Feb 21, 2012
by Lauren Robinette
Acquisition Is the Major Strategy for CenturyLink, Verizon and NTT
Providers need a general system integration process to provide cloud computing services and offers. If they have a gap in their business they must either acquire or partner to migrate their enterprise customers through a process of system integration, for example, helping them determine what is risk appropriate to migrate to cloud offers and how take the customer through a change process to offer value to move into cloud.
To capitalize on cloud computing, providers made major company acquisitions in 2011: CenturyLink bought Savvis, Verizon acquired Terramark and NTT purchased OpSource and Dimension Data. These acquisitions allow these companies to integrate new skills, capabilities and marketing strategies to offer cloud services to their enterprise and SMB customers.
CenturyLink/Savvis has approximately 80 professionals that deal with service migration and data center expertise for enterprise customers that need connectivity and migration for a virtualized data center in a virtual private cloud. The companies’ assets have yet to be integrated, but it looks like they have a small but effective skills base to support cloud migration.
OpSource and Dimension Data have global partners and parent company NTT for provider connectivity. OpSource is the cloud infrastructure and virtualized data center asset and Dimension Data is the system integrator for the cloud services. Their assets include a connectivity suite offered by partnerships with providers and cloud provisioned offers by OpSource.
Terramark and Verizon are struggling to decide how Terramark will use Verizon’s 300+ professionals and system integrator resources. It is not yet clear how the Terramark virtualized data center assets in the newly formed division will be sold by Verizon. The team is not yet ready to implement on offers as there seems to be a lack of clarity on how offers will be launched into the market, and it is unclear if Verizon’s professional services have the suite of capabilities to migrate their customers to cloud offers. Leadership has changed several times so the assessment and integration may take a while to materialize.
The following show how each company rates on key areas of cloud:
|
Company
|
Cloud Offer & Investment in Data Center Virtualization
|
Carrier or Provider Offers for Connectivity & Access
|
System Integration Skills & Migration Capability to Support Enterprise Customers
|
| OpSource, Dimension Data & NTT |
High
|
High
|
High
|
| Terramark and Verizon |
High
|
High
|
Low
|
| Savvis and CenturyLink |
High
|
High
|
Low
|
Although each of the companies has cloud assets, they still face challenges. To succeed in the cloud market they will need to develop a clear roadmap for system integration and taking the offers to market. In recent surveys of providers, ACG learned that most providers focus on connectivity and struggle to sell services as their sales teams do not have the training to sell cloud, which requires a new sales approach. Purchasing virtualization and data center skills is one way to acquire the assets to respond to customers’ needs to migrate to the cloud, but to gain the competitive advantage providers will need to invest in system integration skills so that they can smoothly migrate customers to cloud.
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