UPDATE: AT&T Announces Network Services for ASPs

WASHINGTON (01/27/2000) - AT&T Corp. and several industry partners today announced a family of network services that the company said would accelerate the growth of the ASP (application service provider) business segment.

Kathleen Earley, president of AT&T's data and Internet services group, said in her keynote address here at ComNet today that AT&T is calling the program Ecosystem for ASPs, and that the concept involves hosted applications that will reside on AT&T's network. AT&T also introduced a content distribution service and enterprise information storage service as elements of the new platform.

Cisco Systems Inc., EMC Corp., Hewlett-Packard Co., IBM Corp. and Sun Microsystems Inc. are partners in the ASP program, which Earley said will involve a US$250 million infrastructure investment on AT&T's part.

AT&T's announcement is aimed at serving companies that find their businesses are increasingly dependent upon networks. The goal is to provide ASPs with IP (Internet Protocol), data infrastructure and utility services and help them bundle their applications and distribute them, Earley said at a news conference today following her ComNet keynote address.

"For us, it is a very, very, very important market segment," Earley said of the emerging ASP business, which is projected to grow to $23 billion by 2003. But she stressed that AT&T has no plans to become a traditional ASP.

The continued build-out of AT&T's Internet data centers figures prominently in the new ASP program, Earley said. By the end of this year, AT&T will have eight of the 26 Internet data centers that it pledged to build last September up and running, she said. [See "AT&T Expands 'Net Data Center Operations," Sept. 14, 1999.]Four are already in operation now, including one of two in New York that the company recently expanded into what AT&T calls a "super center." One of the centers set to open this year is outside the U.S., Earley said. That overseas center will be in the U.K., an AT&T spokeswoman said.

The data centers will operate on AT&T's IP backbone, a fully digital and redundant network capable of OC-48 and OC-192. AT&T is also testing a caching and distribution technology designed to boost performance of Web sites and speed Web-page loading.

AT&T and Cisco are also working on new ways to measure reliability in the Internet space, Earley said.

"Today things like packet loss and latency are the traditional measures and we all agree those are probably insufficient," she said. "So, I would say watch this space in the future for some further announcements ... from Cisco and AT&T about how we are going to talk about quality."

John Marselle, Sun Microsystems computer systems vice president, said AT&T's entry into the remote hosting network-based market segment demonstrates the momentum that ASPs are gaining.

"We've been trying to drive the state of network-based applications for a while," Marselle said. "What this is going to do is further drive the reliability that we all want."

Within the Internet data centers, ASPs will have various hosting options, including shared and dedicated services managed by AT&T, the customer or through colocation services, Earley said. Two of the services are a content distribution service and an enterprise data storage service, both of which the company announced today as elements of the new ASP platform.

"Intelligent content distribution is all about improving performance, enhancing liability, reducing cost and managing the unpredictable nature of content demand," Earley said.

The storage service, supported by EMC, will be able to handle the massive amounts of ASP data that will reside in AT&T data centers. The service will centralize, protect and manage customer information using EMC's enterprise storage systems, Earley said.

In her keynote address Earley said that building better Web sites and better back-office support are key to working in the new Internet-driven environment.

Companies must build better "ecosystems that allow partners, suppliers and customers to flourish along with you," she said.

AT&T Corp., based in Basking Ridge, New Jersey, is at http://www.att.com/.

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