Enterprises buy a variety of computing services from public to private along with VPS, hosting and everything in between. "It's easier for enterprises to develop, test, operate and migrate workloads across hybrid architectures when the CSP's public and private cloud code base is the same, or at least virtualized and functioning identically." However, they cannot procure this variety from Amazon or Google. They would to go to the likes of IBM, Microsoft and Oracle.
"Consumer tablet demand continues to shrink. Apple is the only manufacturer seeing an improvement in buying." Not good news for the cellcos.
"Future data centers will include technologies such as advanced data center management software, distributed resiliency, prefabricated modular (PFM) components and dexterous robots." Meanwhile Telcos are exiting the data center business (WIND, C-Link, VZ).
PE firms own many of the data center companies, including Peak 10 which acquired Via West from Shaw today for $1.7 Billion. In addition, Dupont Fabros merged with Digital Realty. That is along of transactions and consolidation in the space.
Upgrade those pipes!
Cisco's report on Internet traffic growth is out with many pretty graphs. "Globally, Internet traffic will grow 3.2-fold from 2016 to 2021, a compound annual growth rate of 26%. Globally, Internet traffic will reach 235.7 Exabytes per month in 2021, up from 73.1 Exabytes per month in 2016. Global Internet traffic will be 7.7 Exabytes per day in 2021, up from 2.4 Exabytes per day in 2016."
What is an Exabyte? "Global Internet traffic in 2021 will be equivalent to 707 billion DVDs per year, 59 billion DVDs per month, or 81 million DVDs per hour. In 2021, the gigabyte equivalent of all movies ever made will cross the Internet every 1 minutes."
According to Akamai, "Slow IPv6 adoption is a conundrum in light of IPv4 address exhaustion." Global Average Internet Connection Speed = 7.2 Mbps. Yet "U.S. speeds averaged 18.7 megabits per second compared with 28.6 Mbps for global leader South Korea." Most of that is cable modem download speeds since MSOs have the lion's share of broadband customers in the US. DSL is dragging us down.
The Duopoly is looking to strip Net Neutrality rules, claiming they stifled growth. OOPS! "Broadband speeds have soared under net neutrality rules, cable lobby says."
"Fiber is basically the nervous system of the networks of the future," Malady said and Verizon is making big investments in it." Good insight.
]]>Last year, Tech Data negotiated to acquire Avnet Technology Solutions for $2.6 billion. Avnet TS brings in $9.65 Billion in revenue and will increase Tech Data's share of data center revenue from just 29 percent to 45 percent. This move also gives Tech Data a presence in Asia-Pacific.
Tech Data competes with Ingram, ARROW, SYNNEX, Westcon-Comstor and to a lesser extent Jenne, ScanSource and CDW.
"Westcon has struggled in recent quarters, with revenue falling 10 percent to $2.26 billion and earnings before interest, taxation, depreciation and amortization (EBITDA) falling 18 percent to $42.9 million," according to reports. This is not unusual in the VAD space. ScanSource and other VADs have been facing declining revenue and margins due to the turbulence of the IT space.
"SYNNEX has reached an agreement to buy the North American and Latin American Westcon-Comstor business from Datatec," according to Seeking Alpha. The financials of the deal are complicated and range between $715 and $915 million depending on earn out.
Most analysts have commented that this is a as good a fit (Westcon+Synnex) as TD-AVnetTS. It fills in holes both in line cards as well as geography.
Consolidation is happening at every level of the IT/tech/telecom sector. Less choice for the partner and customer is one result. The other is usually a disorganized organization.
The other blockbuster deal is in the Data Center space. Digital Realty Trust (which acquired TELX) is now buying data center wholesaler DuPont Fabros for $7.6 billion. "DuPont Fabros operates 12 data centers in three major U.S. markets, including Silicon Valley and Northern Virginia, while Digital Realty operates 145 data centers globally." Dupont Fabros is the data center landlord to Yahoo, Facebook, Apple and Microsoft. Those are nice tenants to have if you are DRT.
This is more than either CenturyLink or Verizon received for selling their data center business. C-Link sold 57 data centers to a group of PE firms for $2.15 billion and a piece of the new firm (now known as Cyxtera Technologies). Cyxtera is a combo of Savvis and Qwest data centers that C-Link paid much more than the $2.5B C-Link paid just for Savvis. (Buy high sell low!) VZ sold its 24 data centers to Equinix for $3.6 billion, which it bought from Terremark for $1.4B.
Dany Bouchedid, CEO of COLOTRAQ, the data center master agency, said, "This definitely establishes DLR in the wholesale colocation space more than ever. Dupont's data centers are enormous with next gen gear and mechanicals. In addition, Dupont owns their PPE (property plant and equipment) with some of their sites having a decent amount of land. Their PUEs are industry leading and their cooling and UPS technologies are ahead of their time. DLR will be a great platform for them to further market their capabilities."
Data Center is still a hot sector with PE firms swooping in as well as consolidation by the REITs.
]]>This year's Data Center Industry Survey from Uptime Institute seems to indicate that "It is moving slower than I'd have thought." That persuasion isn't enough to make the transition happen faster.
The legacy premise PBX sales have slowed down but have not been surpassed by cloud PBX yet [source and HERE].
No one is crushing it despite more vendors entering the cloud space every day. Well, actually, Amazon is crushing it with S3 and AWS.
"Many people don't seem to be willing to throw out their legacy systems but are still investing in diesel generators and backup power," says Matt Stansberry, Uptime Institute's Senior Director. Or they just can't. I have seen way too many businesses - especially telcos and cablecos - relying on spreadsheets and faxes!!!
"One statistic thrown up by the 2017 survey has changed very little over the last four years:
"It is probably because it's not easy to re-architect their legacy applications for a cloud environment." That is true. And not all software can port off AS400s and other legacy server boxes. In fact, COBOL Programmers are STILL in demand!
The providers only hear about clients that want to migrate or are thinking about cloud. Partners see businesses every day that will not be changing anything.
It appears we will be dragging businesses to the cloud kicking and screaming, but slowly.
Heck look how many businesses are still on TDM (POTS) and use faxes.
]]>It isn't a sprint. It isn't about just growth. It is about steady growth and customer experience. Also, product-market/fit.
On LinkedIn this morning, there were at least 3 posts from channel managers closing business for their partners. If the channel managers are closing business, that is a better use of time than recruiting. And maybe a trainer is needed to teach sales skills and product to both channel managers and partners to keep those skills and knowledge fresh.
The other topic on LinkedIn this morning: SD-WAN. All generic info being shared under the umbrella of the vendors. This is not a good start to content marketing. This is not a good start to branding and positioning.
Seth Godin is giving a 100 day online marketing seminar. Take it!!!!
CenturyLink data centers were acquired by a group of private equity firms (Medina Capital and BC Partners) for $2.8B. This group will combine the 57 data centers with four cyber-security and data analytics portfolio companies to form Cyxtera. (Who picked that name?) The CEO of Medina Capital will be running the new firm and he used to be CEO of Terremark.
Verizon closed on the sales of their data centers (formerly Terremark) to Equinix this week. Windstream sold theirs to Tierpoint a while ago.
The divestiture of data centers by Windstream, Verizon and Centurylink does not represent a bad position for data centers. It means that the telcos didn't have the skills to leverage DCIM. The data center market is hot and growing. Inter-connection, peering, colocation and cloud computing infrastructure (IAAS, PAAS, VM, Hosting) are all in demand right now. Data center construction is growing by 8% per year.
Polycom was acquired by a PE firm. Many top execs have left. One went to Star2Star. This week the CMO went to Intermedia.Net.
]]>Cloud
Cloud adoption remains strong, with 60% of respondents indicating either Initial Implementation (31%) or Broad Implementation (29%) of production applications. Just over a quarter of the respondents are either Running Trials/Pilot Projects (15%) or Discovery and Evaluation (12%).
Respondents were asked to pick their top cloud computing related projects over the next 12 months and Cloud Security (37%) topped the list followed by SaaS for Application Modernization/Migration (33%) and Technology/Infrastructure Refresh (32%) was a close third.
"The [451] survey also asked if organizations are using professional services for their cloud enablement and it turns out that they are almost evenly split, with 41% indicating that they do use professional services - while the other 59% said they do not.
451 Research reports from HERE, HERE and HERE.
IOT
Compelling Business Need (52%) was the top driver for increases in IoT spending while another 48% cited Improved Daily Operational Efficiencies second, and Respond Faster to Customer Needs (43%) was third.
Currently for the vast majority of respondents, 87% said they did not have a dedicated budget for IoT, but rather it is part of their overall IT budget. In contrast, only 13% said they have a dedicated budget for IoT.
IoT presents new deployment challenges, so respondents were asked about their key IoT-related technology priorities. IoT Security (47%) tops the list, followed by Big Data Analytics for IoT (34%) and IoT Infrastructure Equipment (31%).
IT Pain Points
For those respondents that are adding dedicated staff in 2017, the top skillset they are looking for is Data/Analytics (70%). Security (55%) and Cloud Computing (55%) are tied for second and Network Edge/Perimeter (45%) is third.
According to 48% of respondents, Cost/Budget is the chief IT pain point, followed closely by Responding Effectively to Changing Business (45%) and Security Issues/Concerns (41%).
Data Center Priorities and Pain Points
Respondents were asked how they would address a shortage of floor space or power capacity within their data centers. An external fix, to Utilize Off-Premises Public Cloud Providers (37%) topped the list, followed by two internal initiatives: Consolidate IT Infrastructure to Accommodate Power and/or Space Availability (34%) and Expand an Existing Data Center (26%).
Respondents were asked about their highest-priority projects for data centers, and Improving Existing IT Asset Utilization (48%, up 4-pts) remains at the top of the list. Data Center Consolidation (28%, up 2-pts) is a second. Upgrading/Retrofitting an Existing Facility (20%, down 3-pts)is in third place.
]]>In the business market, Alexa is integrated with Skyswitch, a Netsapiens softswitch operator.
Better Late than Never: Amazon's Unified Communications Starts with 'Chime' by Edgewater Networks.
Interesting look at Hosted PBX seat pricing at CP online.
Seth Godin asks, "Learn something new and difficult and valuable." Why? "There are people who can cut corners better than you, work more hours than you and certainly work cheaper than you. But what would happen if you became the person who was smarter, better at solving problems and cared the most?"
47% of jobs are at risk for being automated in the next 20 years (faster probably). The only way to stay relevant is "Solve interesting problems"; Consultatively Sell Solutions; and utilize Creative Thinking.
FTTH Council has changed their name to the Fiber Broadband Association.
Windstream is making big waves as it fights against industry consolidation that may make it less relevant. WIND complained about Level3 not paying its bills. Now they are worried that the mergers will strand small business during the TDM-to-IP transition. This is all gamesmanship to get concessions favorable to themselves.
BTW, no one wants to buy Cogent.
Stonepeak Infrastructure Partners has closed a deal to become majority owner of the data center and interconnection company, COLOGIX, which runs 24 data centers in North America. So the data center market is still hot!
]]>Avaya sold its networking business to Extreme Networks for a paltry $100M (It is about $200M in revenue). That $100M does not make a dent in the billions in debt that Avaya is trying to scrape off in bankruptcy.
HPE is acquiring Nimble Storage for $1B.
LUMOS is being taken private by EQT Investment Startegy for almost a billion dollars. This comes following LUMOS buying three data center from DC74 and Clarity Communications, a fiber operator in NC.
FirstLight Fiber's main PE owner, Oak Hill Capital Partners, has acquired Finger Lakes Technology Group in upstate NY to fill in its fiber route. The data centers, Cisco business and fiber network all go with FLTG to FLF. FirstLight recently announced similar transactions with Oxford Networks and Sovernet Communications.
Another RLEC was picked off by private money: "Hargray Communications has agreed to be sold to an investment group led by the Tom Pritzker Family Business Interests. Redwood Capital Investments and Stephens Capital Partners are also investors.
In other news, Amazon AWS launched some new Cloud-Based tools to help enterprises manage their call centers. They already built the tools for internal management of their own call centers, so now they are just leveraging more internal IT/tech for revenue.
8x8 is funny. They hire a banker and put up the for sale sign; then buy something. 8x8 acquired Sameroom, an inter-connection platform for various chat apps including Slack and Skype. ComputerWorld has a good article on the pivot of Sameroom and the 30 year history of 8x8.
Worth noting: "Today 8x8 introduced the world's first Communications Cloud, which combines unified communications, team collaboration inter-operability, contact center, and analytics in a single, open and real-time platform. The company also announced a number of new business application integrations, aimed at enhancing business workflows by making real-time communications, collaboration capabilities and intelligence available for third-party cloud applications, all customizable via an Open Cloud approach to fit individual enterprise needs." Note the words inter-op, analytics and integration. These will be the key to real UCaaS or UC&C or WCC (or whatever we call it next). These are the factors the separate the sale of UCaaS from Hosted VoIP. One is valuable, bringing productivity and business change. Hosted VoIP is just dial-tone replacement.
Today is International Women's Day! I am recognizing it by re-posting my Women in Tech prezo from ITEXPO and an article on gender diversity from Fred Wilson.
]]>Level3 CEO and President Jeff Storey is poised to get a huge prize for selling the company off. Isn't that great? For him, yes. He gets a "$1.2 million bonus after the Broomfield-based telecom's $24 billion acquisition by CenturyLink Inc. closes. In addition to the $1.2 million bonus payout, Storey is slated to receive an accelerated stock grant worth $3 million after the transaction with Monroe, Louisiana-based CenturyLink." Agents, meanwhile, get to wonder what happens post merger. How messed up will the networks be? How convoluted will ordering and quoting be?
After both Transbeam and NITEL announced that they are adding SD-WAN, MegaPath launches SD-WAN aimed at the SMB. That is the same place that SimpleWAN plays. SimpleWAN is up for the 2017 Venture Madness business competition in Arizona.
Velocloud raised a series D round for $35M. Many startups will look at this (and the SNAP IPO yesterday at $26B) and think that doing a startup is like buying a lottery ticket. In a sense it is, but building a business -- even to sell it quick -- still requires hard work, execution of an idea AND a plan, and sales. Velocloud is signing up partner providers faster than a PR firm can add them, but that doesn't result in meaningful sales for a long while!
You can learn from failure. #startup stories.
In the heat of SD-WAN, I wonder if people realize how shaky Cisco (and other router manufacturers like Juniper and ADTRAN) are? The SD-WAN white box is not a Cisco. It is an OEM that can be a router, a firewall, an access point, a Cradlepoint, darn near anything because we just push the software update to the box and either install the card/WIC or activate the card/WIC. The white box is replacing the traditional gear. Cisco and ADTRAN are in the box business. So are VARs. What happens next? Pay close attention - it will be a lot like the PBX Business, but decline a little faster.
Satellite ISPs OneWeb and Intelsat are merging. Consolidation in every sector of the ISP market - MSO, ILEC and now sateliite.
Verizon wins top honors from Frost & Sullivan for capturing more than a quarter of the North American VoIP and SIP Trunking Services Market.
CenturyLink makes changes to its Alliances and Strategic Partnerships programs.
In the EarthLink-Windstream merger, the ELNK channel chief, Olen Scott. emerges as the new channel head. "Jason Dishon, Windstream's former channel chief, has left the company to pursue other opportunities." It is a constant state of musical chairs in telecom.
]]>
Hwver, today Equinix bought 29 data centers in North and South America from Verizon for $3.6B!
Equinix continues its expansion in major cities ignoring the Tier 2 and Tier 3 cities that other data center companies are moving toward. That expansion to the edge "is an industry wide shift in focus to edge computing and having these peripheral data centers in tier 2 markets might very well be a more comprehensive strategy to having a footprint where your clients need to be. In the Future, clients will look to the edge, meaning closer to their end users and subscribers as they expand out from their primary markets," remarked Dany Bouchedid, CEO of the data center master agency COLOTRAQ.
Bouchedid continued, "As an industry we need to collectively adapt and do away with old ways of thinking even if we are still taking about traditional data centers. This reminds me of the wireless cell site deployment era. The initial deployments were always tier 1 markets yet once that reached a saturation point, the carriers had to move to where more subscribers resided. So they began to expand into tier 2 and 3 markets. What we are seeing in the data center industry so far is purely demand driven."
It is also profit driven. Data center companies are real estate companies. It is why a few of them are structured as real estate investment trusts (REITs). It is why investment dollars flow into a third, fourth and even a sixth data center in an NFL city like Atlanta, Chicago or even Phoenix.
CenturyLink just sold their data center business for $2.1B to a coalition of PE firms headed by the former CEO of Terremark. C-Link was getting enough out of their data center business AND they needed cash for their Level3 bid.
Meanwhile agents are left wondering about commissions. Will the new company continue to pay the commissions? Or will that fall to CenturyLink? Who is billing the client now? Which company will the customer renew with?
Tierpoint rolled up Windstream and other data centers. They are held by a PE firm. This is a risk for channel partners because of the potential for sale. In other words, will your well written agent agreement be enough to continue to see commissions after a sale like CenturyLink's or even Windstream's?
One executive at a master agency noted, "The battle between Digital Realty Trust and Equinix continues! IO, Cologix, and Interxion are next."
]]>Jeff Ponts of Datatel; Emmett Tydings of AB&T Telecom; and Chris Palermo of GCN joined the podcast this week to talk about the M&A in the industry and what partners can do to mitigate risk in 2017.
It has been a turbulent year with a lot of mergers and acquisitions. It makes people anxious.
Jon Arnold is a fellow blogger who recently saw Guy Kawasaki keynote Nextiva's event. The one thing lacking in telecom is Innovation. As partners, WE need to innovate to the tune of adding new skills, being creative, thinking through problems and cross-vendor solutions.
Give this podcast a listen - and leave your comments.
If you can't see the flash mp3 player, you can listen on SoundCloud HERE. Or you can download the mp3 HERE.
]]>AT&T with its DirecTV buy and its grab for TW is basically following Comcast's playbook. Comcast bought NBCU, is becoming an MVNO (cellular reseller) and has a $6B Comcast Business division that is going to chase enterprise (much to the dismay of CenturyLink and Windstream).
Verizon is busy selling off wireline assets and buying up as much spectrum as its AMEX card will allow in a heavy bet that 5G and IOT will solve all of their revenue and cable issues. In a move bizarre move, VZ bought up AOL and Yahoo as content plays. This playbook is solely Lowell C. McAdam's.
Frontier, Fairpoint, CenturyLink and Windstream are RLECs looking to get out from under a heavy debt burden without cellular assets and without a content play. Each has its own playbook.
Windstream buying EarthLink almost makes sense especially at a $1.1 Billion all stock deal. (This move doesn't hurt the channel since both providers were pro-channel.)
CenturyLink buying Level3 is not only surprising; it is disheartening. Level3 has its problems certainly. Yet its management understood the business it was in and what it took to win business. For a partner, that is a plus.
To fuel that $34B deal (total value of stock, debt, etc), CenturyLink is selling its data center business (Qwest and Savvis) for $2.1B to a coalition of PE firms headed by the former CEO of Terremark. This coalition is also buying 4 cyber-security firms to build a global cyber security business. Partners are curious if they will still get paid on deals already sold. And what the future holds here.
FPL getting acquired by Crown Castle also makes partners worry about commissions, since CC doesn't have a channel and doesn't retail its fiber.
The CLEC industry is practically gone now. After nearly one trillion in investment money dating back to 1996 or so, most of the CLECs we have come to know and sell are pretty much gone.
What does that leave the Channel? IOT, Cloud, UCaaS, SD-WAN, security - basically selling managed services. Network is going to be tough to sell and make a living on as prices continue to erode. SD-WAN for the win!!!
Network is easy to sell and there is demand for it. You really can't say that for any other product in the portfolio.
Data center is still alive and well. Long live colocation!
]]>CenturyLink just sold off its data center business that was a combo of Qwest Cyber Centers and SAVVIS to a group of PE firms for $2.15B in cash and C-Link keeps a minority stake worth $150M in the new company. CL bought Savvis for $2.5B in 2011. Buy High; Sell Low. Bell-Head Mentality.
The PE coalition that bought the data centers also grabbed 4 cyber-security firms in order to announce this global security co, to be run by Manny Medina, former CEO of Terremark Worldwide.
Wired's headline says it best: The World's Telecoms Are Under Threat From All Sides.
Broadband, cellular and voice are all flat or declining markets.
IAAS and PAAS are ruled by Amazon, IBM and Google. Microsoft only got into the game recently and is doing better than all the telco's combined.
PE firms are buying up data centers as the world adjust to cloud computing, an app market and streaming TV and radio.
DDoS attacks are happening too often. So are Hacks. There are not enough fingers to fill all the holes in this dyke.
UCaaS is ruled by 8x8, Vonage Business, RingCentral, Fuze and a bunch of other providers that are not a telco. The PBX market may be shrinking but not fast enough for the other Hosted VoIP players. Cisco and Microsoft have chunks of the enterprise UCaaS business that the telcos don't.
Comcast Business is at $6B in annual revenue, which makes it a bigger CLEC than almost all that are left. WIND does $5B. EarthLink less than $1B. Birch and TelePacific are private. Level3 does $8B. CenturyLink does $17B (much of it ILEC revenue). Zayo is $2B.
Apps like Messenger, WhatsApp, Skype and Slack are replacing voice and SMS and even email. It is a topsy-turvy world. What's a telco to do? Well, merge! Get bigger because bigger solves nothing, but it makes money for top execs in the C-Suite and the Board room and on Wall Street.
Our economy spins on e-commerce and the Internet. When the companies that provide that Internet are too clunky to do it properly, what happens to our economy?
We went from a five nines voice network of reliability to cell phones and VoIP that quite frankly can't be more than three nines. Have you noticed the number of outages lately by telcos and cablecos?
There is a lot going on. There are many areas of opportunity, but the fall back from these guys is "more of the same", "do what I know" and "one more quarter!". None of these transactions is good for the industry, the economy or the consumers. They are stop gap, short term money movers. We are going to wake up shortly and realize that it is 1970 all over again. It makes the NSA job easier when there are few players, but what about the customers?
In the data center space, one master agency contacted me after the C-Link announcement to tell me that the folks at CenturyLink have no details about the sale. How can that be when Monroe has been trying to sell the DC division all year? Great planning, guys!
Whose customer is it? Will the agent still get paid? Will the customer see a price increase? Who is the billing entity? Who will the customer be paying? These are good questions that bothered some TELX customers when Digital Realty took over.
I keep seeing executives at master agencies say these deals are good. Do they say that in print because they have to?
Don't forget that you can leave a public comment with the FCC on any of these mergers. You can voice your opinion here. You will need a docket number but you can google it after the filings are in the system.
]]>In 2008, C-Link bought Embarq, formerly Sprint/United.in $11.6B deal including assumed debt. In 2010, C-Link bought Qwest which included RBOC assets that flew the US West banner. "The valuation of CenturyLink's purchase was $22.4 billion, including the assumption of $11.8 billion of outstanding debt held by Qwest."
In 2011, CenturyLink begins to stray from grabbing fiber and POTS lines in favor of the data center business it acquired with Qwest. Much to the chagrin of the agent channel, Savvis was scooped up for $3.2B including debt. This started a series of acquisitions to beef up a cloud business that for all intents and purposes C-Link is mired in for no reason.
The ITO Business Division of Ciber (managed services), AppFrog (PAAS), Tier3 (IAAS), Cognilytics (analytics), DataGardens (DRaaS), Orchestrate (DBaaS), netAura LLC (security services) and ElasticBox (VPS) - all scooped up in the last 3 years to make a soup out of a cloud division that it is still trying to sell. The rumor today is that Savvis will be spun off. No word if that will be just data center or both data center and cloud. And that makes even less sense since Level3 actually knows how to sell colocation - unlike practically anyone in Monroe.
I understand that being rural and watching your CAF and USF subsidies slowly decrease makes you yearn for fatter and happier days. And when you look at Level3's $10B in NOLs, you start to think like Carl Icahn. However, have you seen what Icahn did to XO???? Have you seen what C-Link did to Qwest and Savvis??? That husk will next be Level3.
With debt this deal will be worth about $34B to get combined revenues to $25B.
Not a single merger in telecom in the last fifteen years resulted in anything good. Not one.
The integrations rarely go as planned. These two companies probably have 26 or more separate and different software systems in the BSS/OSS. These will NEVER be integrated. Orders, status and asset availability will be a nightmare. I know. I know. You think I am a pessimist. But truly this will suck especially for the channel.
Any agent that says this is good is either (a) looking for press or (b) is delusional.
There is now less choice. When VZ takes over XO, except for Zayo, who is left that isn't a LEC or cableco? What happened to the CLEC industry? Totally collapsed as its owners cashed out. Everyone got bigger and no one got better. One by one they have fallen.
It is why Cable is winning the broadband game. (Cable is single minded.) It is why businesses buy cloud services from OTT. (Bell-head mentality precludes anything but network and voice.)
This is the LEC problem: lack of focus; deficient long term strategy; and a missing willingness to win the customer. It's all about the creation of value without actually creating any value.
Since the Board will almost stay intact and the CEO remains, what new gen strategy or thinking do you think will occur with the combined entity? I get why the L3 CFO is staying: someone has to keep that debt at bay and play with the NOLs so that the stock doesn't crash when revenues start to slide.
I won't even get into the culture differences between the 2 companies. L3 and TWT had only slightly different cultures but most of the TWT people exited. This is a good payday for L3 CEO but he will go down as the guy who killed a good idea. The blood of thousands of employees and agents are on Story's head.
Hopefully, someone else will make a BID for Level3 as a white knight - Comcast, Zayo, or a PE firm*.
**Although STT owns about 13% of Level3, I don't see a PE firm wanting the company, except to do to it what Icahn did to XO. L3 doesn't throw off enough cash.
According to CenturyLink press release, the deal, which is expected to close by the end of the 3Q 2017, results in:
Level3 has a bad quarter financially and the C-Suite says, "Don't look here! Look over there!"
Also, bankers! Besides the C-Suite, Bankers are the only ones making money on these deals. So yeah that want more M&A - as overall M&A activity in 2016 is down. Truthfully, bankers have ruined telecom with all this M&A.
Yesterday I was at a TelAdvocate event in Tampa. No agent there thought it was a good idea. Emails from other agents are basically panic. We just got done with integration. Please not another one!!!
What do they get with this merger? Two very opposite cultures. One is mainly an RLEC. One is mainly a wholesaler. Not does that match up?
Level3 fiber is everywhere that Qwest is with its Genuity, Gobal Crossing and own long haul fiber. L3 could probably do a better job selling colocation and data center that C-Link.
The big picture is that you would have a larger telco with massive debt -- and declining revenue. Since CenturyLink has debt of around $20B with about $18B in revenue and Level 3 has debt of about $10B with $8B in annual revenue, the combined entity would have $26B in revenue and $30B in debt. Plus years of integration work, layoffs, confusion, and eventually lost revenue and a lousy organization.
As brokers of telecom, we want choice in the marketplace. This doesn't achieve that.
I am hoping this is just a banker balloon. Both stocks moved up, so maybe someone was just doing some day trading.
]]>"Today's IT industry is dealing with data explosion. Therefore, companies need a data management system to manage the huge amount of generated data. Data centers are already under tremendous expansion mode in terms of storage and computing to accommodate the growing volumes of data and run computation on top of it," writes CIO Review. Data retention also factors into space. IOT will increase data stored and analyzed and retained. Private cloud, hybrid cloud and computing infrastructure have to be housed somewhere.
Space isn't really the limiting factor. Power is. Cooling is also becoming a limiting factor. Cooling to some degree affects the power. The US had not built a new power plant since 1996 -- until Wats Bar 2 came online in Tennessee this year.
Solar farms are starting to pop up. And there has been activity in wind farms. Amazon is turning up a wind farm in Texas. "Iron Mountain, a global storage and information management service firm, has agreed to purchase up to 100,000 MWh of power from the in-development Amazon Wind Farm Texas."
Google is working on a zero waste data center. " it takes a lot of power and resources to do all that data churn [from Google search, Docs, Drive, Music, YouTube, etc], which is potentially quite wasteful. Thankfully, however, the search giant has committed to a new initiative called Zero Waste to Landfills so that all of the waste from those data centers will be reused or diverted to a more sustainable route."
That is just the moves to make running data centers cheaper. But that means that data centers are going to be around a long time -- and there will be more of them.
Facebook's data center in Sweden made a social splash via a virtual tour. These giants - FB, GOOG, Amazon - are getting creative with data center builds, designs and usage.
The amount of M&A activity is high (compared to previous years and dollar values of the deals.) One example is Windstream selling its data center business to Tierpoint for a big profit. I mentioned some of this back in January. Since then, CenturyLink is taking bids for its data center business that it put together with Qwest Cyber Centers and Savvis.
Verizon is near a deal to sell its Terremark division, according to reports. That $3B will help VZ buy some more spectrum -- or just to pay off the debt on the AOL purchase.
Private equity firm Silver Lake Partners is exploring a sale of Vantage Data Centers, looking for a billion dollars.
ViaWest is expanding in Denver.
There are federal mandates for data center optimization that must be met by 2018.
Data centers play a huge part in IT - whether the company has public cloud or private cloud or a colo. The hybrid nature of IT infrastructure for the enterprise lends itself to a continued reliance on data centers in the US.
]]>