AT&T (T) Ties Up With IBM & Amazon, Boosts Cloud Suite

In order to cope up with the dynamic world where hybrid cloud and IT services are utilized to meet business requirements, U.S. telecom behemoth AT&T Inc. (NYSE:T) recently announced its upcoming partnership plans with International Business Machines Corporation (NYSE:IBM) and Amazon Web Services Inc., a subsidiary of Amazon.com, Inc. (NASDAQ:AMZN) .

AT&T declared that it is entering into an alliance with IBM to offer more cloud networking services to businesses and will ensure efficient operation of the networking services of the same. The company also announced a multi-year, strategic tie-up with Amazon Web Services to effectively use the outcome of integrated solutions based on Amazon’s cloud and networking capabilities. The partnership is expected to help both existing and new customers shift more efficiently to and use the AWS Cloud along with the AT&T network. Through these alliances, all the companies are expected to top the cloud services market with their simple, scalable and more secured technological innovations.

In Sep 2016, AT&T and French telecom Orange S.A. (NYSE:ORAN) announced that they are teaming up on open source initiatives in order to accelerate the standardization of software-defined networking (SDN) and network function virtualization (NFV). In relation to this, AT&T declared that it has found Orange as its first telecom partner to test its open-source Enhanced Control, Orchestration, Management, and Policy (ECOMP) platform.

The IBM Deal

The partnership between IBM and AT&T is a strategic move on part of both the companies and seems to be mutually beneficial as well. Per the deal, IBM's sales and marketing teams will sell AT&T's new product – AT&T FlexWare – across the world to enterprises and AT&T will run applications on IBM's cloud, cognitive, analytics and security services. Additionally, IBM has already started rolling out AT&T’s FlexWare in many of its own sites. The alliance also marks the combination of latest networking capabilities and cost reduction.

AT&T’s FlexWare: Concept and Prospects

AT&T FlexWare, formerly called AT&T Network Functions on Demand, is available globally through the AT&T Network on Demand platform. The new product is equipped with both software-defined networking (SDN) and network function virtualization technologies. The company is aiming to extensively use these technologies to enrich its network-on-demand offerings. With AT&T FlexWare, business customers can set up multiple virtual network functions (VNFs), which may be utilized both as a router and a firewall, on a single FlexWare device, and deploy them in different countries. The network functions could be managed via an online portal. More than 1,700 businesses from several industries have signed up for AT&T Network on Demand solutions.

Amazon Deal

The partnership between AT&T and Amazon Web Services claims to provide an end-to-end knowledge of the ecosystem which includes data from applications available in the AWS cloud. To this end, AT&T will be deploying the application data by incorporating it from the AWS cloud into its AT&T Threat Intellect to strengthen the security of cloud community. The partnership aims to focus in three main business areas – Business Cloud Networking, Internet of Things (IoT) and Threat Management.

This alliance also marks the provision of an application layer security either as a managed or unmanaged service. The new end-to-end security option seems to be a game changer for AT&T's NetBond cloud connectivity services in the competitive industry. Amazon Web Services was already a part of AT&T's NetBond, which is AT&T’s direct cloud connection service through which its customers can utilize their Virtual Private Networks (VPN) to connect to any cloud compute in AT&T’s partner ecosystem.

Amazon currently carries a Zacks Rank #1 (Strong Buy) whereas AT&T and IBM carry a Zacks Rank #4 (Sell).You can see the complete list of today’s Zacks #1 Rank stocks here.

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