ATandT Now Offering Cloud Computing Services

AT&T Synaptic Hosting is the telephone carrier's new brand of cloud computing infrastructure services and utility computing, which first will host the U.S. Olympic Committee Web site. The AT&T cloud initiative comes at the same time IBM, Amazon and others are building their own cloud infrastructures.

AT&T is launching its own cloud computing services that will put the phone carrier in direct competition with the likes of IBM, Google and Amazon.

The AT&T Synaptic Hosting is part of a $1 billion initiative that will see the carrier build five large-scale Internet data centers in the United States, Europe and Asia that will form the backbone of a new cloud computing service. The first test of this new cloud network will start when AT&T hosts the U.S. Olympic Committee's Web site during the upcoming Summer Games in Beijing.

While AT&T is calling its new services "utility computing," it seems clear that the carrier is ready to offer its own brand of cloud computing services for enterprises and Web 2.0 businesses.

The Aug. 5 announcement from AT&T is another sign that large companies, including non-IT vendors, are willing to invest significant amounts of money into what is still an up-and-coming technology. In just the past week, IBM announced that it will pour $360 million into a new cloud computing center in North Carolina, while Intel, Hewlett-Packard and Yahoo announced a pact that will offer research and development of cloud technology.

In addition to AT&T and IBM selling a cloud computing infrastructure to customers, Web 2.0 companies such as Google, Amazon and Yahoo are building their own cloud centers to host the growing reliance on the Web and Web applications by enterprises and general consumers.

Dell, yet another would-be player in the emerging cloud computing space, has gone so far as to attempt to trademark the term "cloud computing" with the U.S. Patent and Trademark Office. The application is pending.

While many observers believe that a true cloud computing model is anywhere from three to 10 years away from being a reality, IBM, Google and others have rushed to try and position their particular technologies ahead of competitors. At the heart of this technology is the promise of making large-scale computing more efficient by allowing an enterprise to offload some or all of its IT infrastructure to a hosting provider and then allow that business to draw on applications and computing on demand through the Internet.

For a company such as AT&T, a cloud infrastructure could be sold to the U.S. Olympic Committee to provide additional resources when thousands of users are trying to access its Web site during the 2008 Olympics, or to a smaller retail company that needs additional capacity during the holiday shopping season.

In a statement, AT&T claims it provides applications and computing on demand through virtualized servers, along with storage and management services, inside its own data centers. AT&T plans to use the application management technology it acquired when it bought USinternetworking in 2006. AT&T is also looking to provide an SAAS (software as a service) model that will deliver applications from Oracle, SAP and others to customers.

The cost for these services can range from $10 a month for small and midsize businesses and up to $1 million a month for large enterprises.

"We have had utility-style computing data centers and hosted offerings for years now... I don't see what AT&T is offering here that qualifies as anything but a utility-style, on-demand data center offering, and that is sort of what cloud computing is" said Charles King, an analyst with Pund-IT Rsearch. "I think the AT&T offering is interesting and it could be a way to bring more traditional companies into this because the companies that have been going after the cloud to begin with have been more Web 2.0, cutting-edge companies. Maybe an old-time vendor like AT&T is the way to bring a broader, commercial audience into what people are calling the cloud."

Writing on the Gigaom blog, Stacey Higginbotham said AT&T does have advantage in the emerging cloud computing space since the company will not only control the servers and the data center, but also the network that sends the data from the hosting facility to the desktop.

"The key advantage to AT&T's service is that it controls not just the servers and the cloud, but it also owns the network that those bits of data must traverse to get from the cloud to your computer," Higginbotham wrote. "That's a powerful proposition because it gives AT&T one more potential point of failure that it can guarantee and control. It also could lead the way for some interesting pricing options given that AT&T will know exactly how much it costs for each byte of storage and each compute cycle, but it also has the wholesale costs of bandwidth."

Of the five data centers that AT&T is building, three will be in the United States, including facilities in San Diego, Piscataway, N.J., and Annapolis, Md. The other two will be built in Amsterdam, Netherlands, and Singapore.