CenturyLink is a fascinating case study in reinvention. Formerly you’d have been forgiven for lumping the company in with all the other telco dinosaurs – big, old, slow and destined to a painful demise. CenturyLink CTL +0.32% has a corporate history that spans close to a century and over that time has moved through several different paradigms of the telecommunications industry.
The latest paradigm, and one which CenturyLink seems to be adapting to with aplomb, is the broader trend towards cloud computing. As traditional voice services quickly become replaced by lower cost (and hence, lower margin) IP telephony, CenturyLink has looked far and wide to bolster its business by embracing the cloud. A number of smart acquisitions (cloud infrastructure provider Savvis, PaaS vendor AppFog and cloud heavyweight Tier3 for example) has seen it become a real force in this latest incarnation of ICT.
Today the developments keep coming with news that CenturyLink is launching a global private cloud offering. Offered across 57 individual data centers, each instance within the private cloud offering is federated into the CenturyLink network of public cloud nodes, thus giving a single interface for both public and private cloud infrastructure. The private cloud offering sits on an identical platform to the public cloud one, allowing for seamless interplay between resources.
It is interesting to look at this news in context of where CenturyLink is as a vendor. They have a large existing colocation business but, as Rackspace has learned over the years, parlaying that into a public cloud business is very difficult. Colocation and public cloud seemingly have no connection in the minds of enterprise IT. What are connected however is a colocation to private cloud progression and the value proposition of a consistent federated public/private cloud hybrid. As such, CenturyLink is providing what can best be described as a gateway drug – by making IT’s decision to move from regular old hosting to private cloud that much easier, they also massively increase the chances that those same customers will, in time, move to public cloud. It is a similar model to that being delivered by VMware VMW +0.93% with its vCHS service. It’s an intermediate step which makes total sense from a product, marketing and positioning perspective.
Make no mistake, no matter what your view is regarding the “end state” of cloud computing, the reality today is that organizations, for the most part, demand a hybrid offering. This announcement is both a logical step for an enterprise-focused vendor like CenturyLink but, perhaps more importantly, a case study for how threatened legacy businesses can reinvent themselves to remain relevant.