Editor's Corner—With Network 3.0 Indigo, AT&T moves closer to becoming Silicon Valley-style software company

LAS VEGAS—AT&T today took the wraps off a thing it’s calling Network 3.0 Indigo. The company described it as the “next generation of the internet,” a platform that will leverage big data, cloud processing, machine learning, artificial intelligence and open source software to foster sharing and build trust among members of a community—any community. It’s the kind of thing I would expect from a Silicon Valley startup, not a telecom behemoth.

Nonetheless, this is what AT&T is promoting here at its Developer Summit, held in conjunction with the Consumer Electronics Show. And Network 3.0 Indigo isn’t the only techy, software thing AT&T is touting: The company also outlined its increased usage of open source software, service virtualization and software “containers,” whatever those are.

And though AT&T’s launch of DirecTV Now and its pending acquisition of Time Warner are much more concrete examples of the operator’s strategy in the market, AT&T’s embrace of the software side of telecom is more and more becoming an important part of the story.

But first, what exactly is Network 3.0 Indigo?

A platform for number crunching and insight

Victor Nilson, AT&T’s SVP of Big Data, told me the carrier has been working on Network 3.0 Indigo for several years. He said the product stems from the big data division Nilson formed in AT&T in 2013, and that the goal of Network 3.0 Indigo is to create a method for different entities to share data sets without having to worry about privacy or security issues.

He explained that the Network 3.0 Indigo platform can protect information like users’ location while still allowing different groups to access anonymous location data.

“Today there’s not a good way to do that,” Nilson said. “There’s not a good abstraction mechanism, there’s not a good sharing mechanism, there’s not a good security mechanism, there’s not a good authentication mechanism, that can pull that [information] up to a higher level of data sharing.”

Nilson said the Network 3.0 Indigo platform could be used in a wide variety of markets and situations. For example, in a smart city scenario, nearby towns might want to share traffic information with each other in order to speed up the morning commute, but they currently can’t do that because their systems can’t talk to each other and because they don’t want to disclose any private citizen data. But Nilson said Network 3.0 Indigo—which stems from AT&T’s own use of big data analytics in its operations—would allow data sharing between those towns as well as protections for user privacy.

And once all that data is combined and analyzed, the results can be significant. For example, Nilson’s big data team within AT&T crunched the numbers on the carrier’s network and discovered it could combine or turn off power to millions of pieces of unused or unneeded telecom equipment throughout the country, an effort that helped save the carrier $119 million last year in energy expenses.

But Network 3.0 Indigo is just one of many high-end software projects ongoing inside of AT&T. The operator’s move to software-defined networking and virtualization has been widely discussed, and AT&T’s John Donovan today said that the operator has now virtualized 34% of its network—surpassing its goal of virtualizing 30% of its network by the end of 2016.

AT&T has said it hopes to virtualize fully 75% of its network functions by 2020 (though Donovan declined to provide virtualization goals for 2017). AT&T’s virtualized services today include VoLTE, video content distribution and optical transport, among other things.

AT&T has said its move toward a software-defined network will help it launch services faster and save money by using commodity, off-the-shelf hardware instead of specialized, expensive equipment. Exactly how much money might AT&T save through its virtualization efforts?

"We're in a technology evolution that has seismic impacts to our vendor community. So we have to assist both our employees and our suppliers in this transition,” Donovan told me. “If you put targets out there that spell gloom and doom—gloom for your employees and doom for some of your suppliers—that doesn't help them transition. Because we need them both."

The open sourcing of telecom

Another example of AT&T’s continued move toward the software side of telecom is its growing embrace of open source software. Indeed, one of the first speakers during AT&T’s keynote presentation here at its Developer Summit was Jim Zemlin, executive director of the Linux Foundation.

AT&T released its ECOMP software platform into the open source Linux Foundation in the hopes of getting other carriers to use—and improve—ECOMP. AT&T has described ECOMP as the operating system for virtualization.

"When I arrived in 2008 we had no open source in the business. Last year we doubled the amount we had in use,” said Donovan, AT&T’s chief strategy officer and group president of technology and operations. Donovan declined to disclose specific numbers.

But by 2020, Donovan said AT&T hopes to have fully 50% of all of its in-production code coming from open source platforms.

And that’s no small task, Donovan said. He said that AT&T has 11 billion lines of code in its repository, and that roughly 4 billion lines of code are being touched and used within the company at any point in time.

"That's a lot of lines of code. That's a lot of manpower. Getting to 50% of a big number like that in production is a really big undertaking,” he said.

AT&T’s embrace of software is certainly noteworthy, but since the carrier has declined to put any cost-savings metrics around the effort, it’s difficult to measure the overall effect of the move. And though Network 3.0 Indigo is certainly interesting, it’s essentially only a concept that AT&T has promised to flesh out over the coming months—meaning, it’s not anywhere close to being an actual product that could generate revenues.

But Network 3.0 Indigo and the other new software strategies by AT&T certainly appear to position the carrier among other software heavyweights like Google, Oracle and Amazon. And that kind of Silicon Valley company is definitely noteworthy for a telecom behemoth. – Mike | @mikeddano