Windstream (NASDAQ:WIN) is an independent telecommunications giant born out of a strategic merger between former Alltel Corporation's landline business, and Valor Communications Group. The union was forged in 2006 in a multi-faceted deal valuing over $9 billion.
The merger was well planned, as it not only impacted the market, opening up the rural focused areas, but it also provided value, making the newly formed player, Windstream, a hot commodity with a customer base of 3.4 million spanning over 16 states. This launched Windstream into the mix as an independent telecommunications provider right up there with the big boys like Sprint (NYSE:S), AT&T (NYSE:T) and Verizon (NYSE:VZ).
In spite of the line-up, Windstream's financial savvy gave it a definite edge and positioned it in a sweet spot serving as a catalyst for further growth and expansion. Based on the dividend yield, the Windstream stock became extremely appealing to investors. The new entity, armed with the flexibility and financial leverage of its predecessors, took advantage of future acquisitions and business development opportunities. Just six years later, it's continued to gain ground with services that far exceed that of local and wireless phone services. The company has reported more than $6 billion in annual revenues since its inception and is listed on the S&P 500 index.
In the 1990s, telecommunication providers responded to the market demand for increased flexibility and secure remote accessibility that would allow companies to extend their business reach. Formerly used point-to-point data circuits were replaced by more cost effective virtual private network services. The switch not only offered better value, but also improved efficiency.
Windstream jumped onto the bandwagon, entering the telecommunications ranks with quite a powerful legacy, having come from two very impressive telecommunications leaders in their own right. This was an excellent move, as everyone wants to reside in the cloud these days. Offering cloud-based service rapidly gained momentum. This billion-dollar market is only experiencing initial penetration. Making its predecessors proud, Windstream aggressively entered the market predicted to achieve global sales of approximately $148 billion by 2014. As a pioneer of sorts, it has definitely positioned itself as an industry leader.
Windstream has solidified its position as a telecommunications mogul. From its first acquisition of CT communications in 2007, Windstream nearly doubled its market presence with 132,000 access lines and 31,000 broadband customers in North Carolina. Continuing to target the untapped rural areas, it again moved with lightning speed to reach a milestone of 1 million internet customers with the acquisition of Lexcom, and D&E in 2009. With the acquisition of Hosted Solutions and PAETEC in 2011, Windstream tapped into the cloud and again established itself as a pioneer.
Last month, Windstream announced the opening of its brand new data center in Little Rock Arkansas. The new 30,000-square-foot data center propels this silent giant into the big leagues yet again, making it a definite force to be reckoned with providing 24-7 access to cloud based dedicated services with a focus on disaster recovery services. Companies such as Polycom (NASDAQ:PLCM), Verizon, Sprint and AT&T have also entered this fledgling arena to provide cloud based services. Although this has created some challenges for Windstream, it is not a stranger to the rules of engagement and the various challenges that come with competition.
The introduction of Sprint Complete Collaboration, a comprehensive UC bundle has not stopped the contender from reaching forward. Windstream countered this launch with a launch of its own, cloud-based disaster recovery services. Interestingly, although some enterprises are still skeptical about cloud-based services, they will almost always agree that newly forged disaster recovery services are worth the investment.
The DRaaS services offered by Windstream addressed several key concerns for enterprises, that of quick and secure recovery of data in the event of a disaster and simple comprehensive storage methods with easy accessibility. This new service definitely makes Windstream stand out because it not only capitalizes on the cloud industry, but also takes it a step further, ensuring ease of use and security for those enterprises that are still doubtful about cloud technology. Windstream is employing cutting edge strategy to distinguish itself among its competitors and this type of foresight keeps the company on top.
The opening of the new data center in Little Rock Arkansas capitalizes on its established cloud-based footprint and uses technology acquired through its partnership with Hosted Solutions to provide a cheaper and more efficient mid-market business grade disaster recovery solution. The data center not only provides businesses with the ability to outsource the architectural design, but also platforms on which to test their new disaster solution. This is a ground breaking idea that defines Windstream's success. The DRaaS solution has launched since April 2012 and provides managed disaster recovery architectures for EMC and NetApp users, as well as VPN and private network customers.
Through its humble beginnings as a primarily rural, residential based telecommunications provider, it has quite effectively turned its focus to enterprises and now boasts an 80% Fortune 500 company customer base. As a wily strategist, Windstream realized early on the healthy implications of competition on the market. Let's not forget that the birth of this billion-dollar industry came about in response to the clamor for more cost-effective and efficient methods of transmitting data and supporting businesses.
Answering the call for dedicated, managed cloud-based solutions during the initial stages has positioned Windstream as a clear match for its established competitors. With its roots well grounded in the traditional land-line phone service, it experienced rapid and impressive growth to envelope advanced enterprise solutions. With Windstream's aggressive expansion, it continues to be destined for greatness.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.