AT&T to Sell Equipment to Monitor Workplaces
AT&T plans to introduce a nationwide program today that gives owners of small- and medium-size businesses some of the same tools big security companies offer for monitoring employees, customers and operations from remote locations.
Context & Ripple Effects
AT&T is taking a product built for large corporate security departments and repackaging it as a nationwide offering for small- and medium-size businesses — a market that has traditionally bought from dedicated security vendors rather than their phone company. The move lands in a busy autumn for the carrier, which within weeks has closed a deal for 700 MHz spectrum licenses from Aloha Partners covering 196 million people, launched new hardware like the $299.99 AT&T Tilt, and rolled out new international data plans for the iPhone.
That pattern matters here: AT&T is using assets it already owns — network reach and an installed base of business customers — to sell higher-margin managed services on top of connectivity, entering territory occupied by established commercial security firms.
First-order effects
- Big commercial security companies suddenly face a nationwide competitor whose distribution channel — existing business telecom relationships — costs AT&T little to work, while small-business owners gain remote monitoring of employees, customers and operations without an enterprise-scale contract.
- AT&T adds a recurring-revenue services layer on top of its core connectivity business, aimed at the small- and medium-size segment it already bills monthly.
Second-order effects
- Security equipment and software suppliers gain a new high-volume route to market if carriers begin bundling monitoring hardware with business lines, shifting pricing power toward whoever owns the customer relationship.
- Dedicated security providers are pushed toward bundling their own connectivity or communications services to defend accounts against carrier packages.
Third-order effects
- If carriers keep packaging workplace surveillance as a routine telecom add-on, employee and premises monitoring becomes standard practice for small businesses — raising privacy questions for a company whose own subscriber-contract practices drew criticism in October 2007 over a clause interpreted as allowing disconnection of customers who criticize it.
- The broader structure points toward telecom operators consolidating business-services revenue — security, monitoring, managed IT — around the pipe they already own, squeezing standalone vendors in each adjacent category.
The trend: Telecom carriers are climbing the value chain from selling connectivity to selling managed monitoring and security services to the business customers already on their networks.