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AT&T Becomes the Integrator in Carrier’s Clothing| May 19, 2006 | Business Telecom Services - Europe Analyst: Dustin Kehoe
On May 17th AT&T announced that it was offering standard Network and Integration Services for its business customers across Europe and other regions (e.g., APAC). The services range from consulting (e.g., security planning, network design), IP convergence, application management, system integration, consolidation, and outsourcing, to servicing of third-party contracts. AT&T has also set in motion formalised processes to centralise and manage its partners and customer support channels on a global basis. Analytical Summary • Current Perspective: Positive on AT&T expanding its network integration and consulting services into the European market as part of a global standard offering. The move positions AT&T as a single source for offering a comprehensive solution set ranging from consulting (e.g., security planning, network design and construction), services (e.g., IP convergence and application management), and outsourcing, to after-sales servicing of third-party vendor and other maintenance contracts. The new offer is supported through centralised processes for managing its ‘ecosystem’ of partners to support customers on a global or regional basis. • Vendor Importance: High to AT&T, as the company needed to devise a new strategy for selling into its existing customer base to gain a greater share of their annual ICT spending. Amassing a large number of partners (e.g., hardware vendors, services providers and carriers) supported by formalised process, new internal resources (e.g., staff hires) and certified-external partners was important for giving AT&T the operational clout to support both regional and global requirements. Also, offering to take on peripheral services, such as supplier maintenance contracts, is an important in-road for account acquisitions. • Market Impact: Moderate on the European MNC market as AT&T has invested significant time and resources (e.g., internal hires, certified partners) to build out its value proposition to its customer base. The company can now draw on 1,200 established vendor relationships worldwide through a formalised and meticulous management process. While it will take time to get all of the parts working in sync, AT&T is clearly expanding out of its comfort zone. It is willing to take on new areas (e.g., consulting, carrier consolidation, maintenance contracts) on a regional or global basis. Competitors that are either primary or secondary suppliers to AT&T should be wary. Recommended Competitor Actions • Orange Business Services should articulate its NExT Strategy by showcasing its product roadmap for offering integrated products from the data and ICT (SIP-based VoIP, IP telephony and unified messaging). It should also differentiate from AT&T by stressing that it understands convergence also involves the integration of the fixed and mobile services and will therefore create an integrated business unit to support these evolving needs. • In sales situations, Orange Business Services should also come up with its own facts: 400 consultants, 500 project managers, 750 service managers and 2,000 IT staff by combining with other pillars of the FT organisation. It could also emphasise its range of customers for IT outsourcing, network integration (including support for one of the largest VoIP deployments in Europe) and professional services. • In Europe, BT Global Services should highlight that it has a stronger European IP backbone, supported by extensive in-country networks spread across several European markets. It might also stress having greater local market experience and in-country support. While it also has similar arrangements with existing AT&T partners, it should differentiate through other relationships it is developing with local country suppliers. • Verizon Business should continue to stress that it has strong global coverage (e.g., private IP coverage in 98 countries) and local support. However, it must continue to roll out its burgeoning product portfolio to Europe as well as other key regions (e.g., APAC). In customer-facing situations, the company would also be wise to stress that AT&T’s ‘ecosystem’ of partners are not exclusive to AT&T.
• Enterprise customers that are using AT&T as either a primary or secondary provider should consider AT&T’s new business proposition for network integration, consulting, IP convergence, application management, outsourcing, and after-sales maintenance and support. The company has clearly stated a willingness to become involved at all stages of the contract lifecycle. It can also offer a range of reference customers and has strong TCO / ROI arguments it can bring to the fore. • MNC customers that are looking for a roadmap for fixed and mobile convergence would be wise to also approach some of AT&T’s global competitors. Equant (soon to be re-branded), for example, will begin integrating its mobile and fixed divisions to offer integrated services to its enterprise customers. Similarly, BT Global Services is also offering Fixed-Mobile-Convergence (FMC) to enterprise customers which it has initially launched in the UK. Business Telecom Services - Europe
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