CenturyLink Sells Data Centers for $2.15B

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cleelread4567 11/7/2016 | 4:22:50 PM

Telcos Cant Do Data Center Agree with a lot of the posts - this seems crazy. Having worked for some of the large telcos many years ago in Access Mgmt I think one of the main reasons that the Telcos failed in the colo arena is that they built their facilities where the customer had the Telco as the only connectivity option. No customers wants to be constrained to 1 vendor. The opposite of this is Equinix whose facilities are massive interconnection centers which drives value for its customers (and Equinix) and fosters large marketplaces. It is in the telco's DNA to want to control things and our economy doesnt work that way anymore.

They also tried their hand at IaaS which didnt work well for them as AWS pretty much crowded everyone out. Now AWS is one of the largest data center builders (at least where I live in Ashburn, VA). Building and operating data centers is a capital /scale intensive business which doesnt work well if you dont have scale and capital - which the telcos dont so best option is to sell for something to someone who can earn some return on these assets. See more consoidation to come.

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rauf.sulya 11/6/2016 | 3:26:01 AM

Too many Mergers & Acquisitions !!! Confused.. Tata sold their Data center business to ST Telemedia. Verizon wants to sell it off.

Ceuntury link now..Why ? Why ? Stratgegy to be player only as ISP ?

I would say, they might have overprovisioned datacenter and expecting customers to colocate. As mentioned, now these providers will make customer premises as small data center..too much bandwidth demand...

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danielcawrey 11/5/2016 | 3:06:20 PM

Re: Will this be a seesaw trend? It seems as though the tenor is that datacenters are not wanted; that doesn't mean in the future they will become desirable again.

I can see from a security perspective why in the long run they might become something that organizations want. Physical security in terms of total ownership of a datacenter cannot be discounted.

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WilliamBrown99 11/5/2016 | 10:10:12 AM

Tara I think this is quite insane, it's absolutely too much!

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jbtombes 11/4/2016 | 3:32:33 PM

Re: Will this be a seesaw trend? Here's my pitch, a new reality show: "Flip that DC." Tech, money, geeks. Big Bang Theory meets Silicon Valley meets Property Brothers. I'm booking CenturyLink for the first season. Three dozen data center expansion projects over past five years. It's all about the ROI.

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inkstainedwretch 11/4/2016 | 3:11:28 PM

Re: Will this be a seesaw trend? Yes.

I would assume that which way you go would depend in part on whether you could afford to build/buy your own data centers in the first place, and then it would depend in part on how much you need to invest in keeping your data centers versus how much you can charge depending on whether you own or rent? Or are there other significant factors to consider?

--Brian Santo

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mhui0 11/4/2016 | 3:01:06 PM

Re: Will this be a seesaw trend? Data Center as a Service. That's the trend.

Telcos can stitch together data centers near their customer's office and rent that as a complete data center, despite not owning any of those buildings and hardware.

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inkstainedwretch 11/4/2016 | 2:30:19 PM

Re: Will this be a seesaw trend? There's an incipient trend in which smaller data center customers can stitch together their own regional CDN/cloud networks. Should that hybrid CDN architecture become common, that would be an argument for companies like CenturyLink owning their own networks of CDNs and local data centers.

But if you want to buy Level 3, the cash has to come from somewhere. And you can always cut connectivity deals with the data centers you spin off.

--Brian Santo

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msilbey 11/4/2016 | 2:29:34 PM

Re: Will this be a seesaw trend? I do feel like this is a push-pull cycle. I assume data centers are difficult on the balance sheet (lot of capex and opex), but at the same time, if you're a big enough telco, wouldn't owning be better than leasing in the long term?

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[email protected] 11/4/2016 | 2:13:10 PM

Will this be a seesaw trend? Data center ownership - will this be something that CSPs will want, then not want, then want again etc etc?

Should large telcos own their own data center facilities?

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