In September AT&T Corp won a $95m, five-year deal from the US Air Force to provide engineering and systems support services for its air and space intelligence processing center.
The award is one of the network giant’s many recent wins in the IT services sector, an area where it is finding new opportunities to provide a range of hosting, storage, and application management services to client from SMBs to second-tier Fortune 2,000 customers, all the way up to some of AT&T’s existing top mega-customers, according to Chris Costello, director of product management for AT&T’s managed hosting services.
AT&T’s strategy falls in with one of the major trends within the sector in the last 12 months – the aggressive expansion of telecommunications companies into IT services in order to offset declining revenue from traditional voice services. This has been most evident in the significant IT services acquisitions made by BT Group in the UK and Australian incumbent Telstra during this period.
The IT services AT&T offers begin at the level of basic data management, including collocation services and space and bandwidth functions. Slightly higher on the service chain is AT&T’s storage and security work, such as continuity services, remote replication, email archiving, server monitoring, break/fix services and security patching. The company also offers application management for ERP and CRM systems and such functions such as clients’ web transaction, Costello said.
The main verticals for AT&T’s service business are financial services, manufacturing, media and retail, with online gaming companies also contributing a large percentage of services growth, Costello explained. Financial services, where much of the work is transaction based, accounts for some of its largest services deal, she said. The company declined to comment on the revenue contribution of each sector or the size of the deals in these sectors. In fact, AT&T doesn’t offer revenue or earnings reports for its managed services division. Instead, these figures are grouped within the broader AT&T IP Enhanced division.
AT&T last month announced the opening of two additional internet data centers, one each in California and China, bringing the total number of site to 28 worldwide, half of which are in the US. From these centers the company offers hosting services, providing storage capacity and security services to AT&T customers, as well as data and content support like disaster-recovery and load-balancing.
The company also announced new managed hosting services that it sees as future demand areas: a service that lets clients manage their own servers and operating systems while AT&T offers hardware support, security updates and systems-based application support. Costello stressed AT&T’s commitment to these joint services, allowing organizations to maintain control over their systems in an outsourced environment that takes some of the IT responsibility off the client.
Other new AT&T services are server virtualization, which give clients the ability tot run many applications on separate operating systems all on one server, and utility computing, which lets businesses scale their computing needs up or down with demand, in order to reduce under-utilization and server costs.