Monday, August 24, 2015

Windstream Selling Data Center Business

In the data center business, scale matters. Even if data centers are the new central offices, in terms of aggregating edge traffic for transport across the wide area networks, smaller providers competing against Amazon Web Services, Microsoft and Google, plus other providers, will find it tough to compete.

So it is that Windstream is pondering a sale of the data center business  it purchased in 2010.

That will free up capital Windstream can deploy elsewhere, but might also dent its enterprise revenue streams. Windstream earns nearly 80 percent of its revenue from the business segment.

In its second quarter of 2015, Windstream had revenues of $1.4 billion. Consumer revenues represented just $314 million--about 22 percent--of total revenues.

Since about 2010, both Windstream and similar profile service provider Frontier Communications have earned most of their money in the business segment, despite the continuing preponderance of consumer accounts.

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