareholders are brought on board with the promise of increased dividends and a boost in share price.

There are numerous examples where the team has attempted to muscle in on operations, with Telecom Italia (TIM) being the most relevant in recent history. At TIM, Elliott Management has been battling with Vivendi for control and a new strategy, and it does appear to be winning.

In the case of AT&T, Elliott Management is promising a 65% increase in share price by the end of 2021. This is an attractive promise as share price has barely moved over the last five years, from $34.50 on September 12, 2014 to $36.25 at the close of the markets on Friday (September 6, 2019). During this period, a high of $43.28 was experienced on August 12, 2016, and a low of $28.31 on December 21, 2018.

But how do these numbers compare to the share price of AT&T’s rivals over the last five years?

Telco Today 12 Sept, 2014 High Low
AT&T $36.25 $34.50 $43.28 $28.31
Verizon $59.06 $48.40 $60.30 $42.84
T-Mobile US $79.15 $30.83 $84.25 $25.31
Sprint $6.82 $7.00 $9.30 $2.66

Although AT&T is a dominant force in the US telco industry, it has seemingly not capitalised on the 4G revolution in the same way some of its rivals have, most notably T-Mobile US. To rub salt into the wounds, AT&T failed to acquire T-Mobile US in 2011, had to pay the largest break-up fee to date (at the time), and then provided the firm with a seven-year roaming deal and spectrum. This could perhaps be viewed as the turning point for the struggling T-Mobile US.

Another interesting assertion from the Elliott Management team is inability of the AT&T business to act in a timely fashion. This is another point CEO Randall Stephenson should be worried about, as Elliott Management claims AT&T did not deploy 4G aggressively enough and lost out to Verizon in the battle for first place. With 5G on the horizon, investors might well be worried about a repeat.

Ultimately, the biggest criticism is one of poor performance. Despite some very attractive numbers in the 90s and 00s, AT&T hasn’t really pushed on to capitalise on this momentum. In fairness, every telco around the world has suffered over the course of the last decade thanks to the growing influence of the OTTs, but this point has been conveniently ignored in the Cohn and Steinberg letter.

However, it is the acquisition strategy is one of the biggest points made.

“In recent periods, however, AT&T has embarked upon a very different sort of M&A strategy,” the letter states. “Over a series of deals totalling nearly $200 billion, AT&T built a diversified conglomerate by pushing into multiple new markets.

“In each case, the push was as significant as possible. Beginning the decade as a pure-play telecom company with leading wireless and wireline franchises, AT&T has transformed itself into a sprawling collection of businesses battling well-funded competitors, in new markets, with different regulations, and saddled with the financial repercussions of its choices.”

The telco industry has changed in the last decade, and Elliott Management clearly doesn’t agree it is for the better. In the 90s and 00s, acquisitions were connectivity orientated, while recent years have seen an aggressive push into the world of digital services, diversifying products which can be offered to the consumer.

This is one of the critical points the Elliott Management team is levying towards AT&T; its acquisition strategy has not been effective. The failure to merge with T-Mobile US is a critical point, but since that point the team has spend more than $200 billion to create a beast of a business. Some have suggested this was necessary to diversify the business in preparation for the digital economy, however this is not the opinion of Elliott Management.

We do not agree with Elliott Management here. Convergence is a sound business model which moves the telco into the value-add column. A more stringent focus on connectivity will walk the telco down the road of utilitisation, opening the industry up to more aggressive regulations and price controls. This is not the direction many telcos want to head, but Elliott Management does seem to like the profits driven out of a business which focuses on operational efficiencies and little else.

Let’s not forget the Elliott Management business model after all. Identify underperforming shares, disrupt the business model for short-term share price rises and then sell the stock, while collecting meaty dividends along the way. If Elliott Management gets it way, AT&T will be a utilitised business, with fewer assets. It might not be a competitive force in a decade, when other telcos are reaping the benefits of diversification. However, Elliott Management will not care by that point.

Perhaps the three most important points of the plan set forward by Elliott Management are:

  1. A change in strategic direction from acquisition to executive
  2. Clearing out the current management team
  3. Divestment in non-core assets

There are other points made, such as closing redundant retail locations, negotiating more authorised third-party retailers, cutting back on the over-bureaucracy, simplifying the management structure and redundancies. However, we feel the three mentioned above are perhaps the most important for investors.

By shifting from an acquisition mind-set to an execution one, and making the suggestion of divestments, it would appear the AT&T business is one which will be focused more acutely on traditional telecommunications services. The tone of the letter does not suggest Elliott Management believe the content world is one which can bring fortunes, and the way in which the team discuss the success of T-Mobile US also alludes to this new, narrowed focus.

What does this mean for the very expensive content acquisitions? Perhaps nothing, or perhaps everything. We suspect the idea from Elliott Management would be to silo each of the business units, allowing a more lasered focus on core revenues in the siloes. There might well be cross-selling opportunities, but the language used by Cohn and Steinberg suggests digital services and ambitious convergence is not on the agenda.

The proposed strategy to realise the 65% increase in share price is one of simplicity, enhancing what is currently in the armoury and taking a more traditional approach to the business of connectivity.

And while there might be thousands of nervous employees throughout the organization worried of the prospect of job cuts, the senior management team should be much more concerned. After interviewing various former-executives, Elliott Management has come to conclusion that the executive management team does not have the right skillset to tackle the challenges which AT&T is facing today.

Should Elliott Management get its way, heads could roll, and the leadership team could look remarkably different. Elliott Management is also seeking greater influence for the Board of Directors, another common play from the team. The activist investor often looks to secure positions to friendlies at the companies it has in its crosshairs, and it will certainly want to exert more control on the strategy moving forward.

If Elliott Management gains control and influence at AT&T, it could look like a very different business. The investor believes it has identified $10 billion in cost-efficiencies would can be realised through spending $5 billion. This does not account for any divestments which would be made though. AT&T might well have fewer retail locations, a smaller headcount, a new management team, a lessened focus on content and digital services and a more utilised business model in the near future.

This is only the beginning of this saga, Elliott Management will certainly have a wrestle on its hands to gain control, but it does have good form when it comes to forcing through disruption.

AT&T tries to breathe McElfresh air into its communications division

US operator giant AT&T has unveiled lifer Jeff McElfresh CEO of AT&T Communications, replacing the retiring John Donovan.

McElfresh has been at AT&T for 25 years and was most recently President of AT&T Communications’ Technology and Operations group, which covers the techie side of things. Since we’re at the start of the switch to a new generation of mobile technology it would seem to make sense to promote someone from that side of the business. They could, of course, have recruited externally, but that doesn’t seem to be AT&T’s style.

AT&T CEO Randall Stephenson doesn’t seem to fancy dealing with McElfresh on a regular basis, however, as he has created a new COO position that will be filled by John Stankey, who is currently in charge of all the stuff AT&T got with its massive Time Warner acquisition. He will now manage McElfresh as well at Warner Media and will also be the direct report for Brian Lesser, CEO of the AT&T’s digital advertising platform Xandr.

“Now is the time to more tightly align our collection of world-class content, scaled consumer relationships, technical know-how and innovative advertising technology,” said Stephenson.  “It’s the natural next step in bringing together the distinct and complimentary capabilities of AT&T Communications, WarnerMedia and Xandr to deliver for consumers the benefits of a modern media company.

“AT&T is alone in the industry in being able to bring together these three great businesses for the launch of innovative consumer offers, relevant advertising and new entertainment services like HBO Max.

“John is an outstanding executive who has led nearly every area of our business, helped shape our strategy and excelled at operations throughout his career. The Board and I look forward to John hitting the ground running in his new role as president and COO.

“And I’m excited to have Jeff leading our communications business into the future. He is an accomplished leader with experience across our business — from strategy, technology and network, to marketing, operations and customer experience. This past year, Jeff led the team that won AT&T recognition for having the best, fastest and most reliable wireless network in the country.”

You have to wonder what that leaves for Stephenson to do, other than approve canned quotes for press releases. Still, he’s been a t the helm for 12 years so he’s earned the right to spend more time with his golf clubs.

AT&T employee corruption case revealed

For several years AT&T employees were bribed to unlock subsidised smartphones so they could then be resold.

The corruption lasted for at least five years from 2012 and has only come to light thanks to court documents being recently unsealed. ZDNet was the first on the scene and it reports that a couple of baddies called Muhammad Fahd and Ghulam Jiwani were charged by the US DoJ with shelling out more that a million bucks in bribes to AT&T employees in order to get them to unlock phones identified by specific IMEI codes.

Apparently this direct approach was soon uncovered by AT&T, which fired those involved, so the defendants then switched to a more indirect approach. They bribed a new lot of AT&T employees to install malware on the network, which they then used to acquire credentials that allowed them to unlock phones directly themselves. Apparently one AT&T employee alone trousered over $400,000 from all this naughtiness.

It’s not clear exactly how the baddies profited from unlocking all these phones but a couple of methods are suggested. One is that they simply ran an unlocking service for other people and another is that they effectively stole the subsidised phones by unlocking them and then bailing on the postpaid contracts that doubled as hire purchase agreements.

It should be noted that there is no suggestion that any of this corruption of AT&T employees involved access to customer data and it certainly seems to have come to a stop now.

AT&T joins the retail robot revolution

AT&T Business has unveiled a new partnership to target the retail segment, a vertical which might look completely different in a few years’ time.

Working alongside Badger Technologies, the aim here is to improve capabilities which are already in place as opposed to create a human-less shopping experience. With its new 5G capabilities, improvements for indoor coverage and expansion of MEC, the duo are targeting operational efficiencies throughout the super market.

“In-building cellular solutions, including 5G and edge computing, are critical drivers of digital transformation for retailers,” said Mo Katibeh, CMO of AT&T Business.

“These technologies will eventually equip robots with both the compute power and lower latency needed to increase revenue, improve the in-store experience, and elevate employees to better assist customers. Badger Technologies’ robots can help retailers make sure they have products in stock and in the right place, increasing customer satisfaction. That leads to increased revenue. That’s the power of data.”

Robots in supermarkets are not exactly a new idea. In some of the larger retailers in the US, small robots roll through the aisles hoping to identify out-of-stock, mispriced or misplaced inventory as well as store hazards, informing human colleagues of up-coming tasks which need to be completed. However, running these systems over wifi can be inefficient and even impossible when it comes to transmission and processing of data.

Although this is a very simple application focused on improving efficiency as opposed to revolutionising the retail experience, it is an incremental step towards automation in the industry. In a few years’ time, there might not be any need to have humans working in the supermarket whatsoever; MEC and improved connectivity will be critical components.

Firstly, you have to look at the home delivery segment. Not all consumers will buy into this concept, however with improved connectivity, this could be a completely autonomous process. Amazon fulfilment centres already incorporate robotic processes to reduce the need for humans, whereas progress is being made on autonomous vehicles and small robots to make the delivery over the ‘last mile’. In theory, this does not have to have a single human in the process.

One other area which seems to attract headlines every couple of weeks are the cashier-less stores. The concept is not new, self-check out machines are becoming increasingly common, though this idea could be taken up another level. Amazon is once again making progress here, potentially removing the need for self-scan tills completely, though improvements in indoor connectivity and MEC could help this idea progress even further.

Finally, you only have to look at companies like Boston Dynamics to see the advancements which are being made with humanoid robots. Cashiers are heading towards the door and it might not be too long before shelf-stackers might follow them. Robotics is a field which is advancing ridiculously fast (see video at the bottom of article), and while the economics will not make sense for the moment, that is only a matter of time.

The warehouse could be robotic, payments could be managed through sensors and apps, on-shelf-stock and hazards could be monitored by simplistic robotics and cameras, restocking and hazards cleared by advanced robotics and deliveries could be performed by drones or autonomous vehicles. With MEC decreasing latency, cloud-based AI constantly improving all the processes and indoor connectivity ensuring everything runs smoothly, soon enough there might not be any need to have a human involved in the supermarket.

This might seem like an unrealistic idea right now, but always remember this Bill Gates quote; most people overestimate what they can do in one year and underestimate what they can do in ten.

AT&T gets Microsoft and IBM to help with its cloud homework

US telco AT&T has decided it’s time to raise its cloud game and so has entered into strategic partnerships with Microsoft and IBM.

The Microsoft deal focuses on non-network applications and enables AT&T’s broader strategy of migrating most non-network workloads to the public cloud by 2024. The rationale for this is fairly standard: by moving a bunch of stuff to the public cloud AT&T will be able to better focus on its core competences, but let’s see how that plays out.

IBM will be helping AT&T Business Solutions to better provide solutions to businesses. The consulting side will modernize its software and bring it into the IBM cloud, where they will use Red Hat’s platform to manage it all. In return IBM will make AT&T Business its main SDN partner and general networking best mate.

“AT&T and Microsoft are among the most committed companies to fostering technology that serves people,” said John Donovan, CEO of AT&T. “By working together on common efforts around 5G, the cloud, and AI, we will accelerate the speed of innovation and impact for our customers and our communities.”

“AT&T is at the forefront of defining how advances in technology, including 5G and edge computing, will transform every aspect of work and life,” said Satya Nadella, CEO of Microsoft. “The world’s leading companies run on our cloud, and we are delighted that AT&T chose Microsoft to accelerate its innovation. Together, we will apply the power of Azure and Microsoft 365 to transform the way AT&T’s workforce collaborates and to shape the future of media and communications for people everywhere.”

“In AT&T Business, we’re constantly evolving to better serve business customers around the globe by securely connecting them to the digital capabilities they need,” said Thaddeus Arroyo, CEO of AT&T Business. “This includes optimizing our core operations and modernizing our internal business applications to accelerate innovation. Through our collaboration with IBM, we’re adopting open, flexible, cloud technologies, that will ultimately help accelerate our business leadership.”

“Building on IBM’s 20-year relationship with AT&T, today’s agreement is another major step forward in delivering flexibility to AT&T Business so it can provide IBM and its customers with innovative services at a faster pace than ever before,” said Arvind Krishna, SVP, Cloud and Cognitive Software at IBM. “We are proud to collaborate with AT&T Business, provide the scale and performance of our global footprint of cloud data centers, and deliver a common environment on which they can build once and deploy in any one of the appropriate footprints to be faster and more agile.”

Talking of the US cloud scene, the Department of Defense is reportedly looking for someone to provide some kind of Skynet-style ‘war cloud’ in return for chucking them $10 billion of public cash. Formally known as the Joint Enterprise Defense Infrastructure (yes, JEDI), this is designed to secure military and classified information in the event of some kind of catastrophic attach, contribute to cyber warfare efforts and enable the dissemination of military intelligence to the field.

It looks like the gig will be awarded to just one provider, which had led to much jostling for position among the US cloud players. The latest word on the street is that either AWS or Microsoft will get the work, which has prompted considerable moaning from IBM and Oracle and reported concern from President Trump, prompted by politicians apparently repaying their lobbying cash. Here’s a good summary of all that from Subverse.

AT&T gets streaming with HBO Max

Gone are the days when the consumer could get all the content they wanted in one place as AT&T’s WarnerMedia joins the streaming landgrab.

With Netflix, Amazon Prime, Hulu, Disney, HBO and numerous other streaming services on the market before too long, the fragmentation of content is looking like it could be a serious problem for the consumer. Whether splitting the spoils has an overarching negative impact on the segments profits remains to be seen, but customers wallets can only be pushed so far; how many streaming services can each customer be expected to have?

That said, AT&T is in a strong position with this proposition. In HBO, it owns a lot of promising content already, playing into consumer nostalgia, and it does seem to be heading in the right direction in terms of original programming.

“HBO Max will bring together the diverse riches of WarnerMedia to create programming and user experiences not seen before in a streaming platform,” said Robert Greenblatt, Chairman of WarnerMedia Entertainment and Direct-To-Consumer.

“HBO’s world-class programming leads the way, the quality of which will be the guiding principle for our new array of Max Originals, our exciting acquisitions, and the very best of the Warner Bros. libraries, starting with the phenomenon that is ‘Friends’.”

With the service set to debut in Spring 2020, AT&T is promising 10,000 hours of programming from the outset. Full series of ‘Fresh Prince of Bel Air’, ‘Friends’ and ‘Pretty Little Liars’ will feature in the content library, as well as new dramas such as ‘Batwoman’ and ‘Katy Keene’.

Looking at future Max Original series, the list is quite extensive. ‘Dune: The Sisterhood’ is an adaptation of Brian Herbert and Kevin Anderson’s book based in the world created by Frank Herbert’s book Dune. ‘Lovecraft Country’ is a horror series based on a novel by Matt Ruff. ‘The Plot Against America’ will be a reimagined history based on Phillip Roth’s novel.

The ingredients are all in place to ensure AT&T makes a sustained stab at cracking the streaming market which has been dominated by the OTTs to date. There are a couple of questions which remain however.

Firstly, pricing. Can executives price the service competitively while also sustaining investments in content? Secondly, experience. Will the platform meet the high-expectations set by consumers thanks to the high-bar set by Netflix? And finally, culture. Will AT&T allow WarnerMedia to operate as a media business or will it impose the traditional mentality of telcos onto the business?

AT&T has bet big on the content world and it can ill-afford to fluff its lines on its debut. Having signed an $85 billion deal to acquire Time Warner and spent what seems like decades battling various government departments to authorise the transaction, the telco will need to see some ROI sooner rather than later.

The question is whether the momentum in the streaming world can be sustained. Platforms like Netflix, Hulu and Amazon Prime were attractive in the early days because there was consolidation of content onto a single library. With more streaming services becoming available, the fragmentation of content might well become a problem before too long. Consumers will have to make choices on what service to subscribe to, limiting the profits of the individual providers.

The days of subscribing to everything might be a thing of the past before too long; wallets can only be pushed so far.

Diversification into profitable segments is certainly a sensible strategy in the days of meagre connectivity profits, but $85 billion is a lot to spend on a hunch.

Q&A with Rupesh Chokshi – Assistant Vice President, Edge Solutions Product Marketing Management, AT&T Business

Telecoms.com periodically invites third parties to share their views on the industry’s most pressing issues. Rupesh Chokshi is a leader in technology with a strategic focus for growth in global technology and telecommunications. He currently leads the product marketing team within Edge Solutions for AT&T Business which focuses on product management, strategy and business development, and is transforming services and networks using software-defined networking (SDN), network function virtualization (NFV) and SD-WAN technologies.

To help determine the state of virtualization today, Light Reading spoke with Rupesh Chokshi – Assistance Vice President, Edge Solutions Product Marketing Management at AT&T Business – and one of the industry leading experts presenting at this years’ Network Virtualization & SDN Americas event in September.

Light Reading (LR): How has network virtualization evolved in the last three years?

Rupesh Chokshi (RC): AT&T has been in the business of delivering software-centric services for several years, and we’ve seen adoption from businesses looking to update their infrastructures, increase their agility and transform their businesses. Networks are almost unrecognizable from what they used to be – data traffic on our mobile network grew more than 470,000% since 2007, and video traffic increased over 75% in the last year. Given the new network demands, companies need to adapt by changing the way they manage networks.

We took a unique approach with our infrastructure ability by using software-defined network (SDN) and network function virtualization (NFV) with our own network, meeting our goal of 65% virtualized network by 2018 and setting us up to achieve our goal of 75% virtualization by 2020. At the same time we started using SDN and NFV in our own network, we utilized SDN to deliver AT&T’s first SDN service, AT&T Switched Ethernet Service with Network on Demand (ASEoD). This allowed thousands of customers to provision and manage their network in a fraction of the time it took in the past, and now enables them to scale bandwidth on demand to meet their business’ seasonality.

ASEoD was only the first of a series of solutions we are creating to address shifting network needs. Three years ago, we introduced our first global software-based solution, AT&T FlexWareSM, which uses both SDN and NFV to increase business agility by simplifying the process for dynamically adding and managing network functions.

LR: What technology developments are you most excited about for in the future?

RC: The work we did up to this point to deliver SDN within our network and for our customers set us up for the next generation of wireless technology, 5G. As the first SDN-enabled wireless technology, and the first wireless network born in the cloud, 5G will ultimately enable new use cases that take advantage of network slicing, the ability to support a high number of IoT devices and greater low-latency edge compute capabilities.

In addition, we are collaborating with VMWare SD-WAN by VeloCloud to implement 5G capabilities into our software-defined wide area networking (SD-WAN). This will give business new levels of control over their networks and is key for companies looking to use SD-WAN with a high-speed, low-latency 5G network as their primary or secondary WAN connection type.

LR: How can businesses move forward with virtualization today?

RC: Today, businesses need to make sense of data faster and more efficiently than ever before, which is driving businesses to evaluate how they use their network for all applications, and to find ways to maximize their resources. One-way companies can do this and move forward with virtualization is through AT&T’s comprehensive SD-WAN portfolio. AT&T’s SD-WAN technology supports this new way of working by letting companies define policies based on individual business needs using centralized software-based control.

LR: How can businesses determine the business benefits and ROI of virtualization today?

RC: Businesses can determine the business benefits of virtualization through cost savings, application-level visibility and near real-time analytics.

Potential cost savings is one of the key benefits of SD-WAN that is touted by technology suppliers and service providers alike. In our experience, it is during the process of fleshing out the technical details of the solution and how to best integrate it into their network that enterprises begin to fully appreciate where those cost benefits may come from, as well as understanding other benefits or features that may also be important to them. Keep in mind the importance of considering potential cost savings in the context of total cost of ownership, not just looking at the relative cost of the CPE vs. the cost of the network access.

Additionally, SD-WAN technology can provide more application-level visibility and control on a per site basis, and these capabilities go far to help customers assess and experience the benefits of the performance of their network access and transport.

SD-WAN also enables customers to access analytics in near real time or on a historical basis for bandwidth consumption and application visibility. This is instrumental in setting KPIs and measuring ROI and planning for future network growth.

LR: What virtualization strategies should businesses be focusing on?

RC: Businesses need to adopt efficient, high-performing networks to take advantage of the newest technology and bandwidth needs. Automation is a great example of this. As businesses require more bandwidth, we need to provide more elegant solutions in order for them to take full advantage of more ubiquitous, high-speed broadband.

Additionally, while digital transformation is top of mind for businesses of all sizes and in every industry, dynamic SD-WAN is still in a relatively early stage of growth and adoption. And for others, MPLS and IPsec remain important options. Hybrid WAN designs will continue to be popular as customers utilize multiple technologies (MPLS, IPSec, SD-WAN) for optimal results.

LR: How can businesses build these technologies into their long-term business models?

RC: We live in a digital economy, and AT&T provides fundamental platforms for businesses to grow, differentiate and innovate. We work with businesses of all sizes to help transform their long-term business models through technology solutions delivered in the form of a managed service. Customers come to us because of our expertise, breadth and depth of capabilities, global scale and innovation in areas such as software defined networking, network function virtualization, mobility, IoT and SD-WAN.

As businesses grow, they need to think about their overall networking health. And how they can use their networks to meet all their business objectives. Key considerations in bringing that to life include:

  • Holistic solutions that can combine SD-WAN functionality with network services from AT&T or other providers, virtualized CPE, wired and wireless LAN, security, voice over IP and much more;
  • Reduced operational expense and less need for in-house expertise with a managed solution that handles all aspects of the end-to-end solution design and setup;
  • Global deployment options that remove the headaches of onsite installation and support in countries around the world; and
  • Flexible SD-WAN policy management where the customer can choose to set and update application level policies themselves or rely on AT&T experts to manage this for them.

Want to deep dive into real-world issues and virtualization deployment challenges with Rupesh and other industry leaders?

 

Join Light Reading at the annual Network Virtualization& SDN Americas event in Dallas, September 17-19. Register now for this exclusive opportunity to learn from and network with industry experts. Communications service providers get in free!

AT&T + HPE = edgy TLC

AT&T has announced a new partnership with HPE to drive the benefits of edge computing in enterprise services.

The duo has agreed a go-to-market strategy to accelerate business adoption of edge connections and edge computing, seen by some as one of the most interesting areas of the up-coming 5G economy.

“AT&T’s software-defined network, including our 5G network, combined with HPE’s intelligent edge infrastructure can give businesses a flexible tool to better analyze data and process low-latency, high-bandwidth applications,” said Mo Katibeh, CMO of AT&T Business. “Bringing compute power closer to our network helps businesses push the boundaries of what is possible and create innovative new solutions.”

“HPE believes that the enterprise of the future will need to be edge-centric, cloud-enabled and data-driven to turn all of its data into action and value,” said Jim Jackson, CMO of HPE. “Our go-to-market alliance with AT&T, using HPE Edgeline Converged Edge Systems, will help deliver AT&T MEC services at scale to help our customers more quickly convert data into actionable intelligence, enabling unique digital experiences and smarter operations.”

There are of course many benefits to edge computing, though one of the areas AT&T will be hoping to address through this tie-up will be the security concerns which will emerge. This looks like it could be one of the key marketing plugs of the AT&T proposition, as its Multi-access Edge Compute (MEC) Services will hope to drive the benefits of mobility to enterprise customers.

From HPE’s perspective, the team will be contributing on the low-latency side of the 5G euphoria. HPE suggests its Edgeline Converged Edge Systems could help create use cases where applications can reside on premises for lower latency processing.

It might not be as ‘sexy’ as plugging ridiculous download speeds, but the greatest benefits of 5G to the telcos would appear to be diversification as opposed to increased squeeze on the wallets of consumers. With more data being created each day, the edge will become increasingly important to activate products, services and business models in a faster and more operationally efficient manner. Enterprise organizations will largely be unaware of how to reap the greatest benefits, a pleasant niche the telcos could certainly profit from.