Windstream rebrands Enterprise, Wholesale divisions, focuses on customer evolution

Windstream launches two new brands for its wholesale and retail business lines. (Windstream)

Windstream has launched a new brand for its enterprise and wholesale lines—Windstream Wholesale and Windstream Enterprise—reflecting the service provider’s desire to shed its image as just another small-town voice-centric telecommunications company.

The service provider said the new brand strategy is a response to the demands of the business market for a more agile network and communication service provider.

Windstream Enterprise and Windstream Wholesale are focused on helping business and carrier customers across four key IT imperatives—providing cloud connectivity, elevating customer experience, enabling employee collaboration, and enhancing security and compliance.

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Getting to this point required Windstream to realign its network towards a software-centric model. To meet this opportunity, Windstream made a significant financial investment to upgrade the company’s network and product portfolio, including significant advances in software-defined network capabilities and a new Cloud Core architecture.

Now that the acquisitions of EarthLink and Broadview—two deals that gave the telco a broader set of capabilities—are behind them, the product sets of both companies are now fully integrated into the cloud core architecture and new brand strategy. With the EarthLink purchase, Windstream could more readily advance into the SD-WAN space with a ready-made product, while Broadview gave Windstream a broader set of UCaaS cloud capabilities.

Layne Levine, president of Windstream Enterprise and Wholesale, told FierceTelecom that the new branding reflects how customers want to migrate to a broadband-heavy world, they want to do it in a cost-effective and optimized manner.

Layne Levine, Windstream
Layne Levine

“The work Windstream has done by pouring $3 billion into the network and creating a best-in-class experience for the client as we migrate customers from legacy services to our SD-WAN products and UCaaS products,” Levine said. “By combining the EarthLink acquisition, which had a roughly two-year start in rolling out SD-WAN, and the same thing with the Broadview HD Office Suite.”

Levine added, “We think [with] those two products combined with the rest of our network’s scope and scale when rolled into a service model, we can be the link to help our client figure what’s the new technology and how to use it.”

MPLS to SD-WAN transition

A big message Windstream has centered on with the new branding, particularly for business customers, is to help more businesses transition from legacy MPLS and other technologies to SD-WAN and cloud services.

Being an ILEC and a competitive carrier, Windstream does not have as large of an MPLS base to cannibalize.  

Joseph Harding, chief marketing officer of Windstream Enterprise and Wholesale, said that the service provider wants to enable customers transition to cloud and other software-based solutions.

Joe Harding

“Business customers need a provider that really understands their unique challenges and that has proven they can help them get off that old technology and onto the new technology,” Harding said. “If you’re one of the incumbents that has a huge base of MPLS revenues, you’re writing down revenue and margins in moving over customers so they’re reluctant to do that.”

Harding added that “when the customer forces their hand, they will have the capability to do that but we want to take a much more aggressive posture to that and signal to the market to disrupt that model.”

While Windstream has not revealed how much SD-WAN is a portion of its total revenues, the service provider did reveal in December that it reached its 500 mid-sized enterprise market customer mark for SD-WAN.

The service provider noted that several customers across various verticals, including regional banking, healthcare, retail and manufacturing, have purchased its SD-WAN service.

During the third quarter, enterprise revenue was $554 million and the contribution margin was $106 million or about 19%, an increase of 80 basis points sequentially and 170 basis points over the past two quarters.

“If you look at our revenue, we still have a large share of legacy revenues, so it’s hard to see a lot of this in our top line yet,” Harding said. “We have revenue that’s going away with customers going off TDM and in some cases to MPLS to hybrid WANs to SD-WAN.”

But being still a nascent product opportunity, Windstream sees plenty of opportunities to scale its SD-WAN revenue base. With less than 10% market share in total, Windstream has 90% of the market to chase with SD-WAN.  

Harding said that Windstream is seeing more of its Enterprise revenue come from next-gen services.

“If you look at what we’re selling and what’s driving the next new logo sales, 75% of our new logos are on strategic products as compared to less than 20% just a few years ago,” Harding said. “We see it helping us getting in that next new door and that new logo and over time the growth portfolio becomes a larger share of the total revenue base and the stuff that’s declining becomes a much smaller share.”

Focus on software

As part of its growing focus on software-based solutions, the service provider is going to leverage new innovations like its wholesale SDN Orchestrated Waves (SDNow) service for enterprise customers.

SDNow, which offers transport service to 50 U.S. markets, is an optical wavelength service that uses a centralized, programmable SDN environment.

The SDNow service concept is being applied to Windstream’s retail Ethernet service line, giving customers more control over their experience.

“We’re starting to leverage the SDNow on the enterprise side for our Ethernet portfolio,” Harding said. “That’s a good example of us taking a more aggressive posture and pushing the envelope on how do we leverage the latest technology to change the customer experience and you’re going to see us doing more of that in the SD-WAN space as well.”

While Harding could not provide any specific details yet, Windstream will be pushing out new product elements for not only SD-WAN, but also security and UCaaS.

“There will be big investments in UCaaS, more investments in security, and we’re looking at a lower-cost opportunity on the SD-WAN side,” Harding said. “It’s more to complement our current solutions.”

Harding added that Windstream is also going to leverage “SDN broadly to give customers more control and give our internal teams more agility in how they turn up and manage those services.”