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Supply chain revolutionary: AT&T leads procurement zone adoption

Kate Gerwig
As predicted earlier this year, the traditional telecom procurement process is in for major changes, and the new supply chain reality is already taking hold. Leading the way, AT&T has established its new

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Domain Supplier program and as a result, the chosen vendors will be responsible for a lot more than their own products in terms of the integration and operations management of network equipment and software solutions.

Other providers are also looking moving to a "procurement zones" model, but AT&T is already announcing its winners. AT&T's new procurement strategy will revolutionize how the company sources technology for its networks. AT&T's goal is to make sure it has the best end-to-end technologies in place.

According to the company, each domain will have two suppliers that have been pre-qualified by AT&T. Those selected suppliers could work with AT&T on solutions for a set multi-year period, which puts other vendors at risk of losing business, unless they find their way into the domain vendor's solution ecosystem as a partner.

The blog mill says traditional telecom networking and operations organizations haven't been thrilled with the change because they want to choose the best technology for the job, not restrict the number of suppliers they can use. But AT&T CTO John Donovan (not a career Bell employee) is backing the idea.

AT&T hasn't said how many technology domains it will have, although initial estimates were 14. The company has also said that some of the chosen vendors have been notified, but that was the end of the details for the time being.

With a procurement zone system, the winners will have more skin in the game than just selling and delivering products. AT&T has it in mind for suppliers to be responsible for integration, testing and support for end-to-end solutions.

Some winner's announcements have started rolling in. Ericsson has been chosen as one of AT&T's two supplier vendors for wireline access, which includes technologies such as IP/DSLAM and FTTx. We're waiting to see if some of the usual suspects come next: Alcatel-Lucent, Cisco, Microsoft, Ciena or Huawei.

In terms of the wireline access domain, Ericsson has already announced that Adtran will be its partner for remote DSLAM products. And so the supply chain reorganizes, with the chosen doing the choosing for additional partners to make their solutions complete.

This was first published in September 2009

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