CenturyLink (NYSE: CTL) will continue to look at ways to enhance its data center and managed services unit by either building products in house or purchasing another company with specific talents or capabilities.
Stewart Ewing, CFO for CenturyLink, confirmed that strategy at the UBS Annual Global Media and Communications Conference.
"From a data center perspective, we'll be looking more so to add different products to the portfolio than a huge data center acquisition," Ewing said.
Evidence of its data center acquisition focus was on display this week when it announced on Monday that it would purchase DataGardens.
By acquiring DataGardens, the service provider will be able to immediately address disaster recovery issues. CenturyLink will be able to give its customers a way to mirror physical or virtual machine data in a cloud environment if a man-made or natural disaster takes down their site.
"The acquisition of DataGardens--that provides data backup and restoration services for companies that keep their data in the cloud," Ewing said. "It was basically like other decisions we're looking at to add to our cloud product suite and we felt like it was a good opportunity to get a product that we see as a product that's really needed by the market."
While CenturyLink continues to expand its data center footprint, the acquisition of DataGardens shows its interest in enhancing its cloud services portfolio with additional service capabilities that it had not built yet. Along with enhancing its data backup capabilities, CenturyLink enhanced its cloud application capabilities by acquiring Tier 3 and Platform as a Service (PaaS) provider AppFog.
In the cloud and managed hosting business, Ewing said the telco expects "ultimately over the next few years to stay in the 10-15 percent range" of growth.
During the third quarter, the cloud and hosting business grew about 7 percent. Overall managed hosting services were $147 million, up 14 percent from the third quarter of 2013, while colocation revenues were $163 million, up 4.5 percent year-over-year.
Ewing said that the company will be able to address a mix of public and private cloud service requirements.
"We're adding products and services to our cloud product and we'll basically have a public cloud product and a private cloud product, which will give our customers the opportunity to choose which they need," Ewing said.
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