& cplSiteName &

CenturyLink Cuts Cloud Prices, Touts Power

Carol Wilson
5/1/2014
50%
50%

Five months after it purchased Tier 3 and restructured its cloud services business, CenturyLink is hoping to call attention to its newfound power in IT services, built on a series of acquisitions including a global network with major new pricing and new offers based on support and consultative selling. (See CenturyLink Shows Cloud Is Still Critical and CenturyLink Buys Cloud Leader Tier 3.)

No longer content to be, as Andrew Higginbotham, senior vice president, cloud and technology, puts it, "the biggest company you've never heard of," CenturyLink Inc. (NYSE: CTL)'s announcement Thursday is the latest in a recent series of moves explained in this blog post from Jared Wray, CenturyLink Cloud CTO, who came to the company with its purchase of Tier 3. (See A Peek Inside CenturyLink's Cloud Expansion, CenturyLink Cloud Goes Hyper, and CenturyLink Brings Savvis Into Brand Alignment.)

CenturyLink Builds Business on Acquisitions
Qwest, Savvis, Ciber, Tier 3, and AppFog all factor into today's CenturyLink Cloud strategy.
Qwest, Savvis, Ciber, Tier 3, and AppFog all factor into today's CenturyLink Cloud strategy.

CenturyLink's new pricing changes include an immediate 60% or more decrease in cloud-based CPU, RAM, and block storage -- the commodity building blocks of cloud – and a 50% decrease in bandwidth pricing as well, scheduled for mid-June. The company is also adding tiered support bundles that can be purchased à la carte, alongside the ability to purchase technical account management services as needed to assist in migration efforts and other tasks.

These announcements follow significant expansion efforts to get CenturyLink to 56 data centers, including 16 nodes offering its public cloud product and a 21-day release cycle. They've also helped it achieve benchmarking from CloudHarmony that gives CenturyLink Cloud Hyperscale better CPU performance ratings than Amazon Web Services Inc. and Rackspace (NYSE: RAX), according to Higginbotham's blog post here.

All of this is more than bluster, says Structure Research analyst Phil Shih. "I think this is definitely a sign they are investing heavily in the infrastructure services space," he says. "What they've done with acquisitions, data center expansion, hire, everything certainly points to a significant strategic shift in how CenturyLink does business and what kinds of IT infrastructure services they serve their customers and what parts of the market they go after."

Higginbotham says CenturyLink is laser-focused on capturing a significant share of the "trillion dollars still trapped in the legacy IT model" and believes the company is poised to do that. While past acquisitions, including that of Qwest Communications, led to consolidation of most executives and operations at CenturyLink's Monroe, La., headquarters, Wray and the CenturyLink Cloud operation will continue to be based in the Seattle area, with its access to software development talent.

The new pricing strategy will let CenturyLink "put a stake in the ground that we will be in lockstep on public cloud," Higginbotham says, while adding premium performance and support capabilities as additional options for enterprises. The idea is to have the pricing for the developers and the scalability to support full enterprise deployments.

"We really wanted to make sure the market understood you have to be price competitive to be relevant," he says. "So we are clarifying our position -- as a top provider of cloud, we have to do that. We are 140 days into the creation of the CenturyLink cloud since buying Tier 3, and we are ready from a capacity standpoint to support a full enterprise platform."

CenturyLink's Consolidated Resources

On the enterprise platform side, CenturyLink is building in orchestration, automation, and management capabilities to make it easier for IT apps to migrate and be supported in the cloud.

"The enterprise has very prescriptive things they need done for production-based workloads: They need better latency, faster performance, guaranteed minimums on performance, advanced management, and more feature sets -- we are very focused on that," Wray says. A significant piece of that focus is tying in CenturyLink's global network, he adds.

Analyst Shih doesn't see CenturyLink getting into head-to-head competition with AWS, despite its new pricing, but does see the company competing more effectively against the traditional players -- Verizon Terremark , AT&T Inc. (NYSE: T), IBM Corp. (NYSE: IBM), and others -- it has faced in this market. He thinks it will deliver a more differentiated offering that will likely evolve based on continued investment in software development.

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

(4)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
5/2/2014 | 3:28:36 PM
Re: Threading a needle
Verizon is positioning itself as a different market than Amazon. Amazon is IaaS, while Verizon offers true hybrid cloud. It remains to be seen whether customers will perceive Verizon that way. 

Verizon has an accurate read on the future of the market. As markets mature, they begin to fragment. We now understand that the "software" market is not one thing -- Angry Birds doesn't compete with Oracle. The cloud market will fragment in the same way. The question is whether Verizon is ahead of the market here?

Yes, I know we were talking about CenturyLink here. But I filed a story on Verizon yesterday so I have that company on the brain. 
Carol Wilson
50%
50%
Carol Wilson,
User Rank: Blogger
5/1/2014 | 3:49:09 PM
Re: Threading a needle
In this case, CenturyLink is acknowledging that AWS, as far and away the market leader, sets the pricing bar and to compete, they need to be under that. 

I don't think the pricing strategy will cause them to be taken less seriously - the question is more likely whether the market will respond as they hope. 
Mitch Wagner
0%
100%
Mitch Wagner,
User Rank: Lightning
5/1/2014 | 3:47:18 PM
Threading a needle

Cutting prices are of course a good way to generate market share. And enterprises move to cloud to reduce spending, so that it makes sense that CenturyLink would be more attractive at a reduced price. 

However, cost custs can also backfire, and lead customers to fail to take a supplier seriously. "If it's that cheap, it can't be any good." That's a marketing needle that needs to be threaded. 

tojofay
50%
50%
tojofay,
User Rank: Light Sabre
5/1/2014 | 11:22:48 AM
" investing heavily in the infrastructure "
Large scale phontonic integrated circuits- PICS- From Infinera    

 http://www.infinera.com/pdfs/analyst_reports/Analyst_Reports-CenturyLink_Deploys_Infineras_DTN-X.pdf
Educational Resources
sponsor supplied content
Educational Resources Archive
Light Reading’s Upskill U is a FREE, interactive, online educational resource that delivers must-have education on themes that relate to the overall business transformation taking place in the communications industry.
NEXT COURSE
Wednesday, August 3, 1:00PM EDT
The Central Office Re-Architected as a Data Center
Guru Parulkar, Executive Director, Open Networking Research Center, Open Networking Lab
UPCOMING COURSE SCHEDULE
Wednesday, August 10, 1:00PM EDT
Telcos & Open Source 101
Phil Robb, Senior Technical Director, OpenDaylight
Friday, August 12, 1:00PM EDT
The Role of Open Source in NFV
Jim Fagan, Director, Cloud Practice, Telstra
Wednesday, August 17, 1:00PM EDT
Using Open Source for Data Centers and Cloud Services
Roz Roseboro, Senior Analyst, Heavy Reading
in association with:
From The Founder
Light Reading today starts a new voyage as part of a larger Enterprise.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Custom TV
Reinventing Operations for a Virtual, Software-Defined World

7|28|16   |   5:23   |   (0) comments


Heavy Reading Senior Analyst Jim Hodges speaks with Accenture's Larry Socher and Matt Anderson about what service providers must do to transform their business to get the benefits of SDN and NFV including: leveraging DevOps, introducing real-time OSS and implementing analytics.
Women in Comms Introduction Videos
Fujitsu Sales Leader Shares Lessons Learned

7|27|16   |   5:12   |   (0) comments


As Fujitsu's only female sales leader, Annie Bogue knows the importance of asking for what you want, being flexible (she's been relocated five times), keeping a meticulous calendar, 'leaning in,' working harder than everyone else around you, being aware and more.
Telecom Innovators Video Showcase
VeEX Test & Measurement Solutions

7|25|16   |   08:57   |   (0) comments


Cyrille Morelle, president and CEO of VeEX Inc., talks test and measurement with Light Reading's Steve Saunders at BCE 2016. This includes innovative products such as VeSion Cloud-Based platform for network monitoring; MTTplus Modular Test platform for Access, Business, Carrier Ethernet, Transport and Core services; and OPX-BOX+ for Fiber Optics.
LRTV Custom TV
VeEX: Live From BCE 2016

7|25|16   |   03:20   |   (0) comments


VeEX's Senior Director of Business Development, Perry Romano, explains how VeEX provides tools to help install, maintain, monitor and manage network infrastructure efficiently and effectively. The portfolio of products on display include the RXT-6000, MTTplus and TX300s.
LRTV Custom TV
Real-Time Telemetry & Analytics for Intelligent SDN Orchestration

7|25|16   |   03:09   |   (0) comments


Packet Design CEO Scott Sherwood discusses how real-time network telemetry and analytics are enabling a new breed of SDN orchestration applications.
From the Founder
The Russo Report: Driving Disruption

7|25|16   |   07:44   |   (0) comments


In the first episode of a four-part series, Light Reading Founder and CEO Steve Saunders and Calix President and CEO Carl Russo drive around town discussing the disruptive mega-changes in the communications industry and where hope lies for service providers to meet the escalating demands of the cloud.
LRTV Custom TV
NetScout: Maximizing Enterprise Cloud for Digital Transformation

7|20|16   |   04:53   |   (0) comments


Light Reading Editor Mitch Wagner talks to NetScout CMO Jim McNiel about maximizing the benefits of enterprise cloud and digital transformation while minimizing potential pitfalls with a proper monitoring and instrumentation strategy.
Women in Comms Introduction Videos
Ciena's VP Offers a Career Crash Course

7|20|16   |   4:14   |   (2) comments


How did Ciena's Vice President of Sales, Angela Finn, carve out her career path? Simple, she tells WiC. She stayed true to her company, customers and principles. She shares her advice for women on how to be authentic and credible, as well as for companies that want to make a real change to their culture and practices.
LRTV Custom TV
NFV in 2016: Part 2 – Climbing the Virtualization Maturity Curve

7|19|16   |   06:56   |   (0) comments


Many of the initial use case implementations are single-vendor and self-contained. The industry is still climbing the virtualization maturity curve, needing further clarity and stability in the NFV infrastructure (NFVi) and greater availability and choice of virtualized network functions (VNFs). Interoperability between NFVis and VNFs from different vendors ...
Telecom Innovators Video Showcase
Versa Networks' Kumar Mehta on SD-WAN Managed Services

7|19|16   |     |   (0) comments


In Silicon Valley, Steve Saunders sits down with Versa's Kumar Mehta for an interview focused on why service providers are building SD-WAN managed services, and how Versa's telco customers are innovating.
LRTV Custom TV
Juniper Networks & The Evolution of NFV

7|19|16   |   06:01   |   (0) comments


Senior Juniper Networks executives talk to Light Reading Founder & CEO Steve Saunders about NFV developments and the recent independent evaluation by test lab EANTC of Juniper's Cloud CPE solution.
LRTV Interviews
CenturyLink Goes Beyond Managed WiFi

7|19|16   |     |   (0) comments


CenturyLink's managed WiFi allows enterprises, such as retailers and resorts, to track guest WiFi usage in order to help them better communicate with customers.
Upcoming Live Events
September 13-14, 2016, The Curtis Hotel, Denver, CO
November 3, 2016, The Montcalm Marble Arch, London
November 30, 2016, The Westin Times Square, New York City
December 6-8, 2016,
May 16-17, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Infographics
Five of the Top 10 most targeted countries in Check Point Software Technologies' global Malware & Threat Index for Q1 2016 are in Africa.
Hot Topics
Verizon Sports Big Plans for Yahoo
Alan Breznick, Cable/Video Practice Leader, Light Reading, 7/26/2016
Light Reading Beyond
Steve Saunders, CEO and founder, Light Reading, 7/28/2016
Yahoo Signing Off in $4.83B Sale to Verizon
Mari Silbey, Senior Editor, Cable/Video, 7/25/2016
Ericsson Board Has Been Asleep at the Wheel – Consultant
Ray Le Maistre, Editor-in-chief, 7/25/2016
Facebook Gets Its Drone On
Ray Le Maistre, Editor-in-chief, 7/22/2016
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
There's no question that, come 2020, 5G technology will turn the world's conception of what mobile networking is on its head. Within the world of 5G development, Dr. ...
I've enjoyed interviewing many interesting people since I rejoined Light Reading, but William A. "Bill" Owens certainly takes the biscuit, as we say where I come from.
Animals with Phones
Live Digital Audio

Our world has evolved through innovation from the Industrial Revolution of the 1740s to the information age, and it is now entering the Fourth Industrial Revolution, driven by technology. Technology is driving a paradigm shift in the way digital solutions deliver a connected world, changing the way we live, communicate and provide solutions. It can have a powerful impact on how we tackle some of the world’s most pressing problems. In this radio show, Caroline Dowling, President of Communications Infrastructure & Enterprise Computing at Flex, will join Women in Comms Director Sarah Thomas to discuss the impact technology has on society and how it can be a game-changer across the globe; improving lives and creating a smarter world. Dowling, a Cork, Ireland, native and graduate of Harvard Business School's Advanced Management Program, will also discuss her experience managing an international team focused on innovation in an age of high-speed change.