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AT&T CEO: Cloud Is "Very, Very Important To Us" - And It's Just Like Outsourcing

Largest US Telco Talks Cloud Talk, But The Walk Is Another Story

In an outtake from a sweeping interview in the Sunday edition of the Dallas Morning News, AT&T CEO Randall Stephenson tipped his hand just a bit, providing a peek at where the telecom giant might be headed with cloud computing and more than a peek at what might follow the end of AT&T's iPhone exclusivity - hint: it starts with "A" and ends with "ndroid".

These days, every telecom carrier has a cloud angle.  Within the past week, we have seen cloud computing announcements from Verizon in the US and SingTel in Singapore, with many more to come, no doubt.  (For an interesting perspective on what's the deal with telcos and the cloud, check out Roger Strukoff's insightful new article in Cloud Computing Journal.)

AT&T CEO shows off his new Android smart phone, a Samsung Captivate. Photo by David Woo/DMN

So, naturally, when the top guy at the top US telco mentions cloud computing, it won't go unnoticed.  But, then again, AT&T is not exactly a utility computing virgin and its ascent into the cloud has already been a long and jagged flight path, so this could go either way.

The company was actually one of the first carriers to enter the cloud services business.  In August 2008, AT&T announced its "Synaptic Hosting" service, a cloud-washed blend of ASP services and managed hosting.   It was pointedly differentiated from then-new Amazon EC2 in a manner oblivious to the substance and significance of the Amazon technology, touting "enterprise-level" infrastructure, SLAs, and support for off-the-shelf applications, and saying nothing about the chalk-and-cheese differences between Amazon's new, new thing and AT&T ‘s same old same old.

Nine months later, the company launched "AT&T Synaptic Storage as a Service", a cloud storage offering based on EMC's Atmos technology.  In addition to the obvious customer cost benefit of renting space on AT&T's disks versus buying a disk farm, the company also asserted the substantially specious benefit of "flexibility to companies that have volatile or fluctuating storage needs."  In what universe does any typical company's data volume do anything but increase?  Nonetheless, AT&T was learning that real cloud vendors always include the often hypothetical case of "scale down" in their sales pitches.

Then, at the end of last year, the company announced the strangely (verb as a noun) named "AT&T Synaptic Compute as a Service".  Sporting the cloud purist memes of "on-demand" and "self-service", the sales pitch positioned AT&T's new service as a seamless extension of the customer's in-house horsepower that could be engaged when needed to handle peak loads and turned off when things quieted down.   It was sold as a supplement, not an alternative, to in-house computing.

On this outing, the company had two partners, VMware and Sun.  The offering assumed that the customers would already be using VMware internally to run their own "private clouds" and, when the workloads redlined there, they could automatically spill over to AT&T's VMware-based public cloud.  That was a big assumption.  For its part, Sun would provide its hardware, cloud platform architecture, and cloud APIs for new applications.  That was an even bigger assumption.  AT&T made this announcement in November 2009, eight months after Sun accepted Oracle's bid to buy it, two months after Larry Ellison's snarky cloud-hating rant at the Churchill Club, and less than two months before Ellison took an ice pick to Sun's lofty cloud leadership aspirations.

Presently, if you visit the cloud page on the AT&T web site, you will see that Synaptic Storage as a Service and Synaptic Compute as a Service have survived time and carnage, respectively, and together form the basis of the company's current cloud offering.  You will also quickly see that to AT&T cloud computing is a business concept, not a technical one.

In the words of their Cloud Services white paper, "In AT&T's view, then, "cloud" implies a new way of contracting for IT resources that may be less expensive and less financially risky for the enterprise than traditional capex- and contract-intensive models of doing business. Some early enterprises that have used cloud services report significant savings on their IT capex and opex."  Technically, to AT&T, cloud computing is just another form of hosting or outsourcing, and not the fundamentally different computing model it certainly is to Amazon and the growing Business 2.0 multitude.

Now, with the bits barely cool on arch-rival Verizon's cloud announcement from just a few days ago and its own cringe-worthy cloud legacy as prologue, this was the AT&T CEO's chance to show us that, better late than never, the telecom behemoth finally got the cloud and they were gonna give Verizon a run for its money and show Amazon a thing or two about how it is done.  They own cell towers and fiber, and they own 90M cellular and 120M fixed line customers.  If they have the right vision, they could own the cloud.  But, they don't and they won't.

It was like someone told Stephenson that "cloud" is what the kids are calling "outsourcing" these days.  He began by talking about how Royal Dutch Shell, IBM and other giant companies were turning to AT&T to manage their existing infrastructure and applications for them, continuing,

"So we're investing very heavily in the cloud, to take their services, their applications and whatnot, put it in the cloud, and then they're using our network infrastructure to delivery that capability to their workforce and to their customers. So moving into the cloud becomes very, very important to us. So you see how all this begins to fit together, right? They're all accessing this information from the cloud via these devices [raises (Android) phone]. We're having a lot of success selling mobility into here and using the cloud as the basis for delivering all of this."

Does that sound like cloud computing leadership to you, supplementing the tactical IT resources of a handful of huge corporations?  He got the cell phone part right, but missed entirely the other two legs of the public cloud stool: providing strategic, core IT, not a tactical supplement, and enabling the long tail of Business 2.0, which means serving businesses of all sizes and especially SMB.  For a contrasting view of true cloud leadership, read Verizon's pitch-perfect announcement of its Computing as a Service offering.

And, speaking of smart phones, what's up with the leader of Apple's only carrier using an Android phone day to day now and showing it off to the press photographer?  Is he sending some kind of message?  Maybe.  When asked about the iPhone, he didn't exactly gush.

"The iPhone made what's possible with mobile broadband networks a reality very quickly. I think you have to give the iPhone a lot of the credit for accelerating the deployment of these devices. This device here [Stephenson lifts the Google Android-powered Samsung Captivate smart phone he currently uses], do you think Samsung would have a device that looks like this today if the iPhone were not out three years ago? Probably not. Would they have ultimately gotten there? I believe so."

He sounds like a guy giving his soon-to-be-ex-girlfriend fulsome credit for teaching him about Thai food, not for rocking his world.

More Stories By Tim Negris

Tim Negris is SVP, Marketing & Sales at Yottamine Analytics, a pioneering Big Data machine learning software company. He occasionally authors software industry news analysis and insights on, is a 25-year technology industry veteran with expertise in software development, database, networking, social media, cloud computing, mobile apps, analytics, and other enabling technologies.

He is recognized for ability to rapidly translate complex technical information and concepts into compelling, actionable knowledge. He is also widely credited with coining the term and co-developing the concept of the “Thin Client” computing model while working for Larry Ellison in the early days of Oracle.

Tim has also held a variety of executive and consulting roles in a numerous start-ups, and several established companies, including Sybase, Oracle, HP, Dell, and IBM. He is a frequent contributor to a number of publications and sites, focusing on technologies and their applications, and has written a number of advanced software applications for social media, video streaming, and music education.

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