CenturyLink: Cloud, Channel Empowerment Top 2013 Priorities

CenturyLink executives on Thursday pledged to grow the telecom giant's percentage of channel revenue from 15 percent to 30 percent within the next five years -- all part of a plan to empower partners as CenturyLink doubles down in hot markets like cloud.

Kicking off CenturyLink's annual Alliance Expo conference in Denver, Blake Wetzel, vice president of sales for CenturyLink Channel Alliance, said CenturyLink had a record year in 2012. Now that the company has digested major acquisitions like Qwest and Savvis, it will focus on channel priorities like ease of doing business and growing market share with the help of partners.

Wetzel told about 500 assembled CenturyLink partners that the telecom provider won more than 50 percent of opportunities brought in by the channel in the past year.

"It's because we turned the conversation into responding to what you asked for, and helping you design what you needed," he said.

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Jim Ousley, Savvis' CEO and president of CenturyLink's Enterprise Markets Group, said CenturyLink has become a "case study" for strong roll-ups and consolidation among telecommunications companies. CenturyLink is now well-positioned to take on markets like cloud and MPLS, both of which have large total addressable market (TAM) opportunities, he said.

But CenturyLink, which is the U.S.'s third-largest telco, needs more channel buy-in to get there, he said. Ousley stated a goal that over the next three to five years, CenturyLink will grow its channel percentage from 15 percent to 30 percent. The Savvis hosting business, in particular, has room to expand, and only does about 5 percent of its current revenue through partners.

"There's no question in CenturyLink's mind that we cannot get at these markets without strong channels," Ousley said. "We need you, and we need you to be a bigger part of our business."

That customers are embracing cloud computing technologies is no longer a question, Ousley said, but in addition to net-new business, CenturyLink has major, untapped cross-sell opportunity. The overlap in buying between CenturyLink's top 25 hosting customers and top 25 network customers isn't even 10 percent.

Ousley said CenturyLink is the right bet for partners because the breadth of its services portfolio is wider than that of major competitors.

CenturyLink plays in hosted SAP HANA, Web performance management, Web consulting, lifecycle services, application management, infrastructure solutions, facilities/colocation and network services while major competitors, from IBM, AT&T and Verizon to Terremark, Rackspace and the major systems integrators, only cover a few of those.

"There is plenty of opportunity in every market represented in this room," he told partners.

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In addition to M&A, CenturyLink has also spent a lot of time in the past two years restructuring. Most recently, it combined its network services business sales and operations teams into a single organization, effectively merging its enterprise businesses, including network services and regional markets.

It's also re-jiggered its channel programs. Last March, CenturyLink rolled its Savvis Alliances Master Agent Program into CenturyLink Channel Alliance. And a month later, CenturyLink consolidated its national and international business markets group customers, Savvis customers and federal government customers into what became the Enterprise Markets Group.

More changes are still to come, CenturyLink's Wetzel said, but relative to the channel, they'll be for the better. Wetzel pledged that CenturyLink partners would see both product and services updates, as well as channel program expansion, throughout 2013.

On the product side, CenturyLink is making significant investments in SIP, cloud, colocation/hosting, network-based security, Ethernet and MPLS services. Behind that will come more programs to help partners sell those services, Wetzel said.

SavvisDirect, which CenturyLink announced in October as a new program for distributing cloud services such as virtual servers and SaaS applications, is one example.

Strategically, CenturyLink will deepen its focus on the national and, particularly, local markets, the latter an area Wetzel said CenturyLink has not engaged as effectively as it could.

Partners should also expect a major international expansion, Wetzel said. CenturyLink has 13 data centers worldwide and coming next will be more international products and more international channel expansion.

It's cloud, however, that remains the telco's top priority. Bob Hollander, CenturyLink senior vice president, sales, hosting solutions, said CenturyLink sits at an intersection where customer craving for hosted solutions is growing along with the types of solutions available, he said.

"Cloud has blossomed into a range of services offerings," Hollander said.