AT&T's virtualization play makes a star out of Affirmed Networks

BARCELONA, Spain--AT&T's (NYSE:T) naming of four suppliers for its Domain 2.0 initiative brought sudden fame and glory to Affirmed Networks, a company that had been a little-known provider of virtualized Evolved Packet Core (vEPC) technology.

At the Mobile World Congress trade show here, AT&T laid out a roadmap to its envisioned network of the future, via what it calls the "user-defined network cloud." Key to this vision is AT&T's Domain 2.0 supplier program, which was first announced in September 2013, and the vendors that will provide technology to AT&T going forward.

Named to the first group of suppliers were Ericsson (NASDAQ:ERIC), Tail-F Systems and Metaswitch Networks, all known names in the telco and IT worlds. However, the fourth company, Affirmed Networks, is much less of a known entity, and it will be supplying an essential piece of AT&T's next-generation network puzzle: vEPC.

At MWC, Affirmed conducted demos from HP's booth rather than one of its own and found itself attracting unexpected crowds. The Affirmed employee manning the demo--David Bastiani, a member of Affirmed's technical marketing staff--said he did not even know about AT&T's announcement until the day after it was made, according to SDNCentral.

Though Affirmed's selection by AT&T appears to have come out of nowhere, the company claims its vEPC is already running production traffic on some as-yet-unidentified LTE networks, which puts it ahead of major infrastructure vendors such as Ericsson and Alcatel-Lucent (NYSE:ALU).

However, SDNCentral noted that unlike those larger competitors, Affirmed is only supplying the serving gateway and packet data network gateway as well as the gateway GPRS support node (GGSN) for supporting 3G traffic. That means Affirmed's solution is missing mobility management entity (MME), a home subscriber server (HSS) and a full-fledged policy and charging rules function (PCRF) server, all of which will have to come from other vendors.

Nonetheless, AT&T's selection of Affirmed makes a statement about how the carrier wants to open up its supply chain to a new breed of nontraditional vendors whose IP and virtualization smarts can help AT&T gain service flexibility and long-term cost savings. Ultimately, its new network design, based upon network functions virtualization (NFV) and software-defined networking (SDN), will take many physical network functions and virtualize them so they can be delivered via cheap servers and "white box" networking gear rather than needing costly and expensive proprietary hardware.

"It's more than just a change in how the network is designed. It also changes how we do business, our relationships with suppliers and how we manage software. We're reinventing how we scale and operate to manage our services easier, similar to how they're provided in cloud data centers," said Tim Harden, president, AT&T Supply Chain.

"AT&T is transforming the WAN in the way IT transformed the data center," said Roger Entner, founder and lead analyst at Recon Analytics. "It's an ambitious program and turns the traditional vendor relationship on its head, opening the doors for new, innovative companies to participate," added Entner, a FierceWireless contributor.

"What AT&T has really introduced is a plan for cultural change within the company," commented David Krozier, principal analyst at Ovum. "AT&T is evolving from a networking technology consumer, buying products that suppliers develop, to early experimentation and driving technology."

Krozier added: "The success of this cultural transformation to a software business is more important to the future of AT&T right now than any technology deployments or supplier programs. Ovum expects other communication service providers to develop similar transformation plans."

Spain's Telefonica also recently unveiled a NFV program called Unica, which will launch in June and is aimed at virtualizing more than 30 percent of its new infrastructure by 2016.

AT&T has pledged to identify other Domain 2.0 suppliers over the course of the year.

For more:
- see this AT&T release
- see this SDNCentral article and this article
- see this Wall Street Journal article (sub. req.)

Related articles:
AT&T launches user-defined cloud strategy
AT&T progressing on 2.3 GHz LTE rollout, targets all-IP future
Informa: SDN, virtualization will first be applied to network core
AT&T, Cisco showing the way to SDN and NFV
Virtualization creating a breeding ground for rival vendors

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