CEO Chat With Chris Ancell, XO Communications

Steve Saunders caught up with XO Communications' Chris Ancell and heard his views on open standards, cloud, security, and more.

Steve Saunders, Founder, Light Reading

September 21, 2015

12 Min Read
CEO Chat With Chris Ancell, XO Communications

With so many new and exciting communications technologies now under development, it's easy to get caught up in the industry's escalating hype cycle. That's why the conversation that I had recently with Chris Ancell, CEO of XO Communications, was so important.

Ancell has been on the front lines with XO for just over a year and a half, during which time he's increased the company's growth, and also driven its transformation into a nationwide provider of advanced IP communications services.

Figure 1: XO Communications' Chris Ancell XO Communications' Chris Ancell

That doesn't mean XO is charging blindly at every next-gen opportunity that presents itself. In fact, the company's success -- both fiscal, and in terms of customer satisfaction -- clearly has been driven by Ancell's ability to discern opportunity from inflated claims from communications equipment providers.

In our recent phone conversation Ancell cut through the marketing miasma around open standards, cloud, security, and more.


Page 2: XO in the service provider landscape

Page 3: The long road to virtualization

Page 4: The network security question

— Stephen Saunders, Founder & CEO, Light Reading

Next page: XO in the service provider landscape

XO in the service provider landscape

Steve Saunders: Chris I just wanted to let you know that I'm recording this conversation. I hope that's okay with you?

Chris Ancell: You and the NSA.

SS: [Laughs] Yeah, exactly. I've been using that joke a lot myself recently as well.

CA: It's a tired joke.

SS: Oh, it's always good, depending on who you're talking to. Huawei loves that joke, of course. They roll around laughing.

Chris: [Laughs] I'm sure.

SS: Let's start with a big question: What's your view of the service provider landscape in the US currently, and where does XO play within it?

CA: I would say that we continue to see that it's very competitive, despite the aggregations that have gone on and continue to go on. We think we play a fairly significant part in there and continue to be a significant provider for a lot of companies. Any time you're talking about competition you kind of have to refer to the FCC, and Chairman Wheeler. We think that he's done a great job continuing to make competition matter, and make sure customers have choices. We see the landscape continuing to be vibrant, robust and competitive.

SS: What do you want people to think of when they think of XO Communications? What would you like to be recognized for versus all of the competition?

CA: The first is that we continue to run a customer-facing model across just about the entirety of our customer base, and a lot of other companies have just gone away from that. It's not just a sales person who comes in and talks about needs and gets you to sign a contract. We have a role called "customer service manager" who is in an ongoing relationship with the account management for anything that comes up. Customer service is the one that everyone continues to strive for, but we have a structural model in place that's clearly differentiable.

The other one is that we are a billion and a half [dollar company]. In today's industry, you might say a billion and a half isn't what it was 5 years ago. But at a billion and half we have national network capability; we have unified communication capability; we have the capabilities that the large providers have. But we also bring that customer service and support model, and the flexibility to meet their particular needs.

SS: Two of the areas that a lot of your competitors are rushing into right now are cloud and, also, data center interconnection. Are those important markets to you?

CA: Let me take you back a bit in order to answer that question fully. I'm 53 now, and I began my career selling what today would be classified as cloud computing services. I started with a company called The Service Bureau Company that sold time-sharing on IBM 360s. Then I was in Oracle when Ellison talked about "The network is the computer." Then I was at Exodus when the data centers were going to rule the world. So I've had this interesting career through all of this stuff called "cloud."

What we fairly quickly realized is that trying to be a competitor to AWS [Amazon Web Services] is not a good idea. They already have a dominant position. You have a couple of the largest companies in the world, Microsoft and Google, who are chasing them hard. That isn't a place, no matter how much investment capability we have, where it makes sense for us to play. So we made the decision that we're we will be, relative to cloud, is the provider of the network that enables access to cloud services.

So we have a close relationship with AWS Direct Connect; the Equinix Cloud Exchange; the CoreSite Open Cloud Exchange. We're in conversations with Azure, Google, and so on. All of those things mean that as our customers we can allow you to access any cloud service you want. We believe that's a core capability, and that customers clearly want the choice. But to actually be a cloud application provider, or a cloud storage provider? That's not going to be an area of focus for us.

SS: It would be pretty hard to compete against the other companies you mentioned. Within every market you need to find your specialty.

Another trend which is really huge these days obviously is virtualization. How important is that to XO?

CA: It's a space that we're very interested in. We're spending a lot of time with different providers in the lab looking at virtualization and what it means in terms of true value to the customer. The idea of being able to deliver value-added services like acceleration or security through an app-like offering… that's very interesting. We're not at the point where we're rolling anything out, but we have a lot of things going on and 2016 is probably the point in time when we'll be ready to begin to launch.

SS: So you are at the proof of concept stage right now?

CA: Yes.

SS: Is there a big difference between the solutions from different companies right now or are they all much of a muchness?

CA: Well, it's interesting. The way that I would categorize it, and this is probably an over-simplification, is that you have one group of companies that are saying "hey, we'll eliminate the specialization of the network hardware and use a relatively inexpensive computing device in the network instead, and then you can manage and enhance and provide services to your customers through software." That's what companies like IBM are doing.

But then when you talk to someone like Cisco, who has always had the propriety box in the network, the conversation is a little bit different. It’s more "Yeah, we're going to do the same kind of thing." But they’re not really going to do the same kind of thing because they there’s such a huge vested interest in being the only thing.

SS: Yes, well, if they really embrace the first model you are describing they're out of business, so that's not really an option.

CA: Right. So that's the place we see the biggest difference, between the people who are staying on the path of an inexpensive computing device that you direct through software, versus the people who have historically had a proprietary device and are now saying that they're going to do something different with it.

Next page: The long road to virtualization

The long road to virtualization

SS: I'm launching a new not-for-profit organization next year, called the New IP Agency. It's an educational organization and its role is to accelerate the deployment of profitable virtualization services around the world. I think that's a really important mission. There's a lot of confusion around virtualization, and there is no consensus on virtualization standards.

When I first announced that I was going do this, this year, I got a lot of very warm feedback, from everybody. Then we announced that we were going to do some interoperability testing between the VNFs and NFVis from all of the different companies and...

CA: …then it got really interesting.

SS: It did. And I wanted to get your take on it. What happened was all of the telecom incumbents joined up immediately, with one exception. They all said they thought it was a fantastic idea and that it would be really useful to their customers. Cisco was the first to sign up, which impressed me. The Juniper came in. Then Huawei. All those guys.

But you know who didn't sign up? None of the enterprise companies that are making a play for the service provider space. I'm still working on getting them all to change their minds, but I just thought that it was tremendously disappointing because you hear everybody talk about how important "open" is, and this is literally the first and only independent and truly open interoperability that the industry has had a chance to take part in.

CA: Right.

SS: Do you think that we are actually going to get to a point where we have a white box, open, virtualized "peaceable kingdom" with interoperability, or do you think the politics will means it's going to take longer to get there?

CA: I think you've hit on it. It's the latter. I think we'll go through all the battles of those who claim to be completely supportive of the idea and the concept, but who want to rule the world, so they're not going to share.

SS: Okay.

CA: Where we as the service providers are, and, more importantly, where customers are going, means that has to get there eventually. I just think that it will take more time than we ever thought. In the real world we started talking about virtualization with customers six, seven, eight years ago. Unified communications is another one; Hell, we started talking about that ten or 12 years ago, and only now is it what I would call a mass-market solution, where mid-market companies are embracing it. Virtualization is probably going to follow the same kind of path.

Next page: The network security question

The network security question

SS: There's been a lot of M&A activity in the telecom market recently. Can XO continue to grow organically or do you need to participate in that sort of frenzy?

CA: I'd say we build our plans around organic growth, and in '15 we'll show you growth versus competitors. We'll continue to show growth at increasing rates in our long-range plans for '16, '17, and '18. None of that says that we won't consider strategic opportunities that would be beneficial, and we certainly look at those.

We're a smaller player, and so we view the world a little bit as, "Hey, almost everything is an opportunity. There are plenty of customers out there." Sometimes it's just making sure that you're getting in front of them at the right time, when the handcuffs are off because they're coming to the end of a three-year or a five-year contract. We believe there is a ton of opportunity for organic growth for us.

SS: Let me ask you a couple of questions about network security. First, do you get a lot of questions about how secure your network is from customers?

CA: It may be the number one question that we get. It's been such a high-profile issue over the course of the last year and a half that it's top of mind for just about everyone. We continue to make investments, to focus on hardening the network, and internal assets, and also on training our internal people.

When you look at a lot of the events that have occurred, it's not necessarily the typical hacker; it's someone called and said, "Hey, who's the person that does this?" Through that, they’ve been able to start work on penetrating [the network], in some way that you don't want them to. What we’ve seen in consultation with others is that they’re very patient. They'll test for vulnerability, they'll come back three months later and test again, and it will happen over the course of years. It's not just a question of whether the perimeter security is up to the level that it needs to be.

SS: Are managed security services an opportunity for XO? CA: We have an offering, and we're looking at expanding it.

There's a lot of opportunity, but with it comes a need to educate customers about what it is and what it does. A lot of customers have now experienced denial-of-service attacks. So they want to know what to do in the event that it happens again, and what we can do to help in the event that they have one? How can we do something that's the least impactful? Because sometimes shutting down your website may not be the best option for the customer.

SS: Are there any industry verticals that you see being particularly lucrative to XO right now?

CA: Healthcare is number one, based on advancements in the way they're now leveraging technology. What you'll see in a lot of hospitals, that building has stood there for 40 years and the communications capabilities there in some cases look almost to be 40 years old as well. That infrastructure just doesn't work. So there's quite a bit of interest, need and investment in that industry that we see.

The other one is retail, driven by the whole idea of big-bandwidth applications, particularly video, within retail environments. Those are the two big ones.

SS: Chris, how long have you been CEO for now?

CA: Let me see. I think that tomorrow will be 19 months, so a little over a year and a half.

SS: Good job.

About the Author(s)

Steve Saunders

Founder, Light Reading

Steve Saunders is the Founder of Light Reading.

He was previously the Managing Director of UBM DeusM, an integrated marketing services division of UBM, which has successfully launched 45 online communities in less than three years.

DeusM communities are based on Saunders' vision for a structured system of community publishing, one which creates unprecedented engagement among highly qualified business users. Based on the success of the first dozen UBM DeusM communities, the UBM Tech division in 2013 made the decision to move its online business to the UBM DeusM community platform – including 20 year old flagship brands such as Information Week and EE Times.

Saunders' next mission for UBM is the development of UBM's Integrated Community Business Model (ICBM), a publishing system designed to take advantage of, and build upon, UBM's competitive strengths as a leading provider of live events around the globe. The model is designed to extend the ability of UBM's events to generate revenue 365 days of the year by contextually integrating content from community and event sites, and directories, to drive bigger audiences to all three platforms, and thereby create additional value for customers. In turn, these amplified audiences will allow business leaders to grow both revenues and profits through higher directory fees and online sponsorship. The ICBM concept is currently being discussed with a broad group of business leaders across UBM, and is earmarked to be piloted in the second half of 2013 and early 2014.

UBM DeusM is Saunders' fifth successful start-up. In 2008, he founded Internet Evolution (, a ground-breaking, award-winning, global online community dedicated to investigating the future of the Internet, now in its fifth year.

Prior to Internet Evolution, Saunders was the founder and CEO of Light Reading (, Heavy Reading (

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