2015 TOP 100

Top 100: AT&T leader sees mobility driving their future

Government agencies and the contractors that serve them have been dealing with several years of tight budgets and uncertainty about project starts, funding and other issues.

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Kay Kapoor, president of AT&T Government Solutions, describes these as dark years that have created a new normal for the market.

“Doing more with less is not a one-time occurrence. It’s become the routine,” she said. “The government market has morphed into a more fiscally prudent environment.”

But the change has played to AT&T’s strengths, she said, because the company has the network infrastructure as a carrier to deliver solutions and new technologies in a cost effective way.

The company ranks No. 14 on this year’s Top 100 with $1.9 billion in prime contracts.

A major component of the company strength is its commitment to research and development, where AT&T has spent billions on new products and solutions for government and commercial customers. These solutions come to market ready and scalable, she said.

Most of the investments focus on AT&T’s core network and what can sit on top of that network, including cloud services, storage, virtual private networks, and, of course, mobility.

In the government market, Kapoor’s team does some customization around special needs for cybersecurity and other government unique requirements, but for the most part, the company is delivering commercial products and services.

“Our customers can cash in on the investments that we have already made. We get our investment back by selling the solutions as a service,” she said. “Our customers buy by the drink.”

AT&T’s government business has made several changes in recent years to put itself in a better position to win this kind of work. Part of that effort is talking to customers to educate them about managed services and the X-as-a-service approach, Kapoor said.

AT&T also stood by its customers as the bottom dropped out of their budgets and helped them shift to what is known as an operating expense model versus the more traditional capital expense model, she said.

“We can provide the capital, and they can continue to buy by the drink, and they scale up and scale down as needed,” she said.

Adoption of the as-a-service model is not universal, however; Kapoor described it as hit or miss, which is why educating customers and having a customer-facing organization is important.

“Sometimes it is hard getting them over the hurdle because the procurement officers are saying, we’ve never done this before,” she said.

It is helping, though, that senior leadership at the agencies is support of the shift, Kapoor said.

What customers are buying is evolving, Kapoor said, particularly around mobile where the commercial mobile services such as mobile banking are pushing getter demand for mobile citizen services.

“That is really taking hold from DISA to civilian agencies. They are asking for secure mobile solutions,” she said.

For example, AT&T is upgrading mobile technologies for the General Services Administration. The company is doing similar work at Veterans Affairs as part of their connected health initiative. The U.S. Postal Service is another major mobility customer for the company.

“We’ve radically transformed the way they deliver their mail and packages, and it is all through the Internet of Things, mobile to mobile communications. That’s a significant contract for us,” she said.

The company is overhauling the telephone systems for 300 embassies and consulates around the world under a $275 million contract. AT&T took that work from an incumbent in July 2014, Kapoor said. The contract shifts the phones services to a voice over IP system. “That was a big win for us last year,” she said.

The Centers for Disease Control and Prevention also turned to AT&T during the Ebola crisis when it established the CARE program, which stands for Check and Report Ebola. According to the CDC website, CARE kits are given to travelers entering the United States from Guinea or Sierra Leone. The kits help them monitor their health for 21 days. An AT&T cell phone is part of the kit so information gets to CDC experts quickly.

“With our mobility services and devices, the CDC was able to fight and track the virus better,” Kapoor said.

The Postal Service contract is an example of how AT&T is embracing, the Internet of Things, a major new technology trend.

“It is going to be here faster than we realize,” Kapoor said. The use of machine-to-machine communications is growing rapidly in areas such as fleet management, shipping and logistics.

In 2014, AT&T had 20 million devices connected to its network, which was up 21.2 percent from the year before. Of those, 800,000 were cars, she said.

“We see a huge market and we’re just scratching the surface,” Kapoor said.

As AT&T moves forward in the federal space, a major opportunity is the $50 billion Enterprise Infrastructure Solutions contract that is part of the General Services Administration’s Network Services 2020 Strategy. This is the follow-on to the Networx contract for telecommunications services. AT&T is one of the incumbents on Networx and will pursue EIS as a prime.

Kapoor said she doesn’t like to call EIS a telecommunications contract. “It is more about communications and networks and mobility,” she said. “It is a continuation of Networx but with newer technologies.”

But it will not be a contract that will compete with other major GSA vehicles such as Alliant. “There are things you can buy under Alliant [which AT&T also holds] but not everything. They need both,” she said. “And they are very different.”

She praised GSA for their level of engagement with industry, in gathering ideas and feedback as they development the solicitation for EIS. “They get an A-plus in my book from a collaborative stand point,” she said.

While the market will continue to be tight and very competitive, Kapoor described herself as bullish.

“The government’s missions are becoming more and more technology dependent. The mission is no longer able to be completed without some amount of technology propping it up,” she said. “The need for converged technologies is growing exponentially, that’s why the road ahead is very strong for us.”

About the Author

Nick Wakeman is the editor-in-chief of Washington Technology. Follow him on Twitter: @nick_wakeman.

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