Seeking Alpha

CenturyLink counting on data centers, network to take on Amazon

"We believe we have the scale to compete," declares CenturyLink (CTL) cloud SVP Andrew Higginbotham as his company unveils major cloud infrastructure (IaaS) price cuts and new support/service features in response to big price cuts from Amazon, Microsoft, and Google.

Higginbotham argues CenturyLink's 56 global data centers and massive U.S. and international fiber networks will help it gain enterprise clients - the company claims its network allows it to provide outbound bandwidth pricing that's 50% cheaper than Amazon's (AMZN).

CenturyLink has 1K+ enterprise customers and is the second-largest U.S. provider of data center colocation services, behind Equinix (EQIX). Its latest moves were enabled in part by recent acquisition Tier 3, an IaaS provider that tries to differentiate by simplifying service management and automation.

Nonetheless, CenturyLink still has to contend with Amazon's umatched mindshare, feature set, and developer support - Synergy Research estimates Amazon's Q4 cloud IaaS/cloud app platform (PaaS) share was north of 30%, and bigger than that of its top 4 rivals (Microsoft, Google, IBM, and Salesforce) combined. It also competes against other IT and telecom giants (Verizon, H-P, VMware), and independent players such as Rackspace.

Synergy's John Dinsdale: "The public IaaS market is essentially becoming commoditized ... Companies like CenturyLink have little option but to respond to pricing initiatives from [Amazon] (and Google and Microsoft) if they want to aggressively grow their IaaS revenues."

From other sites
Comments (10)
  • Budavar
    , contributor
    Comments (1396) | Send Message
    The above excellent summary of Century Link's challenge to Amazon
    appears to confirm an additional challenge to AMZN's "deceit-tainted" PER.


    Despite a 20% hair cut AMZN is now even more over priced than 4 months ago in view of upcoming losses Bezos himself "guided" to the market.


    That brings me to the interesting/fundamental question:


    Has Bezos lost control over his own budget, specifically his ability to create or manipulate profits?


    Specifically is Bezos compelled to make gigantic capex investments + incur other significant expenses just to stay even with his increasing competition? Is he the proto type of the athlete who has to run faster + faster to stand still, even fall back?
    (Fall back = report losses).


    Per chance I'm old fashioned with the reminder: a business by definition is in business (pun intended indeed) to make profits under our capitalist free enterprise system. Does it logically follow = no sane CEO would report a loss unless HE OR SHE IS FORCED TO?
    4 May 2014, 01:38 PM Reply Like
    , contributor
    Comments (44) | Send Message
    Your probably one of the same people who were ragging on APPLE, up untill 2 weeks ago.All those people crawled back into their holes lately.
    4 May 2014, 03:34 PM Reply Like
  • Budavar
    , contributor
    Comments (1396) | Send Message
    Lyrics inspired by U2's 'Running to Stand Still' + balllad by Wikipedia.


    When he woke up
    Woke up from where he was
    Sleeping still
    He said:"I gotta do something
    About where we are going."


    Step on a jet plane,
    Step out into the Seattle rain,
    Spend a billion here
    Or a million there.


    Sweet the sin of deception,
    Bitter taste in my mouth,
    I write seven PRs,
    But I see no way out.


    You learn to weep without crying
    Speak without talking,
    Silently screaming.


    Then he floated out of there.
    He is raging,
    He is raging,
    The north western blows up in his eyes.
    He will...


    Suffer the needle chill,
    Wall Street's will.
    He keeps running to stand...


    4 May 2014, 02:43 PM Reply Like
  • zorrow
    , contributor
    Comments (1659) | Send Message
    As a customer--I love Amazon--but its a potential "My Space" as far as an investment is concerned.
    4 May 2014, 03:12 PM Reply Like
  • MLP Trader
    , contributor
    Comments (984) | Send Message
    "Synergy's John Dinsdale: "The public IaaS market..."


    Isn't Dinsdale one of the famous "Piranha Brothers":

    4 May 2014, 04:19 PM Reply Like
  • bullsbearspigs
    , contributor
    Comments (376) | Send Message
    please focus on the CenturyLink issues and keep the I LOVE APPLE cult..


    apple, facebook and amazon ...and the rest of the daytrader teen favorites and all the blah blah blah ...comments on the junior high school blogs...


    CTL = great company, great stock, doing the right things
    4 May 2014, 04:41 PM Reply Like
  • John Grandits
    , contributor
    Comments (507) | Send Message
    Yeah, AAPL and AMZN have been blah investments...I'll stick with FB if you're putting that in the same group.
    4 May 2014, 11:07 PM Reply Like
  • fidelity comment
    , contributor
    Comments (191) | Send Message
    Am i mistaken in thinking this may work in DLR's favor?
    4 May 2014, 07:28 PM Reply Like
  • Patent News
    , contributor
    Comments (1455) | Send Message
    amazon still will clobber them in this area.
    5 May 2014, 05:23 AM Reply Like
  • LST
    , contributor
    Comments (62) | Send Message
    Don't really care about AMZN as a stock, (too expensive, and price does matter, free cash flow is minuscule) but I hope CTL is beginning to think about getting out of the cloud business. Too much competition. They should let the big boys battle it out and focus on the better returns they can generate by investing in their core business.
    7 May 2014, 12:38 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs