Enabling the Cloud AT&T

Enabling the CloudAT&T Margaret T. Chiosi Executive Director - Global Optical & Ethernet Service Development AT&T Labs MEF Board of Directors

Cautionary Language Concerning “Forward-Looking” Statements This presentation contains 'forward-looking statements' which are based on management's beliefs as well as on a number of assumptions concerning future events made by and information currently available to management. Readers are cautioned not to put undue reliance on such forward-looking statements, which are not a guarantee of performance and are subject to a number of uncertainties and other factors, many of which are outside AT&T's control, that could cause actual results to differ materially from such statements. These risk factors include the impact of increasing competition, continued capacity oversupply, regulatory uncertainty and the effects of technological substitution, among other risks. For a more detailed description of the factors that could cause such a difference, please see AT&T's 10-K, 10-Q, 8-K and other filings with the Securities and Exchange Commission. AT&T disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. This information is presented solely to provide additional information to further understand the results of AT&T.

Agenda • IT as a Utility – Cloud Services • Cloud Requirements • Software Defined Networks • AT&T Cloud Services

IT/Network as a Utility • From “The Big Switch Rewiring the World, From Edison to Google” by Nicholas Carr • In 1850s innovative industrialists (e.g. Henry Burden) had their own private power generators • By early 1900s, electricity became a utility service provided by a few companies to major companies and then the masses • We are at this same juncture in early 2000s

Network/IT as a Utility Amazon Google iApple Power Utility Internet Cloud Carrier Power grid BusinessConsumer Users

Is The Industry Moving Towards A Broadband Utility Model? 87% of respondents agreed that the industry is moving towards a broadband utility model, and only 2% disagreed. Question: Do you agree with the following statement? At a macro level, carrier Ethernet standards and technologies are moving in the direction of enabling a broadband utility model in which (a) Ethernet serves as the unifying layer to virtualize access to the network, (b) high-capacity Ethernet and wavelength services function as transmission lines, and (c) large data centers play the role of power generation plants in the network. In this model, utility computing and storage capability are connected by low-latency Ethernet and wavelength services and are delivered to a customer – with an on-demand option – through a single Ethernet user network interface that can handle many applications with SLA guarantees. 87% agree Source: Ethernet Executive Council State-of-the-Industry Survey Report, 4Q 2011, Heavy Reading

Cloud Market New Network Requirements Future • On Demand/Dynamic Network Services • Set profile (e.g. bandwidth, COS, latency, availability..) for a set duration of time • Activation - Secs, Mins, Days • Duration – Days, Months • Pay as you go • Standard API • To provision (add, delete, change) network services • To collect Performance Management • To perform Fault Management • To provide Usage Information for Billing/Applications • To provide Network Information for Applications Today • Static Bandwidth/Attributes • Static Ordering • Multi-year Lease

What is SDN? • Software-defined networking (SDN) • Enables network applications to request and manipulate services provided by the network and allow the network to expose network state back to the applications • e.g. • Give video priority over e-mail • Create rules for traffic coming from or going to a certain destination • Quarantine traffic from a computer suspected of harboring viruses • Provides a way to try out new solutions in the mobility market

API/NBI OS OS OS OS OS Feature Feature Feature Feature Feature Feature Feature Feature Feature Apps Feature Apps Custom Hardware Custom Hardware Custom Hardware Custom Hardware Custom Hardware Transition to SDN (IETF/ITU)

Network OS OS OS OS OS OS Feature Feature Feature Feature Feature Feature Feature Feature Feature Feature Feature Feature Custom Hardware Custom Hardware Custom Hardware Custom Hardware Custom Hardware Transition to OpenFlow

Agenda • IT as a Utility – Cloud Services • Cloud Requirements • Architecture Evolutions • AT&T Cloud Services

AT&T Enables the Virtual Private Cloud VirtualPrivate Cloud • Single tenant • Dedicated infrastructure • On-premises or hosted Private Cloud • Hybrid model • Private/VPN connectivity • Trusted logical separation • Internet based • Massive multi-tenancy • Best-effort reliability Public Cloud Combining the security and performance of private cloud with the economics and flexibility of public cloud Compute Storage VPN Enterprise IT End Points

AT&T As a Service Strategy Deliver integrated content, applications and services to any device, anywhere, anytime AT&T MarketplaceUser experience/portal management Customer Benefits • End-to-end management • Dynamic scaling • Mobility integration • Enterprise grade experience • Integrated service delivery model Applications AT&T • ISVs • SaaS Partners PlatformHosting • PaaSPublic/Private/Hybrid Cloud Management/ Integration/ Security AT&T Network Fixed and Mobile Enterprise Worker Mobile Worker Performance ● Security ● Reliability

AT&T Network: Premium Global Infrastructure Integrated Wireline and Wireless Network Provides Businesses with Secure Global Access 916K fiber route miles worldwide 38 internet data centers on 4 continents Wired Ethernet from 1,646 access points AT&T’s BackboneNetworkCarriesMore than 28.9Petabytes ofData Traffic on an AverageBusiness Day MPLS-based Services in 182 Countries 3G Wireless Coverage in 145 Countries HSPA+ on ~100% of the mobile network >LTE deployment to be completed by end of 2013 >200K Wi-Fi hotspots 3M mobile VPN endpoints

Enabling the Cloud AT&T