AT&T to Host Shanghai

Telecom giant is using hosting as a ticket to mainland China and a launching pad for other projects worldwide

July 28, 2005

3 Min Read
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AT&T Corp. (NYSE: T) will use its global network of hosted data centers to launch business in mainland China and elsewhere and unveil new services based on virtualization.

AT&T plans to open an Internet-connected hosted data center in Shanghai later this year in an attempt to tap into that countrys technology boom, according to Mike Jenner, vice president of AT&T’s hosting and application management service. While AT&T opened a hosted data center in Hong Kong in 2003, the one in Shanghai will be its first effort on the mainland.

The news reflects fresh activity in AT&T's hosting business, which caters to large enterprises and businesses interested in outsourcing data center requirements. AT&T's Data and Internet Protocol & Enhanced (IP&E) Services, which include managed services and hosting, accounted for $2.1 billion of AT&T's $5.2 billion business revenues when it announced its quarterly results last week (see AT&T Boosts Q2 Profit).

Jenner expects a range of companies to host their hardware, software, and applications at the site in Shanghai. He won't reveal its size, but he confirms it will offer the same services as 26 other AT&T Internet Data Centers elsewhere in the world.

The market in China could be big for AT&T. Although India has grabbed most of the offshoring headlines in recent years, China is catching up fast. Analyst firm Frost & Sullivan, for example, expects the gap between the two countries to narrow, thanks to a number of IT-friendly initiatives undertaken recently by the Chinese government (see Global Outsourcing Gains Momentum).“Manufacturing, consumer goods, and technology are three key industries driving expansion into China,” Jenner says. “There’s also offshoring work that our customers need to do.”

AT&T is one of many U.S. companies eyeing the technology opportunities in China. Michael Hogan, vice president of technology and operations at online gaming company Turbine Inc., which is also an AT&T hosting customer, says the entertainment industry in the region is booming. “We think that in the next few years one of the biggest drivers in the Asian market will be getting broadband entertainment to users,” he says.

South Korea is already regarded as a global trailblazer when it comes to broadband, although Hogan believes China is nipping at its heels. “China is on the verge of phenomenal growth,” he says. “They are working very hard to get broadband to the masses.”

But China is not the only area where AT&T is looking to expand. The telecom giant is putting the finishing touches to another new data center in San Jose, Calif., to cope with increased demand in the Bay Area. AT&T already has a hosting data center in Redwood City, Calif., although this is “nearing its capacity,” says Jenner. The San Jose facility will be available for use in November, he adds.

Elsewhere, AT&T is expanding its New York City data center, which includes doubling its network capacity.AT&T has also got new hosted services up its sleeve. Chris Costello, AT&T’s director of product management for managed hosting, tells NDCF that a new virtualization service will be available to customers in December.

This will enable users to run multiple applications on the same server, she says, and set policies to manage the applications. Users also can track any changes made to their data center environment during system downtime.

Customers can use the service to test their software. “It will enable users to rent a testing environment rather than signing a long-term contract for hardware,” says Costello.

— James Rogers, Site Editor, Next-Gen Data Center Forum

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