AT&T develops a new way to work, with a cloud-first approach in Azure

Since patenting the first telephone in 1876, AT&T has led the world in connecting people to one another and to the organizations and resources they need to thrive. Over those 147 years, the company had accumulated about 7,500 applications and a complex infrastructure of mainframes and midrange servers distributed over 34 data centers worldwide. By 2019, some of that infrastructure, and a lot of the homegrown software embedded in those applications, was decades old, which created a complicated IT environment. 

“We had a lot of data centers and a lot of servers on-premises; some were only half-utilized, and some were extremely underutilized,” says Michelle Randolph, Assistant Vice President, Public Cloud Technology at AT&T. “Our challenge was, how do we take all this on-premises infrastructure and save cost for the company?” 

In addition to reducing costs, AT&T knew that reducing complexity would improve its employees’ ability to serve customers effectively, efficiently, and quickly. “To fully transform our business, we had to simplify our IT environment and make it easier for technologists to deliver new solutions faster so we could respond quicker to market changes,” says Jon Summers, CIO at AT&T.

Building an internal alliance

In 2019, the AT&T technology team started planning with finance, operations, and other business groups across the company to simplify the IT environment while expanding its ability to meet its customers’ changing needs. First on the agenda was whittling down the 7,500 applications, and then moving many of those to the cloud to significantly reduce the number of data centers that AT&T operates. Shortly after that process started, the COVID-19 pandemic hit and accelerated the company’s need to modernize its productivity and collaboration tools. 

“We had one of just about every productivity and collaboration application that exists,” says Summers. “The pandemic forced us to quickly reduce the number of those tools, so we decided to go all in with Microsoft 365, Exchange Online, and Teams as our primary collaboration platform.”

Transforming to a cloud-first company

The technology group built a business case for the infrastructure transformation and the need to move some workloads to the cloud to support it. “Getting alignment across the technology, business, and finance teams and getting agreement at all levels in the organization were very important,” says Summers. 

The company had already decided to be a “cloud-first” company, which meant that any new applications would be deployed as a cloud service if possible. “We were going to move away from custom development wherever possible and move more of our business-critical applications into SaaS [software as a service] solutions, working with partners building best-of-breed products,” says Summers. 

After thoroughly evaluating the underlying technology of all the major cloud providers, AT&T decided to go with Microsoft Azure. Azure met its requirements for security, scalability, functionality, and more. 

“What really drew us to Microsoft was that, in addition to Azure technology, we were getting a long-term partner to help us enable our business,” says Jeremy Legg, CTO at AT&T. “We had some of the most sophisticated apps in the world and some of the most ancient apps. Each presented a unique set of challenges in migrating to the cloud.”

Streamlining the environment 

The AT&T technology team spent about six months analyzing which of its 7,500 applications should be retired, retained, or combined with functions in other applications, and which should move to the cloud. When the analysis was complete, they retired about a third of the applications, designated about a third for the cloud, and identified about a third of the apps to stay in a scaled-down footprint of six data centers. 

The technology team further divided those applications designated for the cloud into apps that required source-code changes before they could move to the cloud—the team called this “the modernization migration”—and apps that required few or no source-code changes—called “the optimization migration.” For the first group, the migration team made the fewest source-code changes possible, such as moving a VMware-hosted app that used MySQL to Azure SQL Managed Instance before moving it to the cloud. For the second group, the migration team optimized the footprint, through actions such as replacing logging tools with the Log Analytics tool in Azure Monitor, before moving it to the cloud. 

“At AT&T, we have every type of workload, compute type, and operating system that you can imagine—from Windows to any flavor of Linux. And we’ve been able to migrate them to Azure, using Azure-native tools such as Azure DevOps and Azure Pipelines,” says Randolph. 

By March 2023, AT&T was approximately 90 percent finished with retiring applications and moving applications to the cloud. The company also has a strategic alliance with Microsoft to move its 5G mobile network to Azure. When the move is complete, all AT&T mobile network traffic will be managed with Microsoft Azure technologies. 

With a new cloud-first approach, AT&T developers can deliver innovations, changes, and improvements faster, and be much more responsive to the market and to customers. “In the past, a developer may have had to spend weeks or even months procuring the infrastructure they needed to test and deploy an application. Now they can execute those tasks in minutes,” says Summers. 

This allows AT&T to accelerate new product introductions, while reducing the risk and cost of trying new ideas. If a new idea fails, developers can shut down the development environment without having to tear down and redeploy servers. “In this new Azure environment, the infrastructure is available to developers immediately along with a set of services and capabilities that come along with Azure, which makes it a lot easier for people to innovate,” says Summers. “We also see savings in terms of development efficiency.”

Reducing complexity and costs

Establishing a cloud-first strategy saves AT&T development time and hardware costs and significantly reduces data center costs related to energy, real estate, networking, and administration. By the end of 2022, the company had shut down 10 of its 34 data centers and will continue to close an additional 18 data centers. “When you look at the total cost, not just infrastructure, we were able to reduce our costs by about 30 percent on average by moving workloads to Azure,” says Randolph.

Beyond the cost savings from reducing its data center footprint, AT&T is also able to monitor and analyze its consumption of Azure resources. “Microsoft helped us build a set of tools and processes to help teams understand how Azure resources are being consumed, where we have waste in the environment, and where we have opportunities to course correct,” says Summers.

Meeting changing scalability demands

Not long after moving its sales and customer-care applications to Azure, the company was able to test its scalability and reliability during its busiest season, from early fall through December. This typically starts with a new iPhone launch, followed by the holiday season, which significantly increases sales volume. 

“It’s absolutely essential that our sales, ordering, and provisioning systems operate flawlessly during this peak time,” says Summers. “This past year, 2022, was the first year that a significant number of the business-critical applications that support those workflows were running on Azure, so it was critical that we had 100 percent uptime and excellent performance. I was very pleased with the performance during that time.” 

Engaging employees, expanding possibilities

Another benefit of moving a large share of its applications to Azure and emphasizing cloud-first development is increased employee satisfaction. Upskilling the workforce with cloud tools helps them work more efficiently and effectively so they have more time to develop new ideas. 

“We went from having a handful of Azure cloud certifications to being one of the most cloud-certified Azure clients in the world—and in a relatively quick time frame for a company of our size,” says Legg. “Our migration to Azure really changed the nature of the skills of our workforce.”

Those new skills include using AI to automate a variety of tasks, such as computer configuration management to identify potential problems or add capacity. The technology team is also training a tenant of ChatGPT on Azure to help employees complete HR tasks. And they’re exploring the potential of using ChatGPT for legacy code conversions to migrate from one computer language to another. Read more about AT&T's use of Azure OpenAI Service in this customer story.

“As a technology organization, we want to focus more on software engineering, analytics, and the critical skills that enable us to innovate faster for customers—and less on infrastructure management and operations,” says Summers. “If you're a software engineer and now you have this palette of modern tools and technology that you can use to paint the future, it's a more attractive place to work.”

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