with Mark Nagel, executive director of marketing for AT&T Foundry
During the past several years, AT&T Mobility (NYSE:T) has set up a series of innovation centers, or foundries, at various locations around the world. The first was opened in Plano, Texas, in March 2011, followed by one in Ra'anana, Israel, in June 2011 and another in Palo Alto, Calif., in September 2011. Last August, AT&T opened its fourth facility in Atlanta focused on the connected car and home. Shortly after that, AT&T added M2M capabilities to the facility in Plano. All of the foundries serve as test-beds for new technologies and give AT&T an opportunity to work with startups. FierceWireless Editor Phil Goldstein recently spoke with Mark Nagel, executive director of marketing for AT&T Foundry, at the Palo Alto facility. Nagel discussed how the foundries have changed, how the work at the foundries has informed AT&T's network evolution and why they're important for carriers. The following is an edited version of the conversation.
FierceWireless: How has the Foundry systems evolved since it opened in 2011? What has AT&T learned about the process?
Nagel: I think we've made a lot of progress toward commercializing the early work that happened in the foundries. As you might expect, over two to three years now, we're starting to see some of the first things that happened in the foundry enter the market, and that's very rewarding.
For us, too, the tendency is to, like most big companies, be insular, to look internally for solutions. We have learned a lot by opening our perspective to the outside world, and work with startups and other companies to move faster than we would have on our own.
FierceWireless: Can you give me some examples of some tests or prototypes that were done in the foundries that have made their way to market?
Nagel: A good example out of the Plano foundry is a product called Toggle. You're likely aware of this whole trend of bring-your-own device and consumers not wanting carry two phones, one for work and one for personal anymore. Toggle is a function, an application environment that allows you to run enterprise applications like email and access to documents in one part of your phone and effectively switch that to a personal view in the same device. That started as a prototype in an effort with a third party in Plano, and we brought it to market.
We also did work with Intucell here, although they're a company that we found in Israel. An interesting twist on them is they've since been acquired by Cisco, one of the foundry sponsors. The foundry was an environment to prototype their network efficiency algorithm. It affected handoff of calls and data in between cell sites. That's something we were able to prototype internally and iterate within the city of San Francisco, and ultimately state- and nationwide.
FierceWireless: Overall in terms of the foundry system, how many partners does AT&T have?
Nagel: It would be safe to say that it's 400 to 500 a year that we meet with.
FierceWireless: Where do they come from primarily? Is it startups in the Bay Area? Or does it just depend on which foundry they are working with?
Nagel: It does. Part of the reason we have that global reach is to find things you wouldn't unless you have feet on the ground. Israel is an incredibly innovative place. The spirit of entrepreneurship and the things that are coming out of that environment are truly amazing. But they're hard to access unless you have a physical location and people to do that.
FierceWireless: Does AT&T actively go and seek them out? What's the process like in terms of how you get connected?
Nagel: They come from a little bit of everywhere. Very careful venture capitalist relationships are a big part of the foundries. So we appreciate those referrals and feedback that comes from VCs. But they also come from our own contacts. We'll hold events occasionally in the foundry--hackathons, meetups, things along those lines that bring people in. We participate heavily in the communities as well, so our folks are part of the special interest groups and community groups in the Valley to just get to know people.
We also do hold these events called a Fast Pitch, and it's an elevator pitch. A great foundry practice is to bring these folks in, give everyone a few minutes to tell us about their solution, and then that would likely beget a prototype and an effort to productize something.
FierceWireless: How many products have been released into the market that were developed in the foundry?
Nagel: I don't have a count. It would be a ballpark. There are 400 to 500 companies we meet with [per year]. That might come down to 60 or 70 projects. It might be less than 10 that actually go to market. The idea is to keep a really wide funnel. Projects usually last around 60-90 days.
FierceWireless: How is this facility different from the one in Plano and the one in Israel?
Nagel: We find that a lot of the networking companies in software-defined networking efforts are happening here in the Bay Area, so we take advantage of that. But in reality it doesn't prohibit us from talking to a great SDN company in Israel when they're there.
FierceWireless: Can you give me a sense of the kind of work AT&T is doing on either SDN or Network Function Virtualization here and how that's informing what AT&T is thinking of for how to evolve its network?
Nagel: We've been very public in our interest to move to an all IP-based network, and it's being driven by things like the amount of video traffic on the network, and pricing pressures that are causing us to rethink our costs and affect that dramatically.
Specific things in the foundry have been prototyping our cloud infrastructure. We're here with Ericsson, [Alcatel-Lucent] and Cisco, so our major network suppliers who are going to have an interest in figuring this out as well. For example, part of the work we've done here focused on our open stack sponsorship and developing some of the first internal cloud prototypes built on open stack. Right now we're looking at suppliers and I don't think we've announced any, so I can't give you any names. But we're looking at suppliers for that next-gen architecture.
FierceWireless: Are there going to be more facilities that are specifically dedicated to vertical markets the way the one in Atlanta is to the connected car and home automation?
Nagel: No. I don't think we're likely to expand.
FierceWireless: What do you think carriers get out of the innovation center or foundry concept?
Nagel: I think for us, it's a place to actually do work with the outside. A lot of these companies that we work with are not large, mature entities like our primary suppliers might be. They're small companies that you wouldn't have a way to work with unless you had a place like this to do it.
I've heard working with a carrier described as "dancing with an elephant" before. It's easy to get stepped on. And for us, we've got everything we need here from a people and technology perspective to help understand if there's a "there" there. It's a special environment in that sense, in that we can actually work together to figure it out instead of conference calls, and coming into offices and presentations and the traditional approach.