AT&T to Nurse Blue Cross Data

Carrier makes its mark in storage services, apparently all on its lonesome

June 4, 2004

3 Min Read
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AT&T Corp. (NYSE: T)is leading the charge of carriers back into the storage service provider (SSP) arena. But so far, it's appears to be a solitary foray -- although that could be because AT&T is the only one making noise about it.

AT&T this week scored a three-year, $3.6 million contract with Blue Cross and Blue Shield for hosting and storage services. AT&T will host the database of healthcare provider plans for the company, using its data center in Lyle, Ill., to handle records for 88 million subscribers in the United States. The carrier also will offer Blue Cross and Blue Shield business continuity capabilities.

This is the third major hosting deal AT&T and its strategic partner, Sun Microsystems Inc. (Nasdaq: SUNW), have landed this year. AT&T previously announced hosting deals with the Chicago Mercantile

stock exchange and the Chicago Tribunenewspaper (see Chicago Tribune Gets a Tech Rewrite).

These wins are anomalous in the carrier world. Other providers have announced plans to get into storage services, but no one's had much to show. Last August, WilTelCommunications Group Inc. (Nasdaq: WTEL) said it was working on managed storage services in its labs; and Sprint Corp. (NYSE: FON) announced a disaster recovery service in July (see Carriers Getting Hip to Storage and (see Sprint Stretches Storage Over IP). Since then, we havent seen any customer announcements, and those companies didn’t respond to calls asking if they had any.

That doesn't mean no other carriers are providing storage services though. Kevin Thomas, marketing director of ManagedStorage International Inc. (MSI), says carriers MSA partners with, such as Qwest Communications International Inc. (NYSE: Q) and Cable & Wireless, are doing well through resellers. "Those companies are doing a fair amount of business and some are doing gangbuster business," Thomas says.We should be hearing from more SSPs soon. Marketing director Steve Siegel of Arsenal Digital Solutions Worldwide Inc., an AT&T partner, says his company is in discussions to offer data centers and remote services to other carriers and network providers (see Carriers Tack on Storage Services). Whether they sign on with his company or not, Siegel says those companies will enter the SSP arena sometime this year.

“A lot of carriers and network providers will be getting into this soon,” Siegel says. “They need a way to differentiate, and they see data as one of the opportunities to do that.”

AT&T is making plans to increase its capacity for hosting. Spokesman Mike Pruyn says the carrier plans to add data centers in London, Frankfurt, Paris, and Tokyo, bringing the total to 25.

AT&T is also being aggressive in its partnerships. Along with the replication services it gets from Arsenal, AT&T has partnered with EMC Corp. (NYSE: EMC) for email archiving and Sun for servers and software (see EMC Helps AT&T Archive Email).

While these are interesting moves, they may amount to very little from a market perspective. After all, AT&T's announcement last September that it would expand its Web hosting program to include managed data storage services was seen as a sign that interest in the storage service provider model was rebounding (see AT&T Lures Storage Users and AT&T Expands Storage Services). And here we are a year later...— Dave Raffo, Senior Editor, Byte and Switch

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