Savvis Inc., a subsidiary of
CenturyLink, Inc.
(
CTL
), has recently unveiled its latest technological addition,
Symphony Cloud Storage. This new product is a cloud based
platform that offers unlimited date storage solution and
accessibility across the globe.
The cloud product has initially been launched in data centers
in London, Singapore, Toronto, Washington, D.C and California.
The service is currently available to selected Savvis clients,
but will be commercially accessible by early 2013.
The global market for cloud computing is on the rise and
steadily making a dominant position on the information technology
front. According to market reports, the global market of cloud is
moving at a cumulative growth rate of 30% and expected to hit
$270 billion by 2020. As a result, most of the technological
companies including telecommunications are considering it as a
potential future opportunity.
For carriers like CenturyLink, entering cloud marklet does not
only mean expanding its service portfolio but also extending its
reach beyond its domestic markets. We believe that CenturyLink is
gaining significant momentum in the enterprise market with the
introduction of Savvis' product lines. The acquisition of Savvis
in 2011 has resulted in revenue accretion and also expanded
CenturyLink's services beyond conventional market of core local
phone business.
CenturyLink currently has expanded its footprint in the
hosting managed cloud services business to 50 data centers in
North America, Europe and Asia. The company continues to expand
data centers this year with an aim to generate higher revenue
growth in managed hosting and cloud services.
However, stiff competition from other low cost telecom
operators like
LEAP Wireless International Inc.
(
LEAP
) and increased operating expenses resulting from the
acquisitions may impede the company's growth trajectory.
CenturyLink retains a Zacks #2 Rank, implying a short-term
(1-3 months) Buy rating. For the long term, we have a Neutral
recommendation on the stock.
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