Call the professionals

AT&T Solutions builds a business around the dynamic - though not always pretty - world of managed network services

When walking through the main doors of AT&T Solutions' headquarters in Florham Park, N.J., the first thing to catch the eye is a small plaque mounted on the door that says, "Through these doors walk the world's finest networking professionals."

That sign was Rick Roscitt's idea. "Everyone said, `Oh, that's corny,' when I said we were putting that on the door," says Roscitt, president of AT&T Business Services and president and CEO of AT&T Solutions. "But the employees love it, and I think it's true."

When Roscitt formed AT&T Solutions in a small conference room in early 1995, the "world's finest networking professionals" numbered only 12.

Five years later, the company has grown 40% year after year and is closing in on being a $4 billion business with more than 8000 networking professionals. These networking professionals provide everything from design, implementation and management, to consulting, integration and outsourcing for the complex data networks of multinational corporations such as IBM, Bank One, Allied Signal, General Motors, Delphi Automotive Systems, Acer Group, Citibank, MasterCard International and Merrill Lynch.

Chasing a trend

Major corporations depend on their LANs and WANs, hubs, servers and desktop computers as much as they depend on their employees, but of course, it was not always this way. The Internet as we know it did not exist a few years ago, nor did the value that corporations place upon it.

AT&T stumbled across the idea of network management services via Chase Manhattan. Chase, then one of AT&T's largest customers, didn't want to deal with the overhead and management involved in overseeing its own network.

"They made it clear that if we wouldn't do it for them, they would find somebody else," Roscitt says. "To study the potentials for this across many other clients, we looked at IBM Global Services, Andersen Consulting, EDS and all the other big systems integrators that were out there."

What AT&T found was a common trend, driven not just by classic networking but also by the Internet and the sense that networking would become the lifeblood of a major corporation. Hence, the birth of AT&T Solutions.

"Of all the things I think I would be most proud of, it was understanding that early trend. Thank God Chase led us there," Roscitt says. "If you hadmentioned the word `Internet' five years ago, it certainly wasn't the Internet o f today. Intranets, extranets and e-commerce - those are really a phenomena that we saw coming but weren't sure."

Predicting a trend was one thing, but convincing analysts of its viability and profitability was another. In 1995, there were outsourcing analysts, but no network outsourcing analysts.

"We had to create this space and then prove it had credibility," Roscitt says. "When people finally got it, they said `OK, you want to be a niche player.' I think they underestimated how powerful networking was going to become. In the beginning, a lot of people may have said, `Who cares?'"

Today, networking is considered a noun and a verb. The noun refers to the goods you buy - routers, software and hardware. The verb implies connectivity in the LAN and WAN and can indicate hard-to-manage, complicated networks with extensive technology and risky environments.

The network fabric is the glue that holds virtual business entities together, whether they are customers, employees or suppliers, Roscitt says. Understanding the importance of that glue is becoming more common, and AT&T Solutions believes it plays an important role in helping corporations determine how to use the network effectively - now and in the future.

AT&T Solutions established a strong position in the market in a short span of time, not just because it is AT&T, but because it built a solid outsourcing business in a space that was not necessarily a given, says Allie Young, chief analyst for Dataquest. "It's different from the technology part of the business. What they have managed to do is establish confidence among clients that they can take over and run their networks and reach the global ideals that companies have," she says, adding that the global aspect is key where mergers and acquisitions are concerned. "When integrating disparate systems into a network, a local provider is not adequate."

A GEM of a system

One of AT&T Solutions' secret weapons is its Global Enterprise Management System, or GEMS, a platform that allows for end-to-end network viewing, failure prediction and diagnostics.

GEMS, which cost the company more than $100 million to develop, ostensibly sets AT&T Solutions apart from other network management service providers because of the global power of the system. The network management platform can manage a client's network from the desktop to the LAN and the WAN, to servers and into the mainframe environment.

Another of AT&T Solutions' secret weapons is its people, says Brian Maloney, senior vice president of AT&T Business Services and vice president and chief operating officer of AT&T Solutions.

Since October 1999, when Roscitt became president of the business services division, Maloney has been running the day-to-day operations at AT&T Solutions. "We don't have any products," Maloney says. "The only thing we sell is the skills of our people."

Although each customer brings different challenges, each is also a variation on a theme, he says, and AT&T Solutions' approach to them is generally the same: "We move in with them."

The network management service provider's typical proposition is to take over the client's present network environment, stabilize it and, if possible, begin remote monitoring to smooth the transition to a new network. Meanwhile, AT&T Solutions designs, engineers and builds a new network for the client. When the new network is complete, migration from the old to the new takes place, and then the service provider takes over management of the new network.

"But it doesn't end there," Maloney says. "What typically happens is once these people have a great idea, and we start to build to the next generation, by the time we finish the build, the next great idea is coming. It's a continuing cycle."

When AT&T Solutions' people move in with a company, they don't set themselves apart. Textron, a developer of industrial products for the aircraft, automotive and financial industries, considers AT&T Solutions its own telecommunications department, saysMarie Rossi, director of enterprise services for Textron (see sidebar on page 44).

And Delphi Automotive Systems, which makes automotive components and systems technologies, named its AT&T Solutions crew "part of the Delphi family" at an official ceremony when Delphi's new network became operational, says Gary Robertson, chief technology officer for Delphi (see sidebar on page 46).

Taking the family metaphor a step further, MasterCard International challenges anyone to come to its St. Louis offices and try to differentiate the AT&T Solutions employees from its own in a lineup, says Arthur Ahrens, senior vice president for computing and network services for MasterCard's global technology and operations division (see sidebar on page 48).

Although AT&T Solutions was born from AT&T proper, the two companies are separate in every way. Based on an Andersen Consulting model for management - to which Roscitt "gleefully and cheerfully" attributes credit - AT&T Solutions doesn't look or act like a carrier.

"We work with our clients to join their team," Maloney says. "We're part of whatever the CEO of that firm needs to do. We're sitting right there at their table as part of their internal team doing our part to further [their] business objectives. What I'm not doing is trying to sell them my products."

Up to the challenge

Despite the sunny outlook, getting a new roommate is never easy. When AT&T Solutions moves in with its clients, it's not always pretty, Maloney says. "Our clients say this whole transformation business is ugly, and it's true," he says. "It's not as simple as saying, `I'm going to go and do this transformation and come back and tell you when it's done.'"

Building the network is only half the fun; other complexities that AT&T Solutions deals with when integrating a global network include real estate, reorganizing people, legal and regulatory issues and cultural barriers.

"This process is just difficult to people. That's one of the reasons they hire us and one of the things they say they'd like to be smoother," Maloney adds.

To make the transition as easy as possible, AT&T Solutions has established partnerships with companies around the globe, including AT&T Canada; AT&T Latin America; BT; equipment provider Cisco Systems, which supplies a major portion of AT&T's equipment; Concert; IBM Global Network, which AT&T Solutions purchased to reach a wider set of customers; and NTT.

"You can never be everything to everybody. You need help," Roscitt says.

Other challenges the company has undertaken based on previous experiences include setting service level agreements based on specific parameters so when something goes wrong with a network that is beyond AT&T Solutions' control, there's less stress on the relationship, says Dick Anderson, chief technology officer of AT&T Solutions.

"It's easy to misdefine parameters," he says. "But what comes with putting up parameters is a real move toward cooperation [with other service providers] to deliver multiple services across multiple networks. This is a big deal. It's a bit of an art."

Networks go down, and it always happens at the worst possible time, Anderson adds. "It stings a bit when it happens, but we have to make sure we're responsible. That's what we're trying to improve."

When customers complain about their managed network service providers, including AT&T Solutions, 90% of the time the problem is not with the service provider but with the customer, says Ken McGee, vice president and research fellow for Gartner. "In the past I think [AT&T Solutions] has taken an extremely unfair amount of negativity because of mishaps with their customer base," he says. "But I don't think there's anyone that does it better."

Inside the crystal ball

Another challenge for AT&T Solutions will be maintaining its leadership position during the next few years as many smaller network management service providers emerge.

The company does not see competition as a threat because many other network management service providers don't offer the spectrum of services that AT&T Solutions does, Maloney says. "There are the traditional IT outsourcers at one level that compete with us in the IT space but haven't gone very far into networking," he says. "At the other extreme, you've got WorldCom and other traditional carriers that are nipping at the Internet and niches within that. But there aren't many that can span the entire spectrum and manage [a network] end-to-end in a way that furthers [the client's] business objective."

In the future, clients' demands will focus even more on doing business in online and global environments. Network management service providers such as AT&T Solutions will see increased interest from clients in geographic areas that were not previously ready for online, real-time networking environments, such as Europe and the Asia-Pacific region. The shift already is happening, as AT&T Solutions recent contract with Acer Group of Taiwan shows.

Eventually, customers will have more specific demands such as managing applications, not just networks, Anderson says. Today AT&T Solutions manages where the application is located, but not the application itself. In the future, companies will want their applications to remain healthy to avoid manual repair work. "The challenge is not only to monitor what is happening but how to fix [problems] automatically," Anderson says.

That bodes well for AT&T Solutions and the "world's finest networking professionals." Five years from now, the company will be a lot bigger - and not just in terms of employees, Roscitt says. AT&T Solutions will be a bigger slice of the overall AT&T pie, he says. "If you look at a role model today, it's probably IBM Global Services. They're heading toward 40% of the total revenue of the corporation," he says. AT&T Solutions has been on an upward climb. Its revenue grew 61% in 1997, 33% in 1998 and 48% in 1999. Also in 1999, AT&T Solutions accounted for about 2.6% of AT&T's revenues, and the organization has more than 1200 customers.

"More and more customers will decide it's just not a good idea to go do this all on your own," Roscitt adds.

And where will Roscitt be in five years? Predicts Roscitt: "I, myself, will be on a beach in Hawaii."

Textron, a developer of aircraft, automotive and financial industrial products, signed a 10-year contract in 1996 with AT&T Solutions for voice and data services, as well as network management of the company's LAN and WAN.

Textron had grown and was looking for a network management service provider that could help its network transition to support a new business model that included e-business services.

"Given the scope of services we needed, AT&T Solutions had the skill set and was worldwide; those were the basic reasons we looked at them as a strategic partner," says Marie Rossi, director of enterprise services for Textron. "When we looked at network service providers, we had to go with a partner that could roll out services quickly and could assist us in expanding our WAN beyond the U.S."

With manufacturing plants and offices in Europe and Asia, Textron needed AT&T Solutions to help it move from a bricks-and-mortar business to a clicks-and-mortar business, Rossi says.

"Infrastructure is key to Textron," she says. "As our business changes, so does our relationship with AT&T Solutions and the work that needs to be done to meet the demands of our new business."

The challenges Textron faces with AT&T Solutions include dealing with an infrastructure that no one can touch or feel but that the global business depends on. As a company that does business on a global basis, working out cultural barriers, regulatory issues and legal issues initially were touchy subjects between Textron and AT&T Solutions, but now those issues are streamlined and the right processes are in place, Rossi says.

Technology challenges weren't the only hurdle for Textron. Outsourcing brings business processes and cultural issues within the company. "It's critical that they know our business and aren't just engineers. They have to know what types of services we can implement and change that will allow our business to grow," Rossi says. "Now we look at them as our own telecommunications department."

With 179 manufacturing plants in 39 countries and a slew of remote employees, Delphi Automotive Systems has a complicated network with 40,000 desktops. Though part of General Motors for 75 years, Delphi, an automotive component and systems technology developer, spun off from GM in May 1999. Currently, Delphi's customers include GM, Honda, Isuzu and Toyota.

After the spinoff in November, Delphi signed a $160 million deal with AT&T Solutions to re-architect its entire network, building a single network to replace the company's multiple networks, says Gary Robertson, chief technology officer for Delphi. GM signed a separate $350 million deal.

Leaving the old network - designed by EDS - in place during the transition, AT&T Solutions built a modern, faster network for Delphi's voice and data services.

"The number of router hops dropped dramatically," Robertson says. With all the plants and remote employees around the world, the task was "massive," he says. "AT&T [Solutions] has been very good at trying to coordinate the efforts of a lot of different things - the old EDS network, new providers like [BT] and Cisco. There are a lot of people to keep in the loop."

>From e-business to product design and development, a good voice and data >network enables Delphi's global operation. "We are dependent on [AT&T >Solutions] 24 hours a day, seven days a week. If they don't maintain it, >we don't do business," Robertson says. "The demand for bandwidth is always >there, and the culture of business is to go faster and better."

With AT&T Solutions' help, building a foundation for e-business is a key priority for Delphi, as is enabling voice over IP "when the time is right," Robertson says. Together the two companies have designed a network built for growth, both in customers as well as in functionality, he adds."

We can't do it without them. They became part of the Delphi family."

When you make a purchase and charge it, everything that happens between the point of sale credit card terminal at your favorite store and the host computer or mainframe at the bank falls under the responsibility of MasterCard International's network.

The round-trip response approving your purchase usually runs about 220 milliseconds. And not just in the U.S., either. MasterCard does business in about 60 countries.

To make the transaction happen in the correct time frame, MasterCard has a slew of network and telecom equipment in place. Since 1996, AT&T Solutions has been managing that network and the equipment.

"There are a lot of things that MasterCard does well," says Arthur Ahrens, senior vice president of computing and network services for MasterCard's global technology and operations division. "We know our clients, the banks. We know what's supposed to happen to the transactions. But AT&T Solutions understands networking and routing and restoration and new technology. We needed a reliable network that makes sure every transaction is handled appropriately."

In addition to the networking aspects, MasterCard chose AT&T Solutions above other smaller managed network service providers because MasterCard needed a company that "would understand the cultures in every country," Ahrens says. "We were looking for a company that was global in nature."

MasterCard started building its own network in the early '80s, but the network was complicated and costly to maintain, requiring a big capital outlay, Ahrens said. So MasterCard turned to AT&T Solutions for its suite of services, including installation and monitoring.

"Every time technology changed, we had to buy new equipment," Ahrens says. "Now every time AT&T Solutions enhances its network, I get the same enhancements.'

In 1997, AT&T Solutions built one of the first virtual private networks for MasterCard to handle settlement transactions, or huge batchesof files that cross the network three times a day and require 100% network availability. Now AT&T Solutions also provides internal e-mail, voice services and videoconferencing for MasterCard.