Interoute's acquisition of Easynet was a game-changing strategic move that made a real difference to its channel ambitions, according to VP for Strategic Partners Neil Downing.
The decision to acquire European managed services provider Easynet in September last year for £402 million was inspired and gave Interoute an opportunity to push for a stronger channel strategy. The move also offered the chance to make progress on measures such as widening the proposition and onboarding more scale, global reach, skills and new capabilities. The acquisition also expanded Interoute's networked cloud and communications services to national and multi-national enterprises across the world.
"Our biggest opportunity is to explore the channel more with our wider proposition and bring partners with us on this journey," stated Downing. "The potential is clear. We have a big partner business already and can grow it even more through the wider portfolio and increased global reach we now have."
Interoute provides a range of unified connectivity, computing and communications products and services to multi-national and national enterprises, such as UEFA, the European Space Agency, SCA and Saxo Bank, global telecommunications operators and Internet content providers. The company's commercial beginnings were born out of a vision to connect the business hubs of Europe with the continent's largest, fastest and most advanced fibre optic network which was completed in 2002. Today, the network connects nearly 250 data centres and colocation facilities across Europe, while interconnecting America, Africa and Asia.
Interoute's channel success rests in large part on Downing's industry experience, insights and know-how. He first entered the comms industry after graduating, joining BT as an engineer in 1996 but he quickly moved into commercial roles having shown a deep interest in the profile of buyers and their purchasing habits. Downing has always worked in the telecoms sector and attributes his flair for business to his father who ran his own transport company and made a good living in a high volume, low margin business with demanding customers and time scales. "This maps well to my experience of the telco industry," said Downing. "Despite being dyslexic my father was successful and could spot a margin at 100 yards."
Downing junior also knows how to spot an opportunity and joined Interoute in 2005. "Interoute had strong revenues combined with a start-up culture where costs were meticulously managed and all roles focused on revenue growth," he commented. "The enterprise market was still in its early days for us, but we could see massive potential and were committed to changing our structure and products to maximise the opportunity."
Interoute was originally designed to serve European telecoms operators with high capacity, big bandwidth services and it continues to support the major telecoms operators in Europe. But as demand for digital communications has grown, Interoute expanded its portfolio and expertise to provide international enterprises with infrastructure products, managed solutions and applications.
Key turning points for the company include the launch of Interoute Virtual Data Centre (VDC) in 2012. However, 2004 was also a pivotal year as Interoute moved away from being simply the carrier's carrier to provide enterprise services (now responsible for more than 70 per cent of revenue). This was followed in 2005 by the acquisition of VIA Networks which formed the basis for VDC. The launch of Interoute Cloud Connect in May 2015 was followed by the completion of a fully meshed global network with two new diverse network routes between Los Angeles, Hong Kong and Singapore going live in August 2015. "The growth of VDC has been an important part of our portfolio development, allowing Interoute to capitalise on the Infrastructure as a Service (IaaS) market by offering a flexible, scalable platform that customers can manage themselves," commented Downing.
Interoute's network connects 132 countries and includes 24 metropolitan networks in Europe's main business hubs and 17 VDC zones across Europe, North America and Asia. "Interoute is continually growing both its operational presence and global presence," added Downing. "Expect more announcements around VDC zones in the near future. The market is constantly evolving so we have to move with it. We are also doing a lot of work in security, but have the core blocks required by most resellers."
Partners are a key focus for Interoute's proposition, enabling them to provide platforms and tools to add value. "Organisations are under increasing pressure to provide feature rich services and Interoute's software defined services give partners the flexibility to buy only what they need, then evolve and scale with the customer," added Downing. "Many resellers or SIs focus on connectivity-based services but the market is changing and moving to the cloud. While connectivity is important, Software Defined Networking is disruptive and has the potential to disintermediate this market, so SIs and VARs should be looking at more flexible models and offering a more fully formed ICT infrastructure. They may not be able to separate voice, connectivity and apps in future propositions."
Downing's main challenge is ensuring that partners understand Interoute's wider proposition and how it matches their ambitions. "We are constantly innovating and developing new products and services for the channel," he explained. "Our networked cloud platform VDC has expanded to three new zones this year and gives channel partners one of Europe's largest IaaS cloud infrastructure platforms they can easily add a service wrap too.
"This is important because the sand is shifting for customers in terms of what and how they consume, and resellers need to respond to this change and evolve their portfolios. As well as the cloud there is a rise in demand for network integration. We help customers to overcome the big challenge of integrating existing legacy IT with new digital business application development. Another area of interest is how software defined Wide Area Networks (WANs) are evolving along with how people buy networking services."
Not surprisingly, Downing defines Interoute's culture as 'European and collaborative' combined with a focus on accountability. "We're responsible for a journey involving investment, spend and effort," he stated. "This is something that comes from management and permeates down, enabling us to change our culture and skills to support customers in a different way. We see Interoute delivering combined communications, compute and connectivity through a platform defined by customers offering as much control as they need. This will resonate with the market as Interoute can provide the infrastructure and ecosystem, with partners delivering around that proposition."•