This article can be found on Engineering.com.

Telecommunications giant AT&T recently surprised industry observers with its shift toward a cloud-based architecture called network functions virtualization (NFV). NFV means the company will stop running its massive network on expensive communications hardware and will migrate to cheaper commodity servers controlled by standard software instead of proprietary protocols. In connection with its NFV initiative, AT&T announced its new vision for a “User-Defined Network Cloud,” a service model in which customers will “have more control” and “the ability to add new network services on-demand and in near real-time.”

Tim Harden, president of AT&T Supply Chain, said this new strategy is “more than just a change in how the network is designed,” in a statement. “It also changes how we do business, our relationships with suppliers, and how we manage software. We’re reinventing how we scale and operate to manage our services easier, similar to how they’re provided in cloud data centers.”

Why is AT&T’s move so surprising?

“Telecommunications is the most conservative industry you could imagine,” said John Parkinson, affiliate partner at Chicago-based Waterstone Management Group, an advisory firm focused on serving the technology sector. Parkinson points out to ThomasNet News in an interview that AT&T’s move underscores the emerging model of next-generation IT infrastructure (NGI), saying that if a company like AT&T is making that kind of investment in NGI, it’s worth paying attention to for other industries.

According to a recent paper by New York-based management consulting firm McKinsey & Co., IT infrastructure leaders are excited by the possibilities of NGI, although they see some obstacles to its implementation, including security and economic concerns.

McKinsey identified the principal components of next-generation infrastructure as:

l  Open-source environments

l  Softwaredefined networking (SDN) and storage

l  Cloud solutions, aka “as-a-service” offerings

l  Cloud orchestration layers

l  Application configuration management

Parkinson thinks the attraction of NGI comes from its promise as a solution to a longtime IT challenge: the build-up of on-premise legacy infrastructure. “You constantly need to play catch-up to keep the business happy,” Parkinson said. “The business always wants to leverage the next generation of technology,” so the IT team is under constant pressure to add new assets and capabilities, he added. “You end up with an accretion of technologies as old as one or two decades — a bunch of investments that are not really random but are not terribly coordinated either.”