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AT&T Punts Managed Hosting Services to IBM Cloud

AT&T is getting out of the managed hosting business, shifting those workloads to the IBM Cloud portfolio. This is the latest example of a telecom provider struggling to figure out how to monetize cloud and managed services.

Under terms of a deal announced today:

  • IBM will deliver the managed applications and managed hosting services that AT&T previously provided.
  • AT&T will continue to provide networking services including security, cloud networking and mobility that it provides today.
  • The two companies say they will “work closely to innovate and deliver a full suite of integrated solutions to customers.”

Telecom Companies Face Cloud Pressures

AT&T isn’t the only telecom company rethinking its cloud and hosting strategy. Verizon earlier this year was rumored to be selling its cloud business, though the company has since dismissed the rumors. And CenturyLink is trying to sell roughly 60 data centers, though the company plans to retain the cloud businesses and revenue streams running within those data centers.

Telecom companies could face additional revenue and business pressures as emerging rivals continue to launch cloud-based PBXes. Microsoft, for instance, recently expanded its Office 365 business with new cloud PBX and Skype for Business capabilities. And fast-growth cloud providers like Evolve IP continue to drive new unified communications revenues.

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