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One analyst says look for the new CenturyLink to pass Verizon in enterprise services. Read our channel chief interview.

Edward Gately

November 1, 2017

10 Min Read
Business Arm Wrestling

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Edward Gately

A year in the making, CenturyLink‘s $34 billion acquisition of Level 3 Communications finally is complete, creating a networking services behemoth gunning for competing telcos all over the world.

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CenturyLink’s Lisa Miller

About 75 percent of CenturyLink’s core revenue will come from business customers, and nearly two-thirds of its core revenue will come from strategic services. Its network now connects more than 350 metropolitan areas with more than 100,000 fiber-enabled, on-net buildings, including 10,000 buildings in EMEA and Latin America.

Lisa Miller, CenturyLink’s president of wholesale, indirect channels and alliances, tells Channel Partners that CenturyLink and Level 3 partners, along with their customers, now have access to the “largest, most powerful global network, along with comprehensive services and technologies.”

“In the future, our partners will have more opportunities to grow their business with the expanded CenturyLink product portfolio — whether that’s cloud, security, etc.,” she said. “We’re now going to have a robust portfolio of network solutions and advanced IT services. But also we’re really focused on a differentiated customer experience. We want to be easy to do business with, and the strength of the new CenturyLink positions us really well for what our enterprise customers need today.”

Lynda Stadmueller, Frost & Sullivan research vice president, said the merger is going to propel the new CenturyLink as a “very strong contender to the big two: AT&T and Verizon.”

“In fact … in terms of overall network-services revenue, it could move ahead of Verizon and just follow AT&T,” she said. “And based on specific services, it will end up No. 1, 2 or 3 for pretty much a lot of the business services out there. We’re projecting that CenturyLink is going to move behind AT&T in enterprise services.”

CenturyLink is “really good” at acquiring other companies and has been able to quickly integrate them, Stadmeuller said.

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CenturyLink’s John DeLozier

“The company has a very well-established process where they’re able to very quickly not just do the technical cutovers, because that’s always a challenge, but their process in the past … is to almost immediately combine the teams to ensure that there is a shared ownership of the changes and bring out the best in everybody,” she said. 

In a Q&A with Channel Partners, John DeLozier, vice president of CenturyLink Channel Alliance, and Garrett Gee, Level 3’s vice president of indirect sales channel, talk about what’s in store for partners of both companies and the process for consolidation.

Channel Partners: What’s happening between now and Jan. 1 in terms of CenturyLink and Level 3 partners?

John DeLozier: Between now and Jan. 1, it’s really business as usual for us. We have a year to close out on the CenturyLink side, just like Garrett and team have a year to close out on the Level 3 side. So the best we can do for our partners is close out our year strong and be predictable in [doing that.]

Garrett Gee: Certainly we need to remain focused and keep the momentum that we have on both sides when we start to rationalize and look at consolidation of some of our practices and policies. But for right now and how the partners interact with us, it’s going to be very much the same for the remainder of the year.

CP: What will be the process and timeline for consolidating the two partner programs and partner communities?

JD: Our timeline is the timeline that works best for our partners. Obviously we have a lot of smart people working diligently on both sides of the house and all of our programs, our processes, our tools, the way we do business, etc., and so we won’t rush the field on anything. We’ll continue to take counsel from …

… our partners; their opinions count, they mean everything to us, and so we’ll factor that in and we’ll get things right and come back to them with something that utilizes the best practices from both organizations. We will take as much time as we need or we’ll go as fast as we need with regard to getting things right for our partners.

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CenturyLink’s Garrett Gee

GG: I think that there are some practices or processes that we can consolidate quickly, but we’re going to want to listen to our partners and get feedback from them during this transitional period, and take the time that we need, because there are certainly policies – for example, something like a partner agreement – that we can’t rush the field as it relates to that. We need to take our time and get it right the first time.

CP: What will be the channel leadership structure and how will that help partners?

GG: First of all, I’d like to say we’re really excited about the leadership team in general for the go-forward indirect team. With Lisa Miller a proven executive in this space leading the charge, and JD and I working in unison on specific objectives. I couldn’t think of a better way to face our partners in the market. So we’re elated on where this is going, and as it relates to the leadership team, we’re in the phase right now of building out that organization below us and I would say our strategy is to make sure we have a balanced team of CenturyLink folks as well as former Level 3 leaders so we can face the market as efficient[ly] as possible.

JD: Imagine if your fiercest competitor, your most competent competitor in the marketplace suddenly becomes your partner, and that is what’s happened with Garrett and I. We’ve been battling for a while now, and winning deals and making the marketplace even better for that effort, and now we get to partner up. So in addition to all the things he just said, from our boss to those who work for us, it’s really, really cool to be able to go to market now in a partnership with Garrett and attack, attack, attack. I feel sorry for those that come against us. We’re excited about it, and this leadership team is going to be second to none.

CP: Are your titles and roles going to change?

JD: Unofficially, of course, we’re both channel chiefs. What our leader, Lisa Miller, decided was, let’s utilize both of these guys in the the areas where they’re best suited, or at least play to our strengths. There is no better person in the field, in territory, running sales and leading the charge than Garrett. The guy knows how to close deals, he knows how to get things done; his background is in engineering, which by the way makes him extremely dangerous in sales. So for me, watching him do his thing in the field is incredible, and quite frankly critical to our success. On my side, she’s asked me to jump in with our top 25 partners and lead the strategic charge there. So I’m laying down the pathway for him and …

… the team to get things done, etc. We’re working with our biggest, our best, our brightest partners, etc., to forge ahead. So for us, yes, titles will change. I, in addition to the strategic partnerships, have our alliances group and Garrett leads the charge in sales. I don’t think the titles are critically important at this moment; we’ll be clear on that after the first of the year, but it will reflect our new jobs and our new focus.

CP: Can you give examples of new opportunities both immediately and in the long term for CenturyLink and Level 3 partners?

GG: CenturyLink now is certainly one of the world’s largest communication providers, and we’ve got an extensive global footprint and an even stronger local presence now, and I would say our team is really dedicated to delivering a better customer and partner experience than anybody else. And I would say the combination of our two talented workforces — if I [were] a partner, I would be getting really excited about that. And that’s something that is coming today. Certainly there [are] going to be additional communications and things that come along the way while we’re on this journey, but those data points I just provided, those are available to our partners and our customers effective today.

JD: I would just add to that we have a rifle-like focus on digital transformation and we couldn’t be more set up for our partners to be successful with us than we are. It’s one-stop shopping. Our partners can come to us and not only can we host all of their applications as the third-largest data center provider in the world, but we can manage their cloud environments, we can provide them network services, managed services and consulting, all of those things across the board. So really the one-stop shop idea with CenturyLink is dead-on, and we will take full advantage of that as we combine the power of these two companies moving forward.

CP: What are you hearing from partners? Do they have any concerns about what’s ahead in terms of consolidation?

JD: I think that anytime you have change, there’s a little bit of trepidation no matter who you are, where you are and what industry you’re in. But I will tell you the feedback from our partners in this particular scenario has been phenomenal. I can’t keep up with all the messages I’ve received via email, text, voice. It’s crazy how many of the partners are calling us and getting in touch with us to talk about how excited they are about this consolidation. The excitement in the marketplace is inspiring and we are hearing over and over again how excited the partners are, not only about the consolidation of the two companies, but the consolidation of all the leadership team and all the people.

GG: We’ve had the opportunity since this was announced over a year ago; we’re out in the field often meeting with our partners and trying to get feedback from them, and everything has been very, very positive — a tremendous amount of excitement on what we’re going to bring to the table as a combined entity. So we were prepared to …

… potentially head off some concerns and they haven’t been coming to us.

CP: What are you doing right now to prepare for what’s ahead with consolidation?

GG: A focus item for me will be working toward building a world-class team, and that all starts with culture. If we get the culture right and we integrate the two teams, then success will follow. That certainly is going to be a key focus, and then all of the tactical items come behind that, rules of engagement, go-to-market strategies, etc. But we’re really focused on building out our organizations and really paying a lot of attention to building a culture that breeds success here at CenturyLink.

CP: What are your goals for the first six months to a year with the combined company?

JD: Our current CEO, Glen Post, and our future CEO, Jeff Storey, have both said this publicly many times and today: It’s all about culture. If we get the culture right, we are going to succeed, and culture is based on the right people and the right teams. Internally speaking, our goals for sure are to get the culture right with the right people, and as we do that, it will bleed into processes, tooling, technologies, solutions, all those things that you would expect from this company as we move forward into the future.

GG: The only thing I would add there is ultimately we want to face our partners and our customers with an industry-leading program that makes our partners look at CenturyLink as their first choice for their customers and networking services. So that’s going to be at the center of everything that we’re doing, along with our partners and customers. So we’re going to be making decisions with that goal or that north star in mind.

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About the Author(s)

Edward Gately

Senior News Editor, Channel Futures

As news editor, Edward Gately covers cybersecurity, new channel programs and program changes, M&A and other IT channel trends. Prior to Informa, he spent 26 years as a newspaper journalist in Texas, Louisiana and Arizona.

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