During the past year, AT&T has been evolving its Web hosting business from simple collocation and management services to an integrated set of offerings designed to meet specific needs. With 18 data centers linked by its Integrated Global Enterprise Management System, AT&T says it is poised to compete with companies such as Digex Inc. and IBM Global Services. Its customers include American Financial Group, Budget Rent-a-Car and Hyatt Hotels. Network World Senior Writer Jennifer Mears recently spoke with Pat Traynor, vice president of managed and hosting services for AT&T, to find out what the carrier expects from hosting down the road.
Q: Things are stagnant now in the Web hosting market. When - and how - do you see things picking up?As I look at the marketplace, I would say it's as dynamic as I've ever seen it, especially over the last couple of months. It's been pretty clear that the direction is shifting to value-added services. About a year or so ago we realized, and I think the industry did, too, that to remain a viable player we had to offer value-added management services. Stand-alone hosting providers weren't going to make it. The target client shifted from dot-com to the large enterprises, and meeting enterprise client needs requires a much more sophisticated and complex set of management capabilities and services. We see tremendous growth, particularly for the managed services and advanced services elements.
Q: How are business needs changing when it comes to hosting?The reason that business needs are changing is because of the mission criticality of the business applications and the nature of enterprise businesses. Most of the applications and the environment requirements that enterprise clients have are driven by the investment they've made in their mission-critical business applications. That's a big shift from the dot-com era where an entire business was born on the Web. Now the Internet, intranet and extranet technologies and capabilities become an integral part of a business application.
Q: Talk about the investments AT&T has made in hosting.We built 18 state-of-the-art Internet data centers and integrated those into AT&T's worldwide IP and intelligent network. So they aren't 18 stand-alone Internet data centers - they are very much integrated into and are managed by the same process, discipline and rigor with which we manage our scalable and reliable IP and other networking capabilities. The AT&T infrastructure now includes our voice services, our data services, our IP and our Internet data centers.
The second big investment area is [Integrated Global Enterprise Management System]. Over the last six or seven years, we've invested more than $200 million in iGEMS, which is our network and application management platform that provides predictive, application monitoring and management. With iGEMS, we're able to provide proactive application performance management. We're able to provide predictive fault management. We're able to provide capacity management. Ultimately, we are able to deliver customer-defined transaction-level performance guarantees. IGEMS manages across the network domain, the server domain and the application domain.
Q: What are you offering large companies?The full suite of managed hosting services includes application-performance management, database management, hardware and operating system management, intelligent-content distribution, high availability data and computing services, storage, managed security and firewall services, load balancing across multiple Internet data centers and locations, and, of course, fundamental VPN and data networking integration.
We offer [service-level agreements] that cover the business-transaction availability and response time, as well as server and application availability, network availability and, of course, resolution management. Our managed services portal for hosting gives customers comprehensive real-time performance reports with integrated SLA data and collaboration tools.
Q: How important is hosting for AT&T?AT&T's direction and investment in our Web hosting and managed services is a reflection of AT&T's business evolution. AT&T's focus includes the growth areas of IP, hosting and VPN. AT&T views Web hosting, as well as VPN and IP, as the strategic growth areas for our business, as well as how to meet enterprise-client needs.
Q: AT&T recently sold its shared hosting business to Interland. Are you now out of the shared hosting business?Yes, we are. We divested ourselves of that business in January of this year, and we are primarily focused on large enterprise accounts as part of a strategic business decision as we look to serve the enterprise market with these additional value-add services.
Q: What can businesses expect from you when it comes to Web hosting going forward?Clients should expect to see a richer and deeper portfolio of services as their needs change. Additional global expansion - so many of our multinational customers are asking for an extended global footprint for hosting, and we're delivering on that. Content delivery will be inherent in our value-added services as we extend worldwide. Businesses can also expect a richer set of business continuity options for our hosting customers. So they'll see a global extension and footprint, they'll see a deeper set of hardware and software certification and they'll see a richer set of business continuity capabilities.