Windstream to ax 400 jobs, expects $20M in annual savings

February 24, 2014 | By Sean Buckley

Windstream (Nasdaq: WIN) is laying off about 400 employees by March in an effort it says will increase its operational efficiency as it continues to sharpen its focus on becoming a bigger player in the enterprise services space.

About 175 workers' jobs were eliminated through what it said was a "voluntary separation initiative."

"We continue to invest in our growth areas, primarily business services and consumer broadband, and at the same time we must maintain a disciplined approach to expense management," said Jeff Gardner, president and CEO of Windstream, in a release.

By making these job cuts Windstream expects to save about $20 million in annual costs. It also expects to incur a $9 million to $10 million charge in the first quarter of 2014 to pay severance to employees that were affected by the company's move.

This is not the only time the telco has had to conduct layoffs. In 2012, it cut between 375-400 management positions, which translated into almost 3 percent of its total 14,500 workforce. It also laid off 280 employees following its acquisition of PAETEC in 2011.

Regardless of this near-term setback, Windstream continues to make progress in growing its presence in the business services segment.

While it won't release its fourth-quarter 2013 earnings until Feb. 27, in the third quarter of 2013 business revenues rose 1 percent year-over-year to $916 million. IP-based voice and data, dedicated Internet access (DIA) and data center services were $407 million, up 5 percent year-over-year.

Ten reasons Google should own Verizon by 2017

February 20, 2014 | By Steve Donohue

I began contemplating the possibility of a Google (Nasdaq: GOOG) acquisition of Verizon's (NYSE: VZ) wireline business last September, after Verizon said that it would buy Vodafone's stake in Verizon Wireless for $130 billion. Google's announcement Thursday that it is looking at expanding Google Fiber to 37 additional cities where its primary competitors would be Comcast (Nasdaq: CMCSA), Time Warner Cable (NYSE: TWC) and AT&T (NYSE: T) left me wondering if Google could be on the path to buying not only Verizon's FiOS business, which doesn't operate in any of those 37 cities, but the entire company, including Verizon Wireless.

A Google-Verizon marriage would be the largest corporate merger ever. The companies had a combined market cap of $537 billion at Wednesday's market close. It would dwarf the $164 billion AOL-Time Warner Inc. merger in 2000, and the $183 billion acquisition Vodafone 

AirTouch closed that year of German telephone and Internet provider Mannesmann. There was buzz about a potential Google-Verizon merger in 2009, when the companies released a joint policy statement that detailed a shared vision for network neutrality. I have no idea if Google and Verizon are discussing a merger. But here are 10 points to consider, including reasons why the deal makes sense and signs that it could actually happen.

No Google Fiber-FiOS overlap
The cities Google said on Wednesday that is exploring for a Google Fiber expansion don't include a single FiOS market. If Google expands to all 37 markets, it would challenge Comcast and AT&T in Georgia, AT&T and Time Warner Cable in parts of Colorado and North Carolina, Cox Communications in Arizona, and Comcast in parts of California, Oregon, Tennessee and Utah.

Ubiquitous and affordable broadband
A Google-Verizon merger could help deliver affordable high-speed Internet service through both wired and wireless networks. It would help the United States keep pace with South Korea, Japan, and other countries where faster and more affordable Internet access is available. It would help President Obama achieve his goal of seeing affordable broadband access available nationwide.

Verizon already offers FiOS TV and Internet in 16 states, including parts of New York, California, Texas, Florida, Pennsylvania and New Jersey. Google could rapidly expand Google Fiber by upgrading the fiber-to-the-premises (FTTP) network that delivers FiOS. A merger would also appease consumers in dozens of cities that have complained about Verizon's decision in 2010 to halt its FiOS expansion.

Competition for Comcast, Time Warner Cable
A Google-Verizon merger could reduce concerns about Comcast's planned merger with Time Warner Cable hurting broadband competition. Overbuilds of cable operators by Verizon and AT&T haven't resulted in reduced broadband prices. But Google's announcement last year that it would expand to Provo prompted Comcast to offer faster Internet tiers with better pricing, including a $120 monthly triple-play that includes a 105 Mbps Internet connection.

In addition to offering consumers in the Kansas City area a $120 monthly pay TV and 1-Gig Internet bundle, or a $70 monthly 1-Gig standalone service, Google offers a free 5 Mpbs service to any consumer within its footprint who is willing to pay an installation fee. Google would likely agree to a merger condition that would require it to offer a free wideband Internet tier. And with Verizon's targeted advertising technology and wireless assets, it could make a profit from offering low-priced or even free broadband tiers.

Reduced programming costs
Google and Verizon wouldn't need to hammer cable networks and broadcasters for volume discounts in order to reduce the cost of pay TV programming packages. Instead, the companies could cut subscription prices by taking advantage of targeted advertising technology that would allow them to deliver relevant ads to viewers watching programming on TV, tablets, smartphones and other IP-connected devices.

In December, Verizon CEO Lowell McAdam predicted at a Goldman Sachs conference that some content owners would subsidize wireless data plans, similar to the way companies pay the costs of toll-free 800 phone numbers.

Earlier this month, we ran a story about a recent Verizon patent application that detailed how it may be able to offer subscribers discounts on phone and pay TV services, along with free pay-per-view movies, if they agreed to allow media buyers to deliver ads to the home screens of mobile devices. In 2012, we wrote about a Verizon targeted advertising patent application that showed how it could deliver ads to viewers based on information collected from infrared cameras and microphones in subscriber homes that could detect conversations, people, objects and even animals that are near a TV. Google and Verizon could make those next-generation concepts a reality. 

Improved home automation
It may only be a coincidence that a few weeks after Google announced a $3.2 billion deal to acquire home automation device provider Nest Labs, Verizon confirmed that it has stopped offering Verizon Home Monitoring and Control to FiOS subscribers. "We are revisiting the service to more accurately reflect our vision for the connected home," Verizon spokesman John Columbus said. Could that vision include the integration of devices from Nest?

Telemedicine and telehealth services
Verizon and Google have both expressed interest in offering telemedicine and telehealth services. A merger could move concepts that are currently being tested in laboratories into the homes of millions of Americans, and help President Obama achieve the goals outlined in the Patient Protection and Affordable Care Act of 2010, which is better known as Obamacare.

Virtual cable
Industry observers suspect that both Verizon and Google are preparing to launch virtual pay TV platforms. Google would benefit from Verizon's recent purchase of Intel's virtual cable technology, and Google has the Internet advertising capabilities to make the concept of a virtual MVPD (multichannel video programming distributor) profitable for both distributors and programmers.

Shared vision for network neutrality
Google and Verizon showed in October 2009 that they are on the same page when it comes to network neutrality when they released a set of principles for an open Internet. While Verizon sued the FCC after it implemented network neutrality rules, the company demonstrated in its policy statement with Google that it does support the concept of "new, enforceable prohibition against discriminatory practices."

Support in Washington
Under President Obama, the Department of Justice approved Comcast's acquisition of NBCUniversal in 2011. It also gave the green light to a spectrum, marketing and innovation deal that Verizon struck with Comcast, Time Warner Cable and Bright House Networks in 2011. A Google-Verizon merger could win support in Washington if the companies commit to offering affordable broadband and pay TV programming. The deal could make the United States the worldwide leader in broadband, and it would be part of the legacy of President Obama. Google and Verizon may have a better chance of wining approval for a merger under the current administration. That's why it would make sense to push for closing the deal before January 2017, when President Obama completes his second term.

Merger would drive needed consolidation

There's no doubt that a Google-Verizon merger would be controversial, and spark concerns about competition. But the deal could also rapidly accelerate major telecom consolidation that would make cable and telephone rivals stronger. A Google-Verizon merger could result in Comcast buying not just Time Warner Cable, but Cablevision and several other major MSOs. It could also spark mergers between other wireless carriers. The end result could be stronger wireless and wireline broadband providers who could drive broadband nationwide, and help the United States compete on a global basis.--Steve

FCC to rework existing net neutrality rules, won't appeal Verizon ruling

February 19, 2014 | By Sean Buckley

FCC Chairman Tom Wheeler plans to craft a new set of net neutrality rules that will prohibit broadband providers from throttling bandwidth or blocking Internet content from over-the-top providers like Netflix of Amazon, reports The Washington Post.

The regulator won't appeal the ruling by United States Court of Appeals for the District of Columbia last month that rejected a previous version of these rules. In its ruling, the court said that the FCC did not have the legal authority to implement the regulations it proposed in 2011, which were challenged in a lawsuit filed by Verizon Communications.

While the ruling was a loss for the regulator, it did give it the option to regulate broadband access under Section 706 of the Telecommunications Act of 1996. This would enable the FCC to develop rules on discriminating Web traffic while complying with the court order.

Another element that the FCC could enact is reclassifying broadband providers, which allows for regulating them similar to the way they regulate traditional telcos. According to the Washington Post's report, this reclassification would give the regulator the authority to put in place what policy experts say would be a "blanket ban on traffic discrimination."

Besides managing network traffic, the commission could use Section 706 to look into state-level laws that bar municipalities from building their own fiber-based broadband networks. A number of states, including Utah and Minnesota, have proposed laws banning community broadband networks.

VMware vCHS growth hinges on upcoming hybrid cloud services

Beth Pariseau, Senior News Writer

Published: 06 Feb 2014

VMware made its mark in technology history with server virtualization, but the company needs to catch up to cloud competitors with services beyond basic infrastructure to succeed long-term, industry watchers say.

VMware Inc. was the first to successfully virtualize x86 machines and has enjoyed a dominant position as a server virtualization vendor since then. Analysts estimate its market share at 80% to 85%, despite competition from Microsoft Hyper-V, which claimed it took server virtualization share from VMware last year.

As IT pros move from server consolidation to automation and cloud computing, VMware has also evolved into a cloud-centric company. It offers several on-premises cloud computing products bundled into the vCloud Suite, which includes vCloud Automation Center as well as server virtualization software. And last fall, it entered the public cloud with its vCloud Hybrid Service.

But VMware faces stiff competition as it looks to flourish as a cloud service provider. Amazon Web Services (AWS) is the 800-pound gorilla in cloud computing, with hundreds of thousands of customers, and there are a number of other prominent cloud providers in the mix.

VMware vCloud Hybrid Service (vCHS) has attracted some enterprise interest so far, but VMware's execution must be stellar to catch up to the rest of the market, IT pros said.

Specifically, VMware's execution is critical when it delivers on the Disaster Recovery as a Service (DRaaS) and Desktop as a Service (DaaS) offerings it revealed with the launch of the vCloud Hybrid Service (vCHS) in September.

Both offerings officially remain in beta, though VMware said on a Jan. 28 earnings call that DRaaS is about to enter general availability.

DRaaS: The best bet for vCHS

Last fall, VMware said the Site Recovery Manager (SRM) product still needs multi-tenancy capabilities to make DRaaS work, which has been completed on schedule. DRaaS will be available in beta in the fourth quarter, and according to one beta program participant, it works as expected.

"It's giving us the frequency of updates that we expect, and we can move things in and out of the cloud very quickly," said Darryl Dugan, manager of information technology for Nexon America, an online game publisher headquartered in Los Angeles. "Now we're just mapping out the regions that we want to use."

Dugan's company now has a Dedicated Cloud Core instance in VMware's Western Region and one in the Eastern Region, as well as a Virtual Private Cloud Core in the Western Region.

"The DRaaS with SRM is probably the biggest opportunity that VMware has right now," said Kyle Hilgendorf, an analyst with Gartner Inc., based in Stamford, Conn. "I don't think they can get there fast enough."

VMware will also offer DaaS on vCHS based on its acquisition of Desktone in 2013.

VMware avoids saber-rattling when it comes to AWS, but once the VMware vCHS DaaS offering leaves beta, it will be in direct competition with the public cloud giant. AWS has already built up a months-long lead in the market; the Infrastructure as a Service leader came out with its Amazon WorkSpaces product in November.

For now, vCHS customers are content to wait for a virtual desktop environment compatible with VMware's View VDI software.

"Desktop is something we're chomping at the bit for," said Shawn Wiora, CIO of Creative Solutions in Healthcare, based in Greenville, Texas.

VMware vCHS to-do list continues

As VMware looks to expand vCHS, it must also refine its cloud pricing model and undertake international expansion.

VMware's cloud pricing may still change as the company gains experience as a cloud service provider. For example, today there isn't compatibility between the vCloud Hybrid Service and the Cloud Credits Purchasing Program used to buy services with VMware Service Provider Program partners via an up-front purchase of pre-paid credits. VMware said it is exploring ways to integrate the programs.

While the current model of purchasing Core packages up-front suits the budget cycles of some early adopters, it remains unclear how successful it will be overall.

For example, some partners say their customers are confused by the pricing requirements and unclear how on-premises licensing translates into this model.

"We've had more help on [vCenter Operations Manager] and vSphere with operations management," said one value-added reseller (VAR) based in the Northeast who requested anonymity. "That's easier to get our arms around. The cloud is scary for VARs and a lot of salespeople. … We could definitely use more help."

International expansion is also crucial for VMware's cloud business. On the company's Jan. 28 earnings call, VMware CEO Pat Gelsinger said there has been beta availability of vCHS in the United Kingdom since December, with general availability expected this month.

"They really need to stand up data centers outside the U.S. before people can really see what the world thinks of it," said Bob Plankers, a virtualization and cloud architect with a major Midwestern university and a VMware customer.

Beth Pariseau is senior news writer for SearchCloudComputing. Write to her atbpariseau@techtarget.com or follow @PariseauTT on Twitter.

Do you have plans in place for Microsoft® XP's ‘End of Life’ ?

Do you have plans in place for Microsoft^® XP's ‘End of Life’ coming up on April 8th? It’s approaching quickly, and will be here before we know it.

Running XP beyond the end of life cutoff date means that Microsoft will no longer offer support. Critical updates and security patches will not be released, leaving the operating system at risk and vulnerable. Hackers will be standing by to attack as soon as it’s retired. 

Can you afford to put your business at risk?

There are alternatives to updating and managing the operating software available and likely will reduce your IT operating expense. 

LKC is here to help with the process and provide alternatives. How can we help you?