AT&T Dives Into Cloud Storage With EMC

Updated from 12 p.m. EDT

Telecom giant AT&T(T Quote) is the latest company to dive into cloud computing now that it's teaming up with EMC(EMC Quote) to launch a Web-based storage service.

The two companies will jointly develop and market the service, which is aimed at businesses drowning in data. Cloud computing, regarded as one of the hottest technologies at the moment, lets users store and access their data via the Internet. By requiring that customers pay only for the storage capacity they need, AT&T is touting Synaptic Storage as a Service as a way for firms to better manage their IT budgets.

Typical data types stored on the service could include static Web content, file data and medical images, according to AT&T.

Run from AT&T's U.S. data centers, the service will be available sometime in the third quarter. AT&T aims to add some of its overseas data centers to the service as demand increases.

With Apple(AAPL Quote) rumored to be extending its iPhone partnerships beyond AT&T, the telecom giant may be looking to open up new revenue streams. AT&T's exclusivity deal for the iPhone ends in the second quarter of 2010 and the company is facing stiff competition from its rivalVerizon(VZ Quote).

AT&T's move could be well-timed, particularly given that users have been wrestling with a spending slowdown.

Web-based software companies such as Salesforce.com(CRM Quote), for example, have proved the effectiveness of the cloud model, particularly in a down economy, and AT&T is now looking to get in on this act.

"The demand for data storage continues to grow at a staggering rate, driven by companies' need for 24x7 access to business-critical data," said Roman Pacewicz, senior vice president of strategy and application services at AT&T, in a statement.