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PAETEC Sharpens its Cloud Vision
| May 25, 2011 | Data Center Services
| Analyst: Amy Larsen DeCarlo
Event Summary
May 23, 2011 - PAETEC announced an expanded portfolio of cloud-based products and the planned buildout of new data centers coast-to-coast. As part of its overall cloud and data center strategy, PAETEC plans to add 13 data centers by the end of 2012 to its current set of seven centers. Additionally, the company released new cloud-based products and enhanced existing solutions that include multi-tenant and dedicated virtual hosted offers as well as on-demand storage and hosted Exchange services.
Quick Take
Analytical Summary
• Current Perspective: Positive on PAETEC’s newly expanded and enhanced cloud services portfolio because the company now has a core set of virtualized solutions that map well to the requirements of businesses that want more flexible and economical IT solutions. PAETEC’s cloud solution set, along with its announced plans to further build out its already significant data center facilities footprint to support expanded delivery on-demand services, should meet a wide-range of business needs.
• Vendor Importance: High to PAETEC, because the company needed to correct a weakness in its data center services strategy which up to this point lacked differentiated on-demand services. Business customers – particularly mid-sized companies that are such a key part of PAETEC’s installed base – are increasingly looking for providers to deliver business-class virtualized services in areas such as messaging and collaboration and storage. The new services set and planned data center services expansion will help PAETEC grow its average contract size and capture new clients.
• Market Impact: Moderate on the cloud services sector, because over time the enhanced services set and expanded facilities footprint could make PAETEC a much more significant national competitor than the company is today in the data center services space.
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PAETEC Launches Powerful Cloud Computing Portfolio and Nationwide Data Center Expansion
Data center initiatives are designed to meet rapidly growing cloud market
FAIRPORT, N.Y. - May 23, 2011 (PAETEC Holding Corp. (NASDAQ GS: PAET), a nationwide provider of comprehensive communications solutions, today announced the launch of an expanded portfolio of cloud-based products and the planned deployment of new data centers coast-to-coast.
As part of its overall cloud and data center strategy and leveraging its breadth and depth of experience in the cloud and data center space, PAETEC plans to add 13 data centers coast-to-coast by the end of 2012 to its current set of seven centers which will result in the company operating 20 centers nationwide. Additionally, the company released new cloud-based products and enhanced existing products for businesses including Dedicated Server, Virtual Server, Managed Storage, and Hosted Exchange. Cloud-based services refer to applications being housed, managed, and maintained in highly secure and fault-tolerant data centers, relieving day-to-day responsibilities from IT staffs allowing them to focus on more strategic initiatives.
"With the advent of high-speed networks and continued migration of network intelligence into the cloud, the need for these network-based services has increased dramatically and we see that trend continuing into the future," said Arunas Chesonis, chairman and CEO of PAETEC. "Given our historical expertise, nationwide network, deep customer base, and skilled employee base, I believe PAETEC, unlike any other provider, will be extremely well positioned to serve mid-sized and enterprise organizations."
The research firm Current Analysis also sees the distinct trend in cloud computing. "The industry-wide adoption of cloud computing is increasing at a rapid clip," said Amy DeCarlo, principal analyst, security and data center services at Current Analysis. "We expect companies like PAETEC that have comprehensive cloud strategies to be well prepared to meet the rising demand of these types of network services."
PAETEC's cloud solutions include:
- Virtual Server to provide businesses the ability to buy computing and associated storage on a per-logical server basis for a monthly fee, rather than purchasing their own physical server requiring ongoing upgrades and maintenance. A Virtual Server gives businesses on-demand scalability to meet fluctuating business requirements, as well a promoting a geographically diverse presence for disaster recovery
- Dedicated Server providing turn-key implementations that reside in PAETEC's enterprise-class data centers. PAETEC's service enables customers the option to make the transition to virtualization and cloud computing at their own pace, without the burden of new infrastructure deployment or specialized design to support virtualization.
- Managed Storage offering an advanced, multi-tenant storage platform with the ability to purchase storage on demand and on a granular basis as required.
- Hosted Exchange allowing a business to access the power and simplicity of a Microsoft Exchange E-Mail server with PAETEC technicians and engineers available for support.
With the rapid growth in demand for cloud computing services, PAETEC sees a particularly strong opportunity to serve mid-market customers while building on its already strong portfolio of cloud computing services. "Looking at the products and services that were already available in the market, we saw very strong solutions for small business and startups and increasing competition for the large enterprise but very little that was appropriate for the needs of our mid-market customers," said John Chapman, chief marketing officer of PAETEC. "Unlike other cloud infrastructure providers focused on leveraging commodity hardware, we believe the cloud data center must offer the same performance and reliability of which our customers have become accustomed."
PAETEC currently has data centers in Andover, Mass., Bethlehem and Conshohocken, Pa., Richmond, Va., Milwaukee, Wis., Houston, Tex., and Phoenix, Ariz.
In 2011, the company has plans to expand to McLean, Va., Tampa, Fla., Columbus, Ohio, Detroit, Mich., and Charlotte, N.C. In 2012, data centers are also planned for Dallas, Tex., Chicago, Ill., Northern California, Rochester, N.Y., Pittsburgh, Pa., Denver, Co., Atlanta, Ga. and a location in the Pacific Northwest.
About PAETEC
PAETEC (NASDAQ: PAET), a FORTUNE 1000 company, is personalizing business communications for businesses, enterprise organizations and institutions across the United States. We offer a comprehensive suite of IP, voice, data, and Internet services, as well as enterprise communications management software, network security solutions, CPE, and managed services. For more information, visit www.paetec.com.
Source: PAETEC
