Q&A: Seeking Virtualization AT&T Shifts Gears from Hardware to Software
AT&T quietly announced Domain 2.0 late last month. While it didn't garner a lot of attention, the move represents perhaps the most significant shift in strategy for the carrier since it announced its plans for an LTE rollout. Wireless Week recently spoke with Tim Harden, president of supply chain and fleet operations for AT&T, about what the virtualization of the network means for not only the network itself but end users as well.
Wireless Week: Can you give an overview of Domain 2.0 and what it really means for the trajectory of AT&T's network strategy?
Tim Harden: This is the next generation of what we've been doing with the whole supply base. If you think about what we did in 1.0 it was really about accelerating the timelines between when we could get a product through ideation into the marketplace and actually start generating revenue from that and do that with a subset of suppliers who had an opporunity in the domains that they were in to really have large hunting grounds. We wanted them to be able to come to us with their ideas about how to move the needle on value and performance, without having to go through a RFP process to do it.
We learned a lot with 1.0 that allowed us to cut that timeline in half, and as we looked at what was happening in the marketplace and in the network and the backbone-where the data traffic was going and where we expected it to go in the next 5 years-it became very evident to us that in order for us to simplify the network and scale it much more rapidly, we were going to have to chagne the approach. That's really what 2.0 is-a change in approach that will allow us to simplify and move into the marketplace much more quickly.
With that, we're carrying through the idea of trying to get to the market place quicker. The objective here is to cut that timeline in half yet again and hopefully get within 6 months for the majority of products we bring to market, and 100 percent within 12 months. And given that its software oriented certainly it offers us the ability to update and transform the network much more quickly than we are able to do today where we have to touch every single hardware element and go through that process. Certainly this is a major inflection point for us where we're starting to push the envelope of the network.
WW: I'm guessing this kind of shift will necessitate new suppliers?
Harden: Yes. It would actually expand from eight to nine domains. The nine domains are not the same as what the 1.0 domains are. There's only a couple that will actually carry through. The majority of the domains in 2.0 are brand new areas and they're all for the most part software oriented in the areas that they're focused on.
WW: And when will you be announcing these new vendors?
Harden: We'll start announcing the vendors we'll be working with in the fourth quarter and that will carry through to the first part of '14. I think that gives you a good indication of the types of players we'll be dealing with. I can tell you now that we expect there will be a lot of new entrants and software oriented entities. So, it'll have a pretty good mix of participants this time around.
Berg: Will end users notice a difference as you switch to this new 2.0 strategy?
Harden: I think it will have an impact across the board. We recently announced that we're opening up a bunch of network APIs, and clearly we've brought that concept of an open network and you'll continue to see more APIs exposed. So, I think you'll see more developers and enterprise customers tie directly in and create their own capabilities. That's one aspect. From a consumer perspectve, we also think you'll see new products and services that will benefit them as well. This is certainly a companion strategy to our VIP initiative that creates the base for an all-IP, all wireless infrastructure that now gives the customer the choice of how they want to obtain their services, and it also gives them that equal plane, where they can take those services across the wireline or wireless. While this is going on, we're also virtualizing our IT shop and the cloud-based services associated with that, so we're on the same journey there as well.
WW: As the other carriers move further along, do you forsee them following suit with this kind of software-heavy approach?
Harden: I think eventually. I think we're seeing it in spots around the world. We're seeing carriers doing different parts of this. AT&T chose to do this as an integrated strategy across the whole and do this from an organzation perspective and not just a corporate perspective. We really want to drive this initiative as a way to modernize the network towards the way the marketplace is now demanding that we operate. So, I think you'll see others quickly follow. You already saw pieces of this, I think Cisco announced their definition of this and stated a couple carriers that they were working with. I can tell you that we've had discussions with all of our 1.0 vendors and all of them stated that these types of separation of software and hardware are on their roadmaps. The question will be can they get there fast enough for what we need to be able to do.
WW: So where do those tens of thousands of small cells fit into this picture?
Harden: It gives us addtional coverage and capacity and you'll start to see the network scale. You're going to need to create dense capablities in the network to be able create capacity going forward and small cells fit nicely into that going forward. We really see small cells as part of not just our strategy but all carriers' strategies going forward.
WW: To clairfy, this won't change AT&T 2014-15 CapEx forecast?
Harden: That's correct. Over time, we expect that this will have a bias towards less captial requirements. But that's an unknown at this point.