By completing its sale of its data center facilities, CenturyLink said it can now sharpen its focus on providing a greater array of IT service to business customers.
The service provider recently sold the data centers and colocation business on May 1 to funds advised by BC Partners, in a consortium that includes Medina Capital Advisors and Longview Asset Management.
Now that the data center sale is complete, CenturyLink will maintain a 10% equity stake in the VC consortium’s newly formed global secure infrastructure company, Cyxtera Technologies.
Cyxtera assumes ownership of CenturyLink’s portfolio of 57 data centers, which includes approximately 195 megawatts of power across 2.6 million square feet of raised floor capacity. Nearly 700 CenturyLink employees will transition to Cyxtera.
Dean Douglas, president of sales and marketing for CenturyLink, told Fierce Telecom that its customers will still be able to access the same services they always have from the company.
“It’s important to understand that we’re still in the cloud business, the hosting business, and that we’re still selling those colocation services, but we sold the physical plant,” Douglas said. “Our customers will be able to work with the same folks they have worked with in the past so there should not be much in the way of disruption.”
CenturyLink will use the $1.86 billion in the proceeds from the sale to partly fund its acquisition of Level 3 Communications.
Besides being able to get funding for the Level 3 deal, the sale also enables CenturyLink to enhance its standing as a IT partner for business customers without having to dedicate capital to maintain data center facilities.
“It is part of our focus on trying to get further into the IT world, but in an asset lite play,” Douglas said.
A big part of CenturyLink’s IT focus is to either partner or acquire smaller IT-related companies that bring specific skills to its fold.
Earlier this year, CenturyLink acquired SEAL Consulting, an SAP solutions provider, to enhance its integrated application transformation capabilities, for example. New Jersey-based SEAL brings is its expertise in implementing SAP solutions for customers across manufacturing, retail and consumer products industry verticals.
“We’ve made a number of acquisitions where we have acquired service companies in order to facilitate our capabilities in the IT and communications world,” Douglas said. “We think it’s important as customers think about two things—hybrid IT and digitization—and that we will play in both camps.”
One example of this new drive is CenturyLink’s Cloud Application Manager. This service orchestrates the delivery of infrastructure, applications and services across multiple clouds.
Douglas said services like Cloud Application Manager can help them “differentiate ourselves and address our customer’s issues and concerns as opposed to owning physical plant.”