CenturyLink shakes up public cloud market with new pricing regime

CenturyLink (NYSE: CTL) is looking to disrupt the public cloud services industry dominated by Amazon by offering a series of new pricing plans and support elements as part of a broader move to illustrate the growing set of capabilities it built organically and through key acquisitions like Tier 3.

Set to go live in mid-June, the service provider said it is reducing cloud-based CPU, RAM and block storage pricing by 60 percent and bandwidth pricing by 50 percent. In particular, it will charge $0.05 GB out/per month.

"CenturyLink over many years gets this concept of bringing value to customers by reducing price," said Andrew Higginbotham, senior vice president, cloud and technology, at CenturyLink Technology Solutions, in an interview with FierceTelecom.  

Besides the pricing, the service provider is also introducing a series of support bundles. Customers can choose from three support tiers, select from a list of its most popular NOC service items, or work with CenturyLink's professional services team. 

All of these new elements are supported by its growing base of data centers. To date, the service provider has a total of 56 data centers, including 16 nodes offering its public cloud product. 

Higginbotham said the company is seeing "not only seeing new customers come in, but also CenturyLink customers as well as legacy Savvis customers moving onto this platform."

Although much of CenturyLink's key technical talent resides in its Monroe, La., location, much of the cloud services team resides in Seattle, where the telco established Cloud Development Center. Housing the cloud team there makes sense because it is the place where other dominant players like Amazon, Google and Microsoft also reside.

Following recent expansions of the public cloud capabilities into Toronto and London, CenturyLink is looking to expand into Singapore, with other possible sites in either Australia or Japan.

However compelling CenturyLink executives believe their new pricing regime is, John Dinsdale, a chief analyst and research director at Synergy Research Group, says this is an inevitable move they have to make in order to stay competitive with Amazon (NASDAQ: AMZN), Google (NASDAQ: GOOG) and Microsoft (NASDAQ: MSFT).

"The public IaaS market is essentially becoming commoditized," he said. "While there may be some additional selling points, a lot of buying decisions are being based on a pure price-per-unit basis – and it is very easy to get comparative pricing from the various cloud operators. Companies like CenturyLink have little option but to respond to pricing initiatives from AWS (and Google and Microsoft) if they want to aggressively grow their IaaS revenues."

For more:
- see this blog post

On the hot seat: CenturyLink's Wyatt: It's about driving value with a broad solution set

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