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8 September 2020

IBM deepens alliance with AT&T, targeting on-premise enterprise edge

There is a burgeoning trend for 5G operators to form close alliances with cloud majors, specifically to enhance their offerings for enterprise sectors, and to improve their business case to deliver those services.

Many operators have limited strategic presence in enterprises, providing packages of devices, minutes and megabytes but not much more. 5G gives them the opportunity to move up the value chain as many industries start to look for specialized, high quality connectivity to support their own transformations. But this requires deep investment in indoor coverage by the telcos (see Special Report), and the business case can be hard to make. That is where the scalability enabled by deploying the networks on public or managed cloud platforms can be a significant boost.

AT&T has formed cloud partnerships with many players, including Microsoft and AWS, and has now extended its relationship with IBM, with the enterprise market specifically in mind. AT&T plans to deploy a 5G/edge computing network at IBM’s lab in Yorktown Heights, New York, to develop and demonstrate new capabilities for private enterprise networks that are deployed on-premise, or near-premise on the edge cloud nodes of the operator or its cloud partner.

The US telco plans to deploy a 5G RAN in sub-6 GHz and millimeter wave spectrum in the famous lab, along with its private Multi-access Edge Computing (MEC) platform. This will be linked to IBM Cloud so that workloads can be run on either that platform and/or on MEC, and coordinate fully across both environments. Steve Canepa, general manager of the global communications sector at IBM, said his firm was also contributing expertise and technology in AI, and an edge application manager that operates in a hybrid cloud environment. It also brings Red Hat’s OpenShift platform for Kubernetes container management to the party (IBM acquired Red Hat last year).

The focus will be on business applications that require demanding levels of security and low latency, according to AT&T Business’s chief product and platform officer, Mo Katibeh.

He said, in an interview with SDxCentral, that the partnership will “serve as a model of innovation to help enterprise customers across many industries learn, experiment, and scale solutions built on 5G, edge computing and AI to increase productivity and drive efficiencies in their business.”

The initial target sectors are manufacturing, healthcare, public sector and finance, but Katibeh added: “The implications are there for almost every single industry. As we think about this offering in the market, we’re targeting where 5G technologies and AI can have a significant impact.”

The combination of edge computing with fixed or mobile 5G is central to AT&T’s growth strategy, and it aims to support both on-premise and network-based or telco edge models. These will support different use cases, but large enterprises will often adopt a combination of the two, with some traffic staying firmly within the premise, and other data going to the public edge or the centralized cloud. The new IBM alliance is heavily focused on the on-premise aspect and, as Katibeh put it, “exploring the ability to use the on-prem variant of edge to drive very specific business outcomes around operational efficiencies, employee safety, as well as creating entirely new use cases to drive revenue.”

Canepa said that telcos are starting to evolve into a strong position to take advantage of the growing interest in hybrid cloud and cloud-neutral services, as they virtualize their networks. “Up until this point, the networks inside the telcos were very structured environments – hardwired, specialized equipment that was really good at what it did, but did a fairly limited set of things. What we’re evolving to now is truly a hybrid-cloud environment where that network itself becomes a platform. And then the ability to extend that platform to the edge creates a whole new opportunity to create new insights as a service, new applications, and solutions that can be deployed in that environment.”

The lab project will spawn commercial services which will be offered by the AT&T/IBM partnership, and will require customers to sign up for services from both firms. This kind of tie-up is important to both sides. The telco gains access to the investment in infrastructure and software frameworks of the big cloud providers, rather than having to develop it all from scratch – a strategy followed by a few operators, but with most of those pulling back from it. The cloud provider gains access to the telco’s 5G connectivity, and to its customer base, and importantly, it can insert itself into the value chain to deliver major telco 5G/edge contracts. Without these strategic partnerships, the telco could offer purely cloud-neutral deals and commoditize the hyperscalers.

As it is, AT&T is assembling a range of cloud partners and will not be exclusive to a single company. It has also announced that it is working with Microsoft on metro and edge 5G offerings and more partnerships are likely to follow, said Katibeh. “Watch this space. We would expect that the continued ecosystem play between the clouds and the communication companies will evolve over time,” he said. “In the 5G world, you would need to integrate each network with each cloud independently in order to drive the broad ecosystem that we’ve been talking about.”