AT&T Analyst Conference – The Three Networking Things Vendors and Carriers Need to Know

Jason Marcheck

Jason Marcheck

Summary Bullets:

  • AT&T’s Consumer Industry Analyst Conference was held in Atlanta on November 2 and 3, offering network analysts a peek into the strategies of one of telecom’s most influential market makers.
  • AT&T, rightly in our opinion, views virtualization as the key to maintaining cost parity with OTTs and other, more nimble SPs.

I had two personal epiphanies at AT&T’s 2014 Consumer Industry Analyst Conference (CIAC) earlier this week in Atlanta. First, Atlanta is a great city for a quick business trip. It has a temperate late fall climate. Getting to/from the city is fairly easy. It has a preponderance of cheap, nice hotels and features a deep-rooted mastery at frying up extremely tasty southern cuisine. Second, carrier conferences are an infrastructure analysts’ equivalent of finding money in the pocket of one’s jeans.

At vendor conferences, we typically hear well-crafted, tightly messaged presentations on how the world that we size and/or analyze should be. At AT&T’s conference, I heard a heavy dose of presentations on how the world will be… at least AT&T’s part of it.

Though a Twitter ban and NDA agreements keep us from spilling too many beans, it’s fair to say that AT&T is both keenly aware of its place in the proverbial food chain and highly self-motivated to take the financial and organizational steps to keep it that way. While much of the conference focused on the company’s consumer strategies and service offerings, I keyed on three important networking-related takeaways that will give the smart vendors out there a license to work for the foreseeable future.

  1. Network Virtualization. I know, obvious, right? To an extent, yes. However, the motivation behind the virtualization strategy that AT&T shared was enlightening in its simplicity. While we’re all familiar with the conundrum that OTTs and other, more nimble digital service providers pose, AT&T’s network head, John Donovan, put it succinctly. By their nature, fully redundant carrier-grade networks can only operate at a maximum of 50% efficiency. However, if a software-based competitive service provider can write code that results in upwards of 90% network utilization, there is no way an incumbent carrier can profitably compete (even at “fairly” legislated retail network access rates). So, the CapEx, OpEx and service enablement virtues of virtualization notwithstanding, at its core, SDN/NFV at AT&T is about survival. Odd, but despite all the hype, I came away from AT&T’s conference wondering if most operators in the world are being aggressive enough on virtualization.
  2. Network Security. Also obvious, right? To an extent, yes. However, there’s no doubt that enterprise mobility is a key new carrier revenue-generation battleground. To wit, AT&T highlighted that it serves every company in the Fortune 1000. While few rival carriers can match that assertion, the clear implication is that AT&T (and its peers, both large and small) needs security solutions from its suppliers that are simultaneously big, strong and flexible. As such, security solutions will become a key differentiator within the network equipment vendor crowd.
  3. People and Process. Not so obvious… but it should be. For every ten articles and/or analyst reports written about LTE-A, small cells, the digital telco, et al., there are virtually zero written about the people and processes that get these technologies deployed and/or business processes aligned within a carrier. For its part, AT&T talked plenty about people and processes. It is being aggressive in transforming the way its IT and telco operations interact to understand, embrace and adopt virtualization on a large scale. All new projects are carried out in a DevOps model. It is aligning its mobility and business services groups to more holistically address the enterprise mobility opportunity. Its network architecture groups now consider both fixed and mobile network access as parts of a larger whole. In short, AT&T has lots of people and seems to be intent on affecting lots of change to ensure that its processes support, rather than hold back, strategic objectives.

There you have it. Aggressive, progressive and, probably, the way things are going to be come 2020.

About Jason Marcheck
Jason is Research Director for the Current Analysis Service Provider Infrastructure service. Jason and his analyst team monitor and evaluate activities in the markets for Digital Media, Fixed Access, IP Services, Mobile Access, and Transport and Routing Infrastructure, Telecom Vendor Services, and the Service Enablement Ecosystem.

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