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As the carrier announces three new data centers and a major expansion of five others, what's the underlying strategy?

A Peek Inside CenturyLink's Cloud Expansion

Carol Wilson
3/25/2014
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CenturyLink has continued its aggressive expansion of its cloud, collocation and managed services businesses, adding three new data centers and significantly expanding five others, in an effort to stay ahead of what the company says is growing demand. (See CenturyLink Expands Global Data Centers.)

Two of the three new data centers -- in Minneapolis and Phoenix -- reflect the CenturyLink Inc. (NYSE: CTL) strategy of more closely tying its CenturyLink Cloud offers to its network services businesses, and will build on the sales relationships CenturyLink's local service operations already have, says Drew Leonard, VP of collocation product management. (See CenturyLink Cloud Goes Hyper.)

"We have an existing sales force hungry to sell our collocation products," Leonard says. "These are traditional CenturyLink markets that have large numbers of sales teams in the market, and relationships with a large number of enterprises."

The company is also touting another differentiator, however, in its Tier 3 certification status, when it goes into established markets such as Minneapolis and Phoenix, says David Meredith, senior VP and general manager.

Data center certification is done in four tiers, with Tier 3 being the second highest. A Tier 3 data center guarantees 99.982% availability, including redundant capacity components, dual-powered equipment and multiple uplinks. CenturyLink is going beyond that to guarantee 100% uptime.

"We are Tier 3 certified -- we are the first -- and we will have 1.2 megawatts of capacity day one that will be on-net for CenturyLink and connected to all of our other data centers," Leonard says. "We will have metro connectivity that will reach out to legacy facilities and other key data center providers in that metro, which is a level of service above and beyond what others are in that market."

The third new data center, in the Toronto market, is being driven by existing CenturyLink customers and appearing in a Canadian market where Leonard says CenturyLink has been finding success.

Among the facilities being expanded are those at Weehawken, N.J., a key financial services hub set up outside the New York City footprint in the post-911 era, and at Chicago, where the Chicago Board of Exchange is a key customer planning to take advantage of both new sites.

Other expansion sites include: Sterling, Va., part of the data hub in the northern Virginia area; Irvine, Calif.; and Reading, UK, where CenturyLink has substantial managed services business.

"In markets such as Weehawken, Sterling, Chicago, Toronto, Reading -- these are all high traction markets for us, and our strategy there is not to go dark, it is to keep expanding to stay ahead of demand to ensure we continue to have sellable capacity on site." Leonard says. "We are getting interest from all different types of customer, large deals and small deals -- we need to be nimble and react ahead of that demand."

The other two points of differentiation for CenturyLink include the range of services on offer, and its people, according to Leonard.

"We are the second largest retail colo provider in the world and we are a significant services and cloud provider, so when a customer goes with us... they may have been doing everything themselves in colo, and now they want to migrate and do more with managed services or in the cloud," he says. "We can provide these hybrid solutions, some managed, some cloud, whereas many of our competitors are colo only."

Even in the world of virtualization where the size and scope of the data center matters, expertise is still an important commodity, he adds.

"A lot of people argue that a data center is a data center, but that is not really true," he says. "What we offer is our people, who operate, manage and maintain on a day-in and day-out basis, and that is our history and legacy, delivering reliable colo services to our customers. We have 55 data centers now and some are brand new, but some are 17 years old and we are still offering 100% uptime, based on our experience."

— Carol Wilson, Editor-at-Large, Light Reading

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Mitch Wagner
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Mitch Wagner,
User Rank: Lightning
3/25/2014 | 5:11:04 PM
Differentiator
Service providers need to work hard to differentiate themselves. Uptime, strong local ties, and expertise are significant ways to stand apart from the other guys.
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