AT&T is having ‘many discussions’ with popular software-as-a-service providers about using its scalable dedicated networks for their cloud offerings, in a move that could make them more popular enterprises that have tough service level agreements.

Steven Caniano, vice president of hosting, managed applications and cloud at AT&T, revealed at a briefing this week at the company’s Global Network Operations Centre that capacity on networks is a problem for popular public cloud providers that want to be seen as serious players in the enterprise. Although he was reluctant to be specific about what companies AT&T was engaged with, he said that there was ‘no lack of interest’.

“I will tell you that a lot of the very common, large cloud providers, who desire a play in the enterprise, are having many discussions as to how to do that, and many of those discussions are with us,” said Caniano.

“I would suggest that this an area to watch.”

Although AT&T offers its own variety of cloud services over dedicated global networks, which are designed to be more secure and more scalable than those available on the shared public internet, he believes that there is scope to partner and increase the company’s market share in the –as-a-service market.

He said: “We will win a larger share if we find a way to be more relevant for when a customer needs a cloud capability we don’t provide. Whether that’s in another geography, or a SaaS functionality that we aren’t in the market of building, but would sit nicely on top of our cloud - we believe that is a positive trade off.”

Caniano explained that the traditional public cloud providers, which often rely on public internet infrastructure to deliver the data and provide services, are struggling to deliver the performance of a scalable, dedicated network, at a low cost.

“What’s interesting in the traditional [public cloud] model, is that one of the big elements of costs is the network. Generally with those models, you pay on the traffic that leaves across the network. In some cases that’s a higher proportion of the bill than what you get in the datacentre,” said Caniano.

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“Amazon and Google get a lot of attention by saying that they are lowering the cost of each virtual machine, but you almost never see them say anything about doing something with the network. They are going to need to - that’s a hidden cost of cloud.”

He added: “We have offered our AT&T cloud in an integrated fashion with our network. We have literally built the cloud into our network, such that when you are an AT&T VPN client, and they run traffic all over the world on our enterprise networks, without any additional pipe, in a secure fashion, you can dynamically access our cloud. We think it gives you the best of both, we scale the network with the cloud as you need it.”

AT&T has already made moves in this area, albeit just at an infrastructure level, where it partnered with IBM earlier this year to provide its SmartCloud Enterprise+ solution over AT&T’s virtual private network.

Caniano reiterated that AT&T’s strategy is definitely to pursue partnerships like this in the future.

“I would say that we have a twofold strategy in cloud. One is to offer a premier, integrated, network-based cloud that we sell directly to our customers. The second is to offer a secure, cloud enabled network that connects to partners that we can offer through their clouds,” he said.

“We are not a software company that is going to build a Salesforce.com CRM, we are not a Microsoft that is going to build a suite of services. There are many clouds out there that would benefit from our technology. “

He added: “We do see the opportunity to position our network as a platform for cloud processing across multiple clouds. A highway for business, that would not be open to public traffic, but would go to repositories it needs – the IBM cloud, partner X cloud, etc.”