AT&T, Microsoft Ink Pact for New Small Business Offering

Business Solutions Soon to Be Largest Unit at Telecom

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AT&T sells hundreds of millions of phone plans and may soon sell millions of TV connections, with DirecTV in its fold, but its CEO has said the largest business unit this year will be its enterprise arm. Business Solutions, which charges for enterprise services like cloud storage and security, as well as products for the Internet of Things, netted $2.6 billion in revenue last quarter, a 14.3% growth.

On Monday, at Mobile World Congress, the division announced a new collaboration with Microsoft to produce a suite of mobile Office products and wireless plans geared for small and medium-sized businesses. "No one has put all the pieces together," said Steve McGaw, CMO, AT&T Business Solutions. With some of its services, the partnership is pitted against the recent enterprise offering from IBM and Apple.

The new offering from AT&T and Microsoft will charge businesses "somewhere in the $100 range" for the offering, Mr. McGaw said, with a fixed cost per additional employee. While the enterprise unit continues to devote marketing dollars to print, TV and search, the marketing chief said he is increasingly turning to social media.

Ad Age caught up with Mr. McGaw in Barcelona. In 2013, he was named CMO after 13 years as senior VP-corporate strategy for the carrier.

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