The world according to AT&T

Ma Bell is not amused: Services over IP is the way of the future for telecom giant

During the past decade, AT&T has been jettisoning divisions faster than a heavyweight fighter sheds pounds trying to get back in shape for a shot at the title: NCR in ’94; Bell Labs in ’96; AT&T Cable, AT&T Wireless in ’01; Excite@Home, Small Business Hosting accounts in ’02. Earlier this year, it announced plans to stop pursuing residential and long-distance voice customers altogether.

I met with Hossein Eslambolchi — CIO, CTO, and president of global networking technology services at AT&T — over a light dinner to discuss AT&T’s IT strategy for the next decade. In a word, that strategy comes down to services. Not voice services, or even VoIP, but SoIP (services over IP). Eslambolchi told me emphatically, just short of pointing his fork at me, that AT&T is no longer a voice company. It is a data company.

The stats, albeit from AT&T, appear to back up that claim. Its IP network handles 1,700TB of data per day, while its public switched network handles 450TB per day. SoIP includes IP security, application hosting, managed network services, and multimedia, including HD-TV over IP and radio over IP.

Here’s one example of what a company can do when it handles that much data on a daily basis.

Stochastic analysis, a form of statistical probability that looks at past behavior patterns to identify and predict future behavior, depends on sampling. The larger the samples, the closer to 100 percent accuracy in identifying a reoccurring pattern at a very early stage.

AT&T has a security service called Internet Protect. It uses stochastic processing and an algorithm called Smart Sampling to extract information — rather than just data — on 17TB of data daily, looking for patterns that indicate a virus or DoS attacks. Eslambolchi told me AT&T identified the SQL Slammer attack on the network three weeks before it hit in large scale.

Eslambochi went a step farther to say that Internet Protect is getting so accurate that companies will soon be able to eliminate on-site firewalls.

“With that much data, stochastic becomes near foolproof,” Eslambolchi said.

AT&T is also moving aggressively on other technology fronts. It spends $8.5 billion annually in fees to the ILECs (Incumbent Local Exchange Carriers) for last-mile connection to business customers. You might say Ma Bell is not amused.

To dramatically reduce those connection costs, AT&T will use WiMax, mesh networks, and other broadband wireless technologies as a battering ram to bring down the walls of those greedy ILECs.

In 12 to 18 months, AT&T will run trials in two undisclosed cities to use WiMax for the last-mile connection to customers. AT&T has identified approximately 245,000 buildings within the United States that house business customers. AT&T is directly connected to 7,000 of those. WiMax in particular will be a way to connect to the next 100,000, Eslambolchi said.

With the largest IP network in the world, Eslambochi also said computing power will take place; not at the end points or at the edge, but within the network. It is all about policy-based computing, which allows policies or rules to travel with the data in the network so that decisions can be made simultaneous with generation of data.

This is the world according to Eslambolchi. Worth watching, don’t you think?