WT Business Beat

By Nick Wakeman

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Nick Wakeman

Welcome to today's telecom revolution

In the last few months, I’ve had the opportunity for some in-depth conversations with two leaders of the government telecom space: Kay Kapoor of AT&T Government Solutions and Diana Gowen, recently retired senior vice president and general manager of CenturyLink’s public sector business.

While the pair didn’t echo each other on every point, there were enough similarities to convince me that today’s telecom world is vastly different than it was just five years ago.

Both talked about the push for more commercial technologies in the government space, and how cloud computing and mobility are changing the kind of solutions customers are looking for.

The rumors this week that CenturyLink is eyeing a $5 billion deal for Rackspace to continue to expand its cloud computing capabilities is the latest development that shows the convergence of IT and communications that Kapoor and Gowen described to me is happening fast.

We should stop using the term IT and adopt ITC, according to Kapoor.

I think she’s right, though ITC doesn’t quite roll as easily off the tongue as IT.

Whether or not CenturyLink acquires Rackspace, the competitive landscape for telecom companies is very different, and it’ll be interesting how that change affects government procurements. I’m particularly thinking of the Network Services 2020 contract still under development by the General Services Administration. NS 2020 will be the successor to the current telecom contract Networx.

Both Gowen and Kapoor talked about companies such as Amazon, Microsoft and Google as competitors [as well as partners]. How will those companies play into the competition for NS 2020?

The earliest indications are that the traditional telecom companies will still have the advantage because of the infrastructure needed for billing, service offerings and the like. But there is potential for the large, non-traditional players to upset the apple cart. Maybe that will be a good thing.

Meanwhile, the network is only part of the equation. Growth and profits are in what rides on the network, not the network itself. How GSA works elements such as the cloud, mobility and security into NS 2020 remains to be seen.

But that’s where the most intense competition might be. And Kapoor and Gowen made it clear that is where the growth is for the traditional players as well.

Which brings me back to CenturyLink and Rackspace. The added cloud hosting capabilities make it a smart deal for CenturyLink, if they can pull it off.

But even if the acquisition falls apart, I look for CenturyLink, AT&T, Level-3, Verizon and the others to keep investing or risk being shunted off to the margins of the market.

Posted by Nick Wakeman on Sep 11, 2014 at 9:23 AM

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