Zayo's IaaS Enhances 'Triple Threat' Status
Zayo Group historically has been known more for its impressive appetite for acquisitions than anything else, but the company's latest series of deals are helping it craft a different image -- that of a "triple threat" service provider, in the words of one Zayo executive.
In Zayo Group Inc. (NYSE: ZAYO)'s case, the "triple threat" also could be called "the three C's" -- connectivity, colocation and cloud. Jennifer Curry, vice president of Zayo Cloud, says the company's new infrastructure-as-a-service (IaaS) offering, announced this week, will go a long way toward helping Zayo stake a claim on the cloud, as well as demonstrate how the company is able to integrate its frequent acquisitions into a single, cohesive family of services. (See Zayo Intros Cloud IaaS.)
Zayo is not completely new to the cloud sector. The IaaS launch is something of a relaunch of services Zayo already offered along with services it absorbed with its acquisition of regional cloud and data center player Latisys earlier this year. (See Zayo Splashes $675M on Latisys Data Centers and Zayo Group Acquires AtlantaNAP Data Center.)
Curry, who came to Zayo as part of that acquisition, says, "Zayo had some pockets of cloud services where it also had colocation. Latisys had a mature, but actively growing cloud services platform and AtlantaNAP had colocation and cloud services strategic to healthcare. Zayo absorbed all this and made it more of single platform."
Though integrating assets and services from disparate companies can often present challenges for acquirers, Zayo has gotten a lot of practice -- to the tune of more than $4 billion spent on acquisitions over the last several years. "Through making all these deals, Zayo has gotten really good at integrating quickly," Curry says. (See How Zayo Spent $3.7B on Acquisitions.)
The result, in this case, is an IaaS offerings that supports the full array of private, public and hybrid cloud demands of Zayo customers at a time when all three segments are seeing growth as enterprises continue to move workloads off premises and into the cloud.
"People want to focus their internal resources on things other than infrastructure, so they start by looking at hosting or the cloud space, and what they'll find now is that Zayo has all three -- connectivity, colocation and cloud," Curry says.
Zayo isn't ignoring one "C" for the sake of another either. The company recently upgraded its domestic and international Ethernet backbones to 100G, and it continues to pursue acquisitions that augment its physical network reach and connectivity. Prior to the Latisys deal, for example, Zayo bought London-based Geo Networks in 2014. (See Zayo Buys UK Fiber Network Operator.)
Zayo's attempts to diversify its services are meeting with the approval of sell-side analyst and Wells Fargo Managing Director Jennifer Fritzsche, who writes in a research note this week that the company should be better positioned competitively by its efforts to build up its product offerings. Zayo already has shown some ability to leverage its M&A moves into greater revenue, as it posted a 21% revenue increase for its fiscal third quarter 2015. (See Zayo Reports Net Loss Despite Revenue Growth .)
— Dan O'Shea, Managing Editor, Light Reading