CenturyLink (NYSE: CTL) is realigning its cloud services management ranks, announcing that Jared Wray and Jonathan King will be leaving the company today, a sign that it may be reassessing its cloud services strategy.
As VP of platform and business development for CenturyLink, King helped the telco make its initial push into cloud and managed services by leading the team to acquire Savvis in 2011. After establishing that foundation, he helped the company in acquiring other cloud-based companies, including Appfog, Tier 3 and Orchestrate, a cloud-based managed database provider.
Wray, who served as CenturyLink's senior vice president of platform and application framework development, came to the company when it purchased his startup Tier 3 in 2013.
During his two-year tenure with CenturyLink, Wray helped the provider build out its cloud capabilities and integrated its technology platform.
Despite their departures, Justin Lopinot, a CenturyLink spokesman, told FierceTelecom in an interview it remains dedicated to providing cloud services.
"The main point is that it's unrelated and it's a timing coincidence, so moving forward we're still heavily focused on cloud as a key capability for CenturyLink," Lopinot said. "We're looking at our longer-term strategy to transform CenturyLink into IP-enabled, hosted, cloud, and hosted IT solutions company and this allows us to flatten our organizational structure to be more be more innovative and provide more benefits to our customers."
The service provider plans to combine cloud functions with its core technology groups in alignment with its long-term strategy to become a bigger player in the IP-enabled network services, cloud infrastructure and hosted IT solutions markets. By combining these functions, CenturyLink said it will be able to fully integrate CenturyLink's technology teams, scale its product offerings and gain new efficiencies.
To drive future product development around cloud services, the service provider recently formed a Technology Advisory Board. The board includes industry experts who will help it review and evaluate product development plans, foster new partnerships and acquire technology assets to extend its capabilities, and reach new customers.
Aamir Hussain, who joined CenturyLink in 2014 as CTO, will oversee all of the cloud service functions and integration of the former Tier 3 and Savvis cloud technology organizations.
Regardless of its plans, CenturyLink faces a number of challenges in maintaining its cloud services momentum.
For one, it has to deal with powerful players like Amazon Web Services (NASDAQ: AMZN), which according to Synergy Research has a market share greater than 30 percent. Joining AWS are Microsoft (NASDAQ: MSFT) and Google (NASDAQ: GOOG), which saw revenue growth rates in excess of 100 percent during the third quarter.
These management changes come at an interesting time in CenturyLink's cloud service life.
CenturyLink reported in the third quarter that strategic revenues declined 2.1 percent year-over-year to $1.56 billion due to what it said were continued declines in low-bandwidth data and hosting services.
It also announced during its third quarter call that it is considering options for its data center business. Although it does not need to own data centers to stay in the cloud services game, CenturyLink said it is looking at a number of options for this segment, including a partnership or joint venture, a sale of all or a portion of the data centers, as well as keeping some or all of these assets and operations as part of CenturyLink's portfolio.
Lopinot acknowledged that while it is looking at what to do with its data center and colocation businesses, cloud services is not part of that process.
"We're definitely exploring options, but the cloud stuff is unrelated and I think people are trying to draw lines that aren't really there," Lopinot said.
The company is not alone in making an effort to realign its data center and cloud business lines. Windstream reached a deal earlier this year to sell off its data center business so it could focus on its core business and consumer networking services, for example, while rumors have emerged that AT&T (NYSE: T) is going to make a similar move.
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