Cisco and Unified Communications
Did MagicJack Lose It's Magic?

Level3 Buys Global Crossing

Image representing Level 3 as depicted in Crun...Image via CrunchBase

Today's announcement of Level3 buying GlobalCrossing is a big deal in telecom. Rather than rehash the very saliant points made by Stacey Higginbotham of GigaOm  let me go into some analysis:

Level3 picks up a ton of similar technology based capacity and routes for their network. Thus customers who have been using both Level3 and Global Crossing (like Google) now only have to work with one company. Where it's bad is the network buyer now has less choices, which means higher prices. However this also means that customers of the combined network can negotiate better against AT&T, BT, France Telecom and Telstra. It also makes Reliance GlobalComm a very interesting player to come out of their shell....as alternatives will still be sought. Bottom line is I expect more mergers.

The Level3 battle vs. Comcast will escalate. Comcast acquired NGT last year and NGT was one of the largest resellers of Level3. This buy means that the pursuit of the business market by Comcast just got stiffer as GC routes go where Level3's largely didn't. In many ways this purchase is better than the Wil-Tel acquisition.

The cloud is where things are going. Level3 brings their CDN and cloud app storage knowledge to Global Crossing's customers. In essence this may hurt companies like Akamai more than people realize at first as the customer using Global Crossing and Akamai may now want an all from one solutions provider. One area is conferencing, audio, video and web which Akamai provides.

This will likely slow down the amount of fiber Corning sells to Level3 but it will mean that others in the network game may have to start building more of their own network capacaity out.

Sales--if you're in sales with one of the two companies, it may be time to brush up your resume. Same with service and support. Mergers like this always take time, but in the end there are job cuts. Level3's past integration efforts with LookingGlass, Wil-Tel and other buys have always resulted in changes in people, at the top of the ladder and in the middle. 

Deals in progress. Obviously there will need to be regulatory approval. If you have a pending contract now's the time to look at pal Tony Greenberg's RAMPRATE and get some good advice on what to ask for and who to go with when it comes to IT sourcing. 

Bottom line..expect business to be business, unusual for a while.

 

 

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