AT&T & IBM join forces (again)

Mike Sapien, Principal Analyst, Enterprise Telecoms, Ovum

In October 2012 AT&T and IBM announced a new strategic relationship that uses the telco’s secure private network to access the tech company’s back-end infrastructure. The goal is to give Fortune 1000 customers access to IBM’s SmartCloud Enterprise+ (SCE+) services with AT&T’s VPN network services. IBM and AT&T plan to launch the new service in early 2013. Either company could take the lead, but it seems likely that IBM will drive these opportunities among its Fortune 1000 customers.

This new relationship should take advantage of the earlier AT&T–IBM partnership, known as “Blue Sky”, and leverage the experience of that relationship. In fact, this latest move should ideally be positioned as an extension of the previous partnership.

With the addition of IBM’s SCE+ services, both players could position the new relationship as a unique offer and/or a program extension, but we believe prospects will require more detail and explanation. There is also the question of why the Fortune 1000 target customers would not just buy this new integrated offer from IBM directly.

The new partnership comes with a sense of déjà vu

In April 2009 AT&T and IBM announced a strategic relationship, Blue Sky, which had the goal of aligning IBM’s IT solutions (including outsourcing) with AT&T’s global network leadership. Blue Sky was also intended to focus on global enterprise customers, and it highlighted the governance process, with a strong focus on integrated management. Either IBM or AT&T could take the lead on these opportunities, which sounds very similar to the new announcement.

Integrated management and process integration was one of the major thrusts of the Blue Sky program. The plan was to integrate AT&T’s global network and IBM’s IT services tools so that customers would have one interface and one set of tools to monitor and manage their services. The 2012 SCE+ relationship could be interpreted as an extension of this integrated management model.

Governance should be through one program office

AT&T recently announced that a new program office was to be created for the new strategic relationship. The previous AT&T–IBM partnership had an extensive opportunity and funnel management governance process; AT&T developed a comprehensive process with two different executive levels of opportunity assessment and management in 2009. However, it would be more efficient and less confusing to have one program office rather than making the channels work with two separate places. Without an integrated program office, there could be significant transition overhead as customers move from one service combination or require a hybrid approach (private and public clouds, legacy transformation to cloud).

More work is required to position the uniqueness of this offer

IBM’s SCE+ services are new and interesting, but there has to be some explanation why AT&T would opt to use IBM’s offering rather than its own. Integrated management and the process of integrating AT&T’s global network into IBM’s IT services are not new – they were central to Blue Sky in 2009. However, there may be cloud elements that make this new program unique.

AT&T has been working on new capabilities based on software-defined networks that may also provide differentiation. Although recent briefings have shed more light on the new relationship, more service detail and go-to-market plans are necessary to establish the uniqueness of this offer and explain why customers would approach AT&T instead of IBM.

 

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