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CenturyLink continues its strategy of acquiring its way into cloud, buying a big data company and also a disaster recovery vendor whose technology could have a much wider reach in the telco's portfolio.
The company acquired Cognilytics, a predictive analytics and big data company based in San Jose, Calif., to fill out a broader networking and cloud portfolio that covers end-to-end customer needs, according to Girish Varma, president of global IT services.
There are many high-end IT consultancy services available from the likes of IBM and Accenture, but there is a huge swath of underserved clients outside the fortune 500 that CenturyLink is targeting with the Cognilytics buy, Varma said.
CenturyLink this week also acquired DataGardens, Inc., a Canadian disaster recovery as a service (DRaaS) vendor it has partnered with for years. The move is intended to bolster CenturyLink's cloud platform, but it also has the potential be part of a broader strategy around workload migration and an emerging market where customers rely on multiple cloud providers.
"Implicit in a 'recovery' is a migration," said Jonathan King, vice president of cloud strategy at CenturyLink. "Adjacent to the other things we provide, the tool itself enables you to migrate workloads."
CenturyLink is sticking with disaster recovery for now, but deeper integrations could be on the horizon that would allow customers to migrate easily between on-premises and cloud, or even between clouds, King said.
"Think beyond a flood event; think about a stress event where it might be a performance issue," King said. "If you have an easy, cost effective way to recover -- broadly defined -- you add more benefit to the customer and the provider benefits with more usage."
Dave Simpsonanalyst, 451 Research, LLC, based in New York
This deal brings higher value than just the addition of disaster recovery, so expect to see CenturyLink bring the technology across its entire product line, said Paul Hughes, an analyst with IDC, a research firm based in Framingham, Mass. It also aids CenturyLink's efforts around managed services and automation.
"You would go with someone like a CenturyLink because you see an opportunity for a much more customer-centric approach," Hughes said.
Edmonton, Alberta-based DataGardens, founded in 2007 as a conventional disaster recovery vendor, had a partnership with Saavis, which was acquired by CenturyLink in 2011.Its SafeHaven tool supports multiple hypervisors and all CenturyLink platforms. In the first quarter of 2015 support will be added for Amazon and OpenStack.
"From any to any -- this ability to connect not just a single production data center with a single recovery data center, but true migration, load balancing across multiple platforms and hypervisors is unique to our product," said Geoff Hayward, DataGardens CEO.
DRaaS: CenturyLink's key to cloud
Vendor claims aside, there's not much technologically that separates DRaaS vendors, and DataGardens doesn't appear to be doing anything particularly innovative, said Dave Simpson, an analyst with 451 Research, LLC, based in New York. Regardless, DRaaS for network providers is becoming more of a 'must have' rather than a 'nice to have,' so it’s a smart move by CenturyLink, he added.
"Disaster recovery is the low hanging fruit for cloud adoption. It's one of the easiest cases to be made for cloud," Simpson said. "The ROI is fairly immediate, so picking up a DR as a service vendor is a good way to get people into the cloud."
Large cloud providers already offer disaster recovery services; IBM and VMware launched DRaaS earlier this year.
CenturyLink has taken a different path than its fellow telcos, with a strategy built around agility and a focus on the cloud platform in the same way as cloud heavyweights Amazon, Microsoft and Google, King said.
CenturyLink acquired Tier 3 – in turn swapping it out for Saavis -- and AppFog in the past 18 months to support its infrastructure as a service and platform as a service products, respectively. The telco also has introduced tools for managed, on-demand and private cloud.
The company is among the top five managed infrastructure providers in North America, along with Rackspace AT&T, Verizon and TWC, according to 451 Research. Those companies make up roughly 30% of the entire hosting market, which is estimated at around $56 billion for 2014.
CenturyLink reported $147 million in revenues in managed hosting, which includes cloud, in the 2014 third quarter – a 17% year-over-year increase. By comparison, Rackspace generated $459 million in dedicated and public cloud revenue, while industry analysts have predicted public cloud leader Amazon Web Services will generate $5 billion for the entire year.
Despite its efforts to stand apart from the other telcos and managed hosting vendors, analysts still see those providers as the main competition for CenturyLink.
The advantage telcos have over other cloud vendors is the breadth of their network and the ability to offer managed services, but CenturyLink isn’t on the radar of most potential cloud customers, Hughes said. Disaster recovery could be one of the avenues to boost its customer base and bring more companies to its cloud if properly marketed, he added.
"The biggest gap is just in terms of companies like Amazon, Google and Microsoft is the marketing prowess," Hughes said. "If they're going after new business this is a time they're going to probably need to look more aggressively in customer targeting."
Trevor Jones is the news writer for SearchCloudComputing. You can reach him at firstname.lastname@example.org.