CenturyLink Takes On Amazon in the Cloud

Eighteen months after buying cloud services provider Savvis (Nasdaq: SVVS), CenturyLink Inc. (NYSE: CTL) is launching a new business unit that will directly challenge Amazon Web Services LLC in the commodity cloud business.
savvisdirect was launched last week, offering self-service pay-as-you-go options for software, infrastructure, platform or storage clouds, all available in under 10 minutes, according to the company.
Savvisdirect was built from the ground up during the past year. It's a combination of CenturyLink's fiber optic network resources and data center infrastructure front-ended with a user interface that draws on Savvis's IT and cloud expertise, says Andrew Higgebotham, CEO of savvisdirect. Its services will be “competitively priced” with existing commodity cloud offers.
"This is part of a plan of both management teams and a part of the acquisition strategy to go do this," Higgebotham says. The move reflects work within CenturyLink to be more focused on IT services and to realign its sales force to sell more than network services into the broader business community.
To compete with Amazon and others that have been in the commodity cloud business much longer, savvisdirect built its user interface to be simple, robust, offer more features and provide pricing transparency, says product manager Martin Capurro.
The service offers a catalog of standard IT apps -- Microsoft Exchange, Sharepoint and more -- on a one-click basis, along with compute, storage and other standard cloud services. It also has click-to-chat with both sales and support capabilities.
"We know what people have been looking for in terms of service and support and we are making it easy for them to get that," Capurro says.
Savvisdirect is expected to be the gateway service for a more extensive range of Savvis cloud offerings, but that's not its main function. "We mostly see this as a way to reach a broader market," Higgebotham says. "CenturyLink has 1.7 million SMBs on its network and we think we can reach many more of those."
Pricing is one area where savvisdirect will look to compete, on both transparency and overall cost. Higgebotham says his firm's analysis of the market has found that many cloud service providers offer initial services that look inexpensive but layer on charges for add-ons such as email that can create "sticker shock" for small businesses that were looking to save money from using cloud services.
"We are very transparent in our pricing and, in our analysis. We are right out there competing with all of the market," he adds. "We think we have a unique value -- sales, scale and reputation."
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