CenturyLink establishes presence in Australia's data center market

CenturyLink (NYSE: CTL) has taken another step forward with its Asia-Pacific data center expansion effort, announcing that it has extended its services into the Australian market through a partnership with Data-Center-as-a-Service provider NEXTDC Limited.

Having offered network services to over 50 regional and multinational corporations in Australia since 2002, CenturyLink is hardly a novice in the Australian market. Later this year, CenturyLink plans to deploy its public cloud service within the country.

Companies based in Australia will be able to immediately access CenturyLink's managed hosting and colocation services through NEXTDC's network of five data centers in Sydney, Melbourne, Brisbane, Canberra and Perth.

"Australia is a pretty sophisticated market in terms of managed hosting solutions, and what this solution allows us to is converge across country in the five major cities," said David Meredith, SVP and global general manager for CenturyLink, in an interview with FierceTelecom. "For our multi-national customers (MNCs), we can give them a managed, colocation network solution on a CenturyLink contract."

Under the terms of their agreement, CenturyLink and NEXTDC can sell into each other's data centers. This approach will appeal to two customer types: Australian businesses that want to enhance their international reach with CenturyLink's managed hybrid IT services, and existing global CenturyLink customers that need to quickly gain a physical presence in Australia.

Craig Scroggie, CEO of NEXTDC, said in a release that by adding CenturyLink to its partner ecosystem, it can help Australian businesses migrate to a hybrid cloud model.

Meredith said that one of the advantages that having a combined solution with NEXTDC is that CenturyLink can provide one common SLA across all of the services it provides to its MNC customers.

"The other benefit customers get is solution-level SLA opportunities," Meredith said. "If you're going out and getting data from one person, managed services from someone else and if one of those go down you have a problem with the whole solution and your SLA is only going to be for one part of the service."

In addition to having solution-level SLAs, CenturyLink allows MNCs to opt for a hybrid cloud solution where part of the network is managed by the MNC and the other half by CenturyLink. An MNC can then adjust the amount of managed services and colocation they want to purchase depending on their unique needs.

"A number of our customers are saying I know we need to move to the cloud and I don't know the roadmap, but they do a deal with us and maybe starting out it's 80 percent colocation and 20 percent managed services and then 12 months later we want to move the dial to 50/50," Meredith said. "We do flex spend options where we allow them to move their workloads around."

While the telco is continuing to build out new data centers, they are also working with various partners, and NEXTDC is part of that trend. Like the other agreements it has developed with colocation providers I/O and Switch, CenturyLink's partnership with NEXTDC allows CenturyLink to immediately establish their presence in Australia.

"Similar to what we did with I/O in Phoenix and Switch in Las Vegas we're looking at partnerships to move faster into new geographies and this is a good fit for that reason," Meredith said.

Since it is only focused on providing only colocation space, the services CenturyLink can provide through NEXTDC's centers are largely complementary. Meredith said that this relationship will attract more local MNCs to purchase CenturyLink's cloud and managed services.

"NEXTDC is focused on the facility and they don't do the cloud or provide the network so it's all complementary," Meredith said. "I think in-market we'll probably get a lot of cloud and managed Australian customers they're going to bring to us and we're going to pull in multi-nationals so it's a good complementary relationship."

Bringing its set of managed services to Australia comes at a time when CenturyLink continues to aggressively expand its presence throughout the Asia-Pacific market, which has become a major growth target for the telco's data center and managed services business lines.

The service provider has expanded its data facilities and cloud offerings in China, Hong Kong, Japan, Singapore and Tokyo. In addition to extending services into more Asia-Pacific markets, the service provider has extended the availability of its Private Cloud service in all 58 of its global data centers.

Data center and managed hosting services continue to be a major selling point in CenturyLink's business revenue mix. In the fourth quarter, the telco reported that this segment's revenues were $145 million, up 1.4 percent from the fourth quarter in 2013, while colocation revenues rose 1.9 percent to $160 million.

For more:
- see the release

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This article was updated on April 28 with additional information from CenturyLink.