No one has yet managed to unseat Amazon Web Services (AWS) from its lofty cloud perch. Fortunately for CenturyLink, it may not need to try.
As reported by Bloomberg, CenturyLink is circling Rackspace to add the service-centric cloud provider to its portfolio of cloud services, including Savvis, AppFog, andTier3. With competition for cloud-centric developers fierce, it's unlikely that CenturyLink will make much of a mark with Global 2000 companies interested in moving data center workloads to the public cloud.
Where it can shine, however, is by leveraging its existing relationships with local IT shops that lack the sophistication to jump on the AWS bandwagon.
CenturyLink: Developer darling?
Not everyone agrees. Eric Knorr of InfoWorld digs into CenturyLink's cloud strategy and concludes that it "could dramatically accelerate large-scale enterprise application deployment in the cloud" by, for example, making it "absurdly easy to build and share multicontainer applications based on Docker."
The technology sounds cool... but it doesn't sound like a compelling differentiator.
After all, it's open source. When AWS likes open-source technology, it takes it. MySQL was doing nearly $100 million in sales at the time of its acquisition by Sun. AWS made much more than that with its RDS service built on MySQL. If CenturyLink's Panamax resonates with developers, it is AWS, not CenturyLink, that will disproportionately benefit, because it already has the distribution that CenturyLink craves.
Speaking of developers, CenturyLink likes to talk about them, but if you peruse its website, it clearly doesn't know how to talk to them. It sounds like it's talking to the IT department which, of course, is the audience it knows best.
CenturyLink's cloud website (Figure A) looks exactly like what it is: a new line of business for a legacy telecommunications provider, which is exactly how CenturyLink should position itself.
CenturyLink's cloud website.
Your neighborhood cloud provider
Let's face it: CenturyLink is never going to be able to acquire its way to having the technical prowess of a Google or Amazon. These are companies that were born on the web and understand better than anyone else how to build and scale cloud businesses. CenturyLink can't compete with that.
Nor does buying Rackspace help. As cloud analyst Ben Kepes notes, CenturyLink will never be able to match the infrastructure heft of a Google or AWS:
"Part of the issue Rackspace has had trying to compete with larger vendors is its model. Rackspace has tried to differentiate itself based on its high levels of support — unfortunately support has proven to be a difficult thing to scale. Add to that the fact that Rackspace's competitors are investing many billions of dollars to build out their infrastructure footprint and that Rackspace (and even CenturyLink) would find that sort of expenditure difficult, and you have a difficult situation."
Nor can it compete with Microsoft's enterprise footprint. CenturyLink claims 1,000 enterprise customers for its co-location and managed hosting services. That's awesome. Truly. But it's a pale shade of the millions of customers Microsoft has. Microsoft already owns the enterprise. Now it can lead the wary to the cloud.
But CenturyLink has something that none of these other cloud giants has: local relationships with businesses.
As much as Andrew Higginbotham, senior vice president of cloud and technology at CenturyLink Technology Solutions, may want to paint big numbers about CenturyLink's cloud business, the only number that really matters is your local zip code. Odds are, CenturyLink has a salesforce there, and odds are quite good that they've already called on your IT department for something in the last year.
AWS and Google are faceless entities that exist on the web. Microsoft is more personable because it works through a host of channel partners. But none can truly match CenturyLink's one-to-one, local sales approach.
This isn't something to downplay or avoid. It's something to celebrate. We may want impersonal cloud resources, but for many businesses, they'd prefer to get those from someone local that they trust.
Matt Asay is a veteran technology columnist who has written for CNET, ReadWrite, and other tech media. Asay has also held a variety of executive roles with leading mobile and big data software companies.