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CenturyLink Opens News Data Center in Toronto to Boost Cloud

Zacks Equity Research

CenturyLink, Inc. (CTL) has announced the opening of a new data center in the greater Toronto area. The new facility will cater to the growing demand for secure colocation, managed hosting and cloud services in the region.

Currently, the new data center is the company’s second facility in the Toronto region and the fourth in Canada. We believe the new data center will allow the company to tap opportunities in the enterprise business and significantly promote the cloud products offered by the company.

CenturyLink is on an expansion spree with regard to its data centers. With around 57 data centers spanning across North America, Europe and Asia, management aims to capture more businesses by increasing its data center wings in strategically suitable and secure locations, boosting interconnectivity within the company’s core operations. It expects to deploy advanced cloud node to six data centers by 2014-end.

The company has also acquired public cloud services provider, Tier 3, in order to boost its cloud development and data hosting capabilities. CenturyLink believes Tier 3’s public multi-tenant cloud platform, coupled with its network and data center footprint and managed services team, will contribute strongly to growth going forward.

Moving on, CenturyLink is keen to build infrastructure to meet the growing needs for cloud hosting and colocation services. Further, the company’s strong network capabilities, integrated hosting and network solutions will promote growth in the cloud business.

CenturyLink is also concentrating on expanding the business base of its subsidiary Savvis, which has contributed substantially in uplifting the performance level of the former through its cloud computing and managed hosting solutions for enterprises. In this regard, CenturyLink acquired Platform-as-a-Service (PaaS) provider – AppFog Inc.

This acquired unit – which extends custom-made PaaS capabilities to software developers and public cloud services through www.appfog.com – will augment the product portfolio of Savvis. We view this acquisition as a growth driver for CenturyLink as AppFog's high-quality PaaS offerings along with Savvis' industry-leading infrastructure base will likely create a secure and reliable network for developing applications in the cloud.

Currently, CenturyLink has a Zacks Rank #3 (Hold).

Other Stocks

Better-ranked wireless stocks that warrant a look include RF Micro Devices Inc. (RFMD), Meru Networks, Inc. (MERU) and Ruckus Wireless, Inc. (RKUS). While RF Micro Devices sports a Zacks Rank #1 (Strong Buy), Meru Networks and Ruckus Wireless carry a Zacks Rank #2 (Buy).

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