Sourcing for a Software-centric World
Smartphones and new technologies have been driving staggering data usage increases – 150,000% from 2007 to 2015 – on our network. The only way to stay ahead was to lower the cost of building and operating our network. We needed to create a more streamlined and efficient network.
We began to virtualize our network by moving from custom-built physical equipment to software running on standard hardware.
With the help of software-defined networking, network function virtualization and other technologies, we’re transforming our network from hardware to software-based. And with it, we’re giving customers greater control of their services.
So, how does this change to the core of our network affect our supply chain?
The technology shift lets us broaden our vendor ecosystem and foster disruptive suppliers and technologies that align to our roadmap. With this broader ecosystem, AT&T is able to speed innovation and improve our cost structure.
But, it’s not just about features and price anymore with our vendors. It’s all about the total cost of ownership. We’re focused on performance, resiliency, code efficiency, security and vendor interoperability.
We’re also looking at other options versus simply buying direct from suppliers:
- Creating tech in-house. We’re building some of our own functionality like ECOMP, the engine running our software-centric network.
- Unbundling the services we buy. Not only are we sourcing hardware and software separately, we’re breaking apart many of the bundled software components as well. That way we only pay for what we need. So, instead of buying a value meal from one place, we can look for the places that make the best ketchup or fries or burger, and skip the soda if we don’t need it. This is yet another reason we’ve been able to expand our supplier base – we now work with vendors that specialize in the standalone pieces.
- Working with open source groups. We’re involved in the open source community – OpenStack, OPNFV, OpenDaylight, ON.lab, OpenContrail, the Open Compute Project and others. Together, we’re building software and standards as an industry. We’re not only contributing to it, but using what already exists.
A competitive and healthy vendor ecosystem is essential to our Domain 2.0 Supplier Program. We have 10 vendors specifically supporting our software-centric network build. But we’re also forging new relationships with software makers that will help us reach our 2020 virtualization goal.
As we bring more and more software into our network, we have new opportunities to buy from these companies. It’s been exciting to add software players like Metaswitch, Brocade and Radcom to our supply chain.
Our path to 2020 is not just about revamping our technology. It’s also about reskilling our people. We’ve talked about our company-wide skills transformation before and have made great progress so far.
My supply chain team is also joining the skills pivot, focusing on software sourcing, data analytics and other skills. These capabilities will strengthen our team as we source for a software-centric world.
We’re no longer relying on the traditional, safe ways of doing things – whether it’s building our network, procuring equipment or preparing our employees for the future. Our mantra is “take risks, fail fast and innovate.” We’re gearing up for 2020 and beyond.
Susan A. Johnson, Senior Vice President, Global Supply Chain, AT&T Services Inc.
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