AT&T's $1 Billion Cloud Bet Shows Carriers Clamoring For Cloud


AT&T has pledged to invest $1 billion in cloud services and mobility, among other things, this year as more traditional telcos and carriers show they're serious about cloud computing.

AT&T recently said it is focusing its plans to deploy global network-based cloud, mobility and networking sourcing solutions to companies of various sizes across multiple industries. The Dallas-based mega-carrier said the nearly $1 billion investment this year will focus on deploying next generation services like mobile applications, as-a-service cloud-based solutions and network sourcing.

"We continue to invest significantly in cloud-based, mobility and network sourcing solutions because customers are increasingly recognizing that transformative services like these increase productivity, improve operational effectiveness and lower costs," said John Stankey, president and CEO of AT&T Business Solutions, in a statement.

AT&T said the proliferation of high-speed wired and wireless networks, along with the massive influx of mobile devices and applications has made a cloud and mobile strategy an important component of the carrier's roadmap.

Along with pushing money into enterprise mobility apps and cloud and as-a-service upgrades, AT&T said it will also roll out platforms, systems and capabilities that enable automation, and enhance and simplify how business customers receive support.

The investment will be targeted at companies, government agencies and institutions in various industries like manufacturing, retail, hospitality, healthcare and automotive.

AT&T has already started investing in cloud-based and emerging services. So far this year the carrier has embedded cloud capabilities directly into its network so the company can manage and deliver services and applications to any device. The cloud services also give customers flexibility and shared economics in their compute and storage needs, the company said.

Another key area of investment, mobility solutions and connected devices, is also already receiving the fruits of AT&T's $1 billion bet. The company said that in the first quarter of 2011 it added 1.6 million emerging devices like tablets, netbooks and laptops pushing its total number of emerging devices connected to its network to 12 million. Additionally, AT&T has seen the use of mobile applications triple since 2009.

Other major investment areas include global enterprise networking, small business services and services for the healthcare industry.

AT&T's $1 billion blockbuster comes as carriers, cable companies and traditional telecoms look to corner the cloud computing market through strategic investments and acquisitions.

Last year, Verizon said a large portion of its roughly $17 billion growth investment would be flagged for cloud computing endeavors as the company spends to build, operate and integrate its networking and computing platforms. And earlier this year, Verizon bought cloud computing provider Terremark for a whopping $1.4 billion.

In the weeks that followed Verizon's Terremark acquisition, Time Warner Cable said it would purchase cloud hosting provider NaviSite for $220 million.

Then, in April, CenturyLink Inc. revealed plans to acquire cloud provider and hosting operator Savvis Inc. for a $2.5 billion cash and stock purse. As part of the deal, CenturyLink also agreed assume or refinance Savvis' $700 million in debt, pushing the total deal to $3.2 billion.

AT&T is also no stranger to big time investment. While it is putting $1 billion toward cloud and mobility efforts, AT&T also revealed plans to acquire wireless rival T-Mobile for a whopping $39 billion.

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