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January 2016

Connectivity as a Service: Providing Last Mile Access to the Cloud with Private Networks

Connectivity as a Service: Providing Last Mile Access to the Cloud with Private Networks

Cloud infrastructure is out there.  And neutral data centers — massive and small — are scattered in cities across the planet.  But the cloud revolution can’t leap to the next level till “last mile” connectivity issues are solved.

The irony is that last mile network and facilities are globally available.  In the U.S. market, for instance, hundreds of service providers offer access facilities connecting central offices and data centers on a wholesale basis.

Trouble is, today there’s no industry standard API or common set of processes these service providers follow, so ordering access circuits and services across multiple providers is spotty and inefficient at best.

Happily a better solution — connectivity-as-service — has arrived from firms such as Global Capacity.  The focus of these firms is pure access — how to get service from the building location to the actual destination and do it for all types of customers: cloud application providers, enterprises, small business, and telecoms.

So joining us now to explain the business model of these access specialty firms is Mary Stanhope, Global Capacity’s VP of Marketing.

Dan Baker, Editor, Telexchange: Mary, the first thing that strikes me about Global Capacity is that the way you go to market is not much different than that of a telecom service provider.

Mary Stanhope: Yes, many consider us a CLEC, even though we mostly use facilities provided by someone else.

Our business is to provide access network connectivity.  By putting our POPs in key data centers and central offices and then interconnecting over 250 suppliers, we connect anywhere — cable to ILECS, Fiber Providers to CLECs, etc.  We basically manage a network of networks.

Yet we’re not really a carrier.  We are more like an Uber or AirBnB — someone who creates a transparent environment that connects buyers and sellers more simply and efficiently.

It comes down to empowering the customer at their specific location, enabling the applications they are using and connecting to their destination.  We help them make informed decisions by giving them the price points, the capacity, the delivery intervals, and also the SLAs.

Now it’s not a pure resale model.  We will go in very opportunistically and source managed and dark fiber to connect where there is demand.  In fact last year we lit seven metro rings that connected many of the carrier hotels, data centers and ILEC LSOs that we were getting demand to and from.

And then on top of it all we built a Marketplace application that allows our customers to type in an address and we’ll push back to them all the products we have at that address.  And it could be Ethernet, fiber, internet, broadband, cable — you name it.

Up to now, the connectivity market has not been very transparent.  The best option was to find someone who collected all the information about available circuits and allowed you to view them through a portal.

Yes, these portals allowed you to collect a lot of useful information on what’s available.  However, databases are only as good as how updated the information is within them.

Even though these information portals have been out there, they didn’t really drive interconnect as you’d expect.  Take a look at the Ethernet exchanges that are out there — very popular a few years ago, where buyers and sellers connected and researched each other — but there was only low volume.

What was missing was the element of completing the transaction.  And that’s one of the things we do.  The customer puts in an address and all the destinations including data centers and cloud service providers we serve are in the system and they can immediately see all the options they have to connect.

So you can not only find the network access facilities you need, but you can actually hit the BUY button and purchase them.  And that’s what we do, and we provide the estimate on when it can actually be delivered and what the SLA is.

The other big benefit is contracting with a single company — with one SLA, one contract, and one bill you can turn to.  Today, the management of off-net and coordinating multiple vendors is a big hassle.  Where it gets really tough is in the coordination of provisioning and on-going service management — making sure services hit their SLAs.  Reconciling the billing from multiple providers is another headache.

Now since we are an aggregator of all sorts of off-net facilities, circuits and services; that gives us a big advantage in delivering a more valuable service.  Our aggregation points and the monitoring equipment actually allow us to manage off-net circuits and services in an on-net way — with SLAs and intervals on top.

And the secret, of course, is our strong service delivery and provisioning teams who work with the underlying carriers.

What customer categories do you serve?  Can you break that out for us a bit?

Sure, our customers are generally of three types: providers who wholesale from us, medium businesses, and ASP cloud providers.

Our largest business segment today is wholesaling to cable companies, national service providers, managed service providers, and wireless providers.  And we either extend the reach of a cable or fiber company, or fill in the gaps for a national service provider like AT&T.

Another customer segment is medium businesses.  When we acquired MegaPath Network Service in 2015, we acquired 15,000 medium businesses.  And those accounts are handled in partnership with some 250 agents and master agents.  Much of that business is selling traditional broadband, DIA and private line services.  And because it’s indirect, you don’t normally hear Global Capacity associated with that business, because it’s done on behalf of our partners such as MegaPath, Earthlink, and Granite Telecommunications.

The final and fastest growing segment is our business services group focused on application, over the top, and cloud service providers.  What we do there is jointly sell the circuit that delivers the application — because the customer really needs both.  So we have customers like 8x8, Mindshift and Thinking Phones.

They bring opportunities to us.  Today most of those guys, particularly the cloud service providers like Google and AWS, aren’t interested in buying the circuit and bundling it.  So it’s a joint sale.  We become the carrier of record for that service.

Can you give me an idea who these ASP cloud providers are?

Well, one customer who has been with us a while is Cerner Corporation.

Cerner, a global health care IT company, focuses on optimizing care delivery for health care organizations around the world.  And they partner with us to deploy Cerner Skybox Connect, a high availability private network for the health care industry.  Global Capacity presented a new network design that lowered operating costs while providing Cerner clients access to a more cost-effective and efficient comms network that enabled the way hospitals, health care professionals, and service providers work together.  From multiple data centers they provide a multi-point private network with over 1,500 local access connections out to these end customers.

We know there are many more ASPs coming into the market who are like that.  They are building applications in the cloud that will need to connect.  And integral to their service success is connecting private lines out to the end customer.

As the business world moves away from the Internet to a more secure private line service for cloud applications and bandwidth demand often goes up, we want to be there.

So that’s where the sweet spot is: partnering with these cloud and application service providers, providing them the network access and then allowing them to aggregate to their service cloud in third party data centers.

What’s your relationship with the data center providers like Equinix and Telx?

The majority of our access connections are 1 Gig and down, but we work with Equinix, for example, to connect enterprises to Amazon Web Services (AWS) or Google Cloud Platform for the 1 Gig and 10 Gig customers.  Customers like that will usually want to go with a direct connect instead of aggregating through a cloud exchange, so Equinix introduces those kinds of prospects to us.

So Equinix realizes that anything that helps close the deal for the enterprise customer is great business for them.  That’s why we complement each other.  And we’ll jointly close those deals.  They get the data center piece of the deal and we get the network connectivity side.

So the business of data center guys like Equinix and Telx is very complementary to what we do.  In fact, our aggregation points are inside their data centers.  These are the high demand locations our customers want to connect to.

Usually the data center players focus on managing connectivity inside their data centers.  They supply businesses with a catalog of carriers who connect outside their data centers, but that’s where they stop.  They really don’t get involved in the complexity of access connectivity.  But we do.

They have a business platform that aggregates cross connect and cloud services inside the data center.  We’ve got a platform that connects access and network circuits.  And by putting those two together you’ve got a full business service solution.

What do you think future connectivity for enterprise customers will look like?

Well, we think there’s a lot of opportunity around serving the ecosystem of application and cloud service providers who are reaching out to the enterprise customers.

Now one of the challenges is enabling the end customer to feel like they can manage each service as if it’s their own.  Remember, the IT guys in the enterprise used to manage it all in-house and even as they move to the cloud, they still want a measure of control.

So as Service Providers we need to continue to improve letting the enterprise know the status of what’s happening with their networks and manage their service.  It’s about being more transparent no matter the location, destination, or network.  And that will come as network management systems and software defined networks mature.  Another driver will be greater interoperability between network and back office systems.  Hybird or a network of networks need to work as one.

Long range, service providers will need to feed our information into the end customer’s dashboard.  This will become table stakes.  And for that to happen, their systems need to talk to our systems.  Or at least share information with a neutral third party perhaps.  So lots of work ahead.

Thanks for this highly interesting briefing.  It’s easy to see why companies like Global Capacity will be pivotal to pushing the cloud revolution forward.

Copyright 2016 Telexchange Journal


About the Expert

Mary Stanhope

Mary Stanhope

Mary Stanhope is the founder and principal consultant at iMarket2, specializing in go-to-market strategy, ecosystem development and M&A due diligence.  Mary brings over 20 years of channel and market strategy, business development and customer experience to the industry working with organizations that include Connected2Fiber, ARMdcs, CloudScale365, NEDAS, Global Capacity, RCN Metro, Sema Group, Atos Origin and Schlumberger.

Mary is recognized by CRN’s Top Women in the Channel, Global Telecom Business’s 50 Women to Watch in Communication and Fierce Telecom’s Top 10 Wired Women.  She holds a BA from Syracuse University and professional graduate certificate from Harvard.   Contact Mary via

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